The Corner Office: Publishing Outside the Box
Many would consider Harlequin Enterprises Publisher and CEO Donna Hayes an innovator. Not only is she the first woman to head the Canadian-based company, a position she has held for the past five years, but under Hayes’ leadership, Harlequin has consistently made industry headlines for its willingness to experiment in all areas of the book-publishing business—from joining forces with Nascar in 2006 for a series of stock car-themed novels to signing an exclusive deal to partner with Audible.com for digital audiobook distribution of its titles.
Harlequin also was the first major publisher to offer its entire front list in e-book format, and has further pushed the boundaries of digital offerings with several initiatives, including developing a mobile-phone application for women, producing romance blogs on its Web site, and even having one of its authors do a reading event on the online virtual world Second Life (SecondLife.com).
Hayes spoke with Book Business about how she fosters a corporate culture of innovation, and how Harlequin is cutting costs and generating revenue by approaching publishing with a fresh perspective.
● What is your approach to fostering an innovative corporate culture?
Donna Hayes: Innovation is part of our DNA. … We designed a set of [six] guiding principles. … One of [them] is “Innovate—Continue to Raise the Bar.” Continually create new and innovative products that appeal to our customers’ needs. Find better, faster, cheaper and smarter ways of doing things, and execute [them]. Take the calculated risk that drives improvement. We have established a culture that encourages and rewards this kind of thinking. It keeps us relevant, current and ahead of the trends. … Anyone who works here really believes in it. … People understand coming through the door that’s part of what’s expected of them, and it works. …
● In recent years, what innovation did you champion that made a significant difference in your business?
Hayes: I think there’s a lot of them. There are probably a couple of them I would highlight. One was our launch of our business in India [in February]. I think it will be enormous to our future. … I think that [with] the growth in India, it’s very important for us to be there. We adapted to the differences in culture and local customs. Geographic expansion of our brand is what we look at all the time. We really want to be everywhere in the world that women would like to read our stories.
The other really big one would be our digital business, especially in Japan and especially digital graphic novels for cell phones. … It’s been spectacularly good. It’s a different way to reach consumers. We really see it as the leading edge of technology. …
● What was the biggest business challenge faced by Harlequin in the last few years that you were able to address with innovative thinking?
Hayes: The publishing industry is flat, so we constantly are working on ways to improve our everyday business, and lower costs and raise efficiencies. … Publishing is a wonderfully large industry. We grow revenue at a reasonable rate, but inflation is a pretty daunting thing. One of the things we’ve done in the last few years was [to] say, “What’s our portfolio of initiatives?” Lots of them are revenue initiatives. Others are cost initiatives. People tend to hear about the revenue ones.
We purchased a short-run printing machine that enabled us to service our customers better, keep inventory costs down and be able to have our authors’ books available. (For more information on Harlequin’s purchase, see article on page 30.) … We can’t afford to be out of stock in paperbacks. … Our authors love it because their books are never out of stock.
● What is the life cycle of an innovative concept?
Hayes: … I think it really does depend on the projects. It’s … ongoing. … At the beginning of the year, [we set up] steering committees. [We ask,] “What’s our priority this year? How many teams do we want to set up?” We take our highest-potential people who can think in a different way … . The life cycle is generally within a year. If we put these guys together in January, we’d expect they’d come back … with a fully developed business plan in [June]. … Sometime within that next year, you’d see it in the marketplace.
Digital works a whole lot faster. Within the digital space, we just launched “Nocturne Bites.” We have a paranormal romance line in print called “Silhouette Nocturne.” [“Nocturne Bites”] is a digital read that is shorter and introduces readers to that line. We charge $2.99 for this. The first digital minibook went out this week. So, those things you can do a lot faster. Six months sounds probably about right.
● How is your staff included in brainstorming?
Hayes: Our innovation teams include people from all different departments and countries. The teams focus on specific questions and areas within the company … . Each team presents their ideas to a steering committee. It is a very rewarding experience for a team member to watch a plan they participated in come to fruition. Some ideas can happen very quickly and some are deemed inappropriate.
● How long before you know if an innovative idea is working well?
Hayes: Our best measures are sales figures, New York Times hits, author retention, media placements, etc. … It’s a little harder on the “not working.” We like to give stuff some time. … When I look at India—I’ll tell you in five years. If you took a more specific example, [we would] probably give it a year. If, at that point, it’s not meeting the average performance of what else is working, we’d choose to end it. …
● What is an innovative idea that really took off?
Hayes: [Harlequin is] a fun brand and one that makes people happy. One of [our] advantages is that we do have that brand, and people recognize it. … We ran a cover-model contest recently. In the fashion industry today, the guys [generally] don’t look like hunks that should go on the cover of [our] books. … Stephen Colbert picked up the story and did a segment on his show. Yes, we did have a business need [for male cover models]. We turned it into this big promotion, and we got a bunch of guys that turned out to be great models.
Peter Beisser is a regular contributor to Book Business. He previously was the managing editor of several North American Publishing Co. titles and has written extensively about the publishing industry.
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