Made to measure (pg. 3)

Though he didn't comment publicly at the time, being a poster child for private equity paydays rankled. "It bothered me a lot - it's dead wrong," he says now. "Money has never been what's motivated me in my lifetime." He adds that he invested a substantial amount of his net worth in Nielsen while taking a salary cut: "I went from a sure thing at GE to being $20 million in the hole right now."

During his first two months on the job Calhoun met with the CEOs of clients and got personally involved in big contracts - including P&G, Coca-Cola (KO, Fortune 500), NBC, and Kraft (KFT) - that were up for renewal. Since then he has opened up his thick GE management playbook - doing everything from importing Six Sigma productivity gurus to hiring several former colleagues to key corporate posts. He renamed the company after its core brand. And he's given longtime Nielsen executives (the "domain experts," in GE-speak), such as research chief Susan Whiting, expanded duties while bringing in a couple of media industry mavericks, like former Grey Advertising exec Jon Mandel, to help shake up the business.

Nielsen has announced a raft of deals and alliances, including one with potential rival Google (GOOGLE). And it has been working on entirely new ways to measure things that it hopes will ensure its hegemony in decades to come, including one new service to monitor the impact of in-store advertising (e.g., video-screens) and another that takes the coding Nielsen embeds in all TV shows as part of its ratings-gathering apparatus and uses it as a watermark to protect the shows from unauthorized play online.

So far clients, competitors, and colleagues alike say that Calhoun's management has injected energy and competitive fire into Nielsen. "I was much happier competing with the previous owners," says Romesh Wadhwani, the chairman of Information Resources, Nielsen's largest single competitor. Joe Willke, a longtime Nielsen employee, summed up Calhoun's impact on the company this way: "It's like you're playing in AA baseball, and suddenly Roger Clemens has come to pitch for you."

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It's still early innings, of course. (And Roger Clemens hasn't had an easy time lately either.) There are plenty of challenges to keep Calhoun on his toes. In television Nielsen might be facing its first real threat, well, ever. Everyone from TiVo to DirecTV to Comcast (CMCSA) is now working on a way to use set-top boxes to provide real-time TV viewing data that rival Nielsen's - at a fraction of the cost.

One of Nielsen's biggest pushes is what it calls "anytime, anywhere media measurement." Calhoun believes Nielsen NetRatings can be the currency of Internet advertising, just as Nielsen ratings are for TV. For now, though, figuring out who really visits what on the web is a chaotic exercise, with several competitors often producing wildly different numbers.

Whether the criticism is valid or not, some wonder if some of Nielsen's current quality issues are linked to its new ownership and financial situation. Although Nielsen is within its covenants, it has yet to pay down any of its debt. Instead, the private equity partners have allowed Calhoun to use operational savings he's made to fund acquisitions and new initiatives - but that also means that the company is paying close to $700 million in interest each year, which raises questions about how much Calhoun can continue to invest. One rumored option, which he denies, is to sell the business information and trade show division and focus on research. In any case, David Poltrack, chief research officer at CBS (CBS, Fortune 500), says he is wary of some of the restructuring Calhoun has done. "We understand the business reality of that," says Poltrack. "But at this point in time we are concerned to make sure that they are not cutting to the bone."

The reassuring, take-charge message from Calhoun is that he has faced challenges like this before, in everything from plastics to locomotives to jet engines. If he focuses on executing - and of course on measuring - everything else will work out.

But he needs to keep his troops on track too. As the Florida retreat wound to a close, Calhoun praised and thanked his people but added a note of caution. He reminded them that Arthur Nielsen and his son built their business on integrity - a "Nielsen code" of impartiality, thoroughness, and accuracy. And in their role as caretakers of that legacy, nothing less than the future of honest commerce is at stake. "We're temporary, all of us," he said. "This is bigger than us, and bigger than me. Nielsen is a powerful name. It matters in the world." In other words, he might have added, Nielsen counts.  

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