Condé Nast Is Experiencing Technical Difficulties

While other media rushed online, Condé Nast dug in its Louboutin heels. Now, with its much ballyhooed iPad play stalling out--so 2010!--the knives are out for digital wonder boy Scott Dadich.

AFTER THE RUDE AWAKENING of the recession, Condé Nast faced a turning point. It was clear the old model—concentrating on publishing elegant and high-end content and assuming that advertisers would line up for pages—was failing. Mr. Newhouse, who is in his 80s and has never been much for innovation, began increasingly to take a back seat, sources say, leaving a something of a power vacuum at the top of the company.

During the McKinsey era, when the white-shoe consultancy was paid seven figures to help turn things around, Condé Nast’s then-CEO and president, Chuck Townsend, was ready to ask for help. He created a ideas box—grandly named “The Power of Suggestion”—and invited any Condé employee with an idea to benefit the company to submit it. The best idea would be selected once each quarter, and the employee would be awarded a $10,000 bonus. But why, some wondered, would anyone with a truly disruptive idea give it away for $10,000 when they could walk to the Flatiron and get half a million in funding?

Later that year, Mr. Townsend handed over the president’s role to Bob Sauerberg, former group president of consumer marketing. That left Mr. Townsend (an operations-side suit), Mr. Sauerberg (a consumer marketing guy steeped in the world of blow cards and direct mail) and editorial director Tom Wallace (former editor-in-chief of Condé Nast Traveler), as the decision-makers charged with leading Condé to its digital destiny.

Though all had mastered various ins and outs of the print magazine business, at least as it was practiced in the last century, none were digital natives, and the mobile world was even more foreign. “These are not guys with iPhones in their pockets checking-in on Foursquare,” noted one insider.

It wasn’t a surprise, then, that the young Mr Dadich was viewed as something of a savior. “You know what it’s like,” a former employee told The Observer, regarding Mr. Dadich. “You sit in a room, and you don’t know much about a subject, but some person is able to discourse in it. All of a sudden someone says, ‘Wow this guy must be incredible!’ They’re anointed as the new king.”

And minting stars is what Condé Nast has always done best—from promising young designers selected as Anna Wintour’s favorites and aggressively promoted in the pages of Vogue, to internal staffers who find themselves propelled up the masthead. It’s the same model Condé used to promote James Truman, known as the “prince of Condé Nast,” to become the company’s second-ever editorial director.

“But,” the source was quick to point out, “just as in every royal family, the king has a certain time when he’s being fawned over, and then there will be a moment when someone chops off his head.”

It doesn’t appear likely that Mr. Dadich is on his way to the guillotine. But there are certainly those ready to plot a coup. Condé Nast employees described Mr. Dadich as “Tom’s boy,” and wonder if Mr. Wallace, the company’s editorial director, hasn’t developed something of a “mancrush” on his young protege. Many of the sources who spoke to The Observer wondered why, in a city suddenly teeming with venture capitalists, entrepreneurs and coders, a print guy like Mr. Dadich was picked to lead the way in the first place. One told The Observer that, last year, even Adobe requested a different point person better versed in interactive design. But that didn’t stop Condé from flying Mr. Dadich, who didn’t respond directly to an interview request, to Moscow a few months ago to deliver his spiel to the company’s Russian titles.

One source we spoke to said Mr. Sauerberg was busily trying to counter Mr. Wallace’s unwavering faith in Mr. Dadich, a relationship backed by Mr. Townsend. Then again, we heard some staffers blame Mr. Sauerberg for the seemingly short-sighted decision to partner with Adobe, while others pinned it on Mr. Townsend. Whichever view is closer to the truth may be less meaningful, in the long run, than the impression of a company on the edge of obsolescence increasingly falling victim to finger-pointing and internal power struggles.

It is, according to a Wired designer speaking from the magazine’s headquarters out in San Francisco, a “snake pit.”

Still, there are signs that things may be changing. A few weeks into Mr. Sauerberg’s tenure, he tapped an unglamorous outsider, Joe Simon, an Indian expat from Viacom, to be the company’s first-ever CTO. It was a move toward what one source called “the way every other sane company in the world works.”

Mr. Simon’s biggest challenge might be finding a way to move beyond the Adobe partnership and a mind-set that looks at the iPad and sees a newsstand, but with virtual stacks of print.

“It’s obvious it wasn’t going to work,” said Mr. Vinh, the former NYTimes.com design director. “It’s only if you’re under the spell of this very traditional print-centric bias that you would ever think that this would work. I don’t know who the executive was that said this is the way we’re going to approach it, but this is not a decision that I would put on my résumé.”

ntiku@observer.com

Comments

  1. Angrywade says:

    “Based in Silicon Valley, Adobe *had seen saw* where the business was heading

  2. Mike says:

    The very noticeable typo in the sub-headline makes me think I should have this copyrighter’s job. 

    1. spragued says:

      No, no, no –  NYO is criticizing another media company’s online efforts. The typos and bad grammar they dropped into this article are IRONIC.

      Right.

      1. Natsharkman says:

        Unless of course they put the “breaks” on irony like they did with their iPad publishing plans…

    2. Nick says:

      The very noticeable misuse of the word “copyrighter” makes me think you should probably not try out for any copy editing jobs at all.

  3. Mike says:

    The very noticeable typo in the sub-headline makes me think I should have this copyrighter’s job. 

  4. BooBoo says:

    “What we’re are going to do . . . ”
    Does the Observer even have any copy editors?

  5. BooBoo says:

    “What we’re are going to do . . . ”
    Does the Observer even have any copy editors?

  6. Anonymous says:

    Interesting that nary a technology person was quoted in this article. You have design folks quoted left and right and some editors (including some people who are all talk and no cattle), but these aren’t people who actually understand the plumbing. It’s tech that will make this happen. As for the Adobe thing, the other item that you don’t mention is that Adobe purchased a CMS company last year that will tightly integrate with Conde Nast’s existing publishing technology. So for quotidian e-editions, this should work quite well. Investing tons of labor into each e-issue is not sustainable — as early magazine app builders found out — so creating an assembly line is a good solution. It doesn’t preclude more advanced solutions or hybrids.

    1. Nitasha Tiku says:

      Thanks for the thoughtful comment and pointing out the Adobe/Day Software deal. I spoke to tech sources who are not named in the piece, but are you not counting Erin Sparling (WSJ director of design technology) as a tech person?

      1. Anonymous says:

        If people in Erin’s group consider themselves to be engineers, then that’s tech. If they consider themselves to be designers who understand technology (know some JavaScript, HTML and CSS), that’s design. And if they’re embedded in the newsroom, they’re likely to have less-than-rigorous development practices that further distances them from an engineering group. Don’t know you at all, so no offense.

        There’s a meme that’s been circulating the past few years that if journos take a few programming courses, they earn their tech stripes (see Jennifer 8 Lee for an example of this). No more so than techies who have blogs become journalists. While valid claims could be made for both (probably more for techies who write), creating systems that handle large volumes of content in a reliable, cost-effective manner is a discipline unto its own. The infusion of consumer tech has falsely made many folks think they’re experts when in fact they’re amateurs. Luckily, there are plenty of true tech gods and goddesses out there who can clean up the messes (and I have first-hand knowledge from many publishing companies, including WSJ, where this has happened). Once you hang around these folks a bit, the difference is quite obvious.

      2. Anonymous says:

        If people in Erin’s group consider themselves to be engineers, then that’s tech. If they consider themselves to be designers who understand technology (know some JavaScript, HTML and CSS), that’s design. And if they’re embedded in the newsroom, they’re likely to have less-than-rigorous development practices that further distances them from an engineering group. Don’t know you at all, so no offense.

        There’s a meme that’s been circulating the past few years that if journos take a few programming courses, they earn their tech stripes (see Jennifer 8 Lee for an example of this). No more so than techies who have blogs become journalists. While valid claims could be made for both (probably more for techies who write), creating systems that handle large volumes of content in a reliable, cost-effective manner is a discipline unto its own. The infusion of consumer tech has falsely made many folks think they’re experts when in fact they’re amateurs. Luckily, there are plenty of true tech gods and goddesses out there who can clean up the messes (and I have first-hand knowledge from many publishing companies, including WSJ, where this has happened). Once you hang around these folks a bit, the difference is quite obvious.

    2. The Design Technology team at WSJ is specifically designed to be the intersection between designers and technologists, to help facilitate creating products that are designed around a technology’s limitations, and helping technology plan around reaching a design’s goals. Saying “It’s tech that will make this happen” is exactly how companies get into tech-driven product design strategies, where the ultimate goal is adhering to tech roadmaps, and not to facilitating the best user experience.

  7. Calmeilles says:

    “It’s like going to a Broadway stage crew, who are very talented at what
    they’re doing, and saying, ‘Can you help us create the next summer
    movie blockbuster?’”

    To which they answer:  “Put a camer in the stalls and point it at the stage.”

  8. nilsson says:

    Conde Nast has “stalled out”?  Please. What a one-sided, and shortsighted article.  If anyone in their right minds thinks that laying new ground, and a new way forward in today’s technological landscape is easy then they, like the complainers at CN, have a huge lesson to learn.  Are we to feel sorry for those in art departments who “have had to give up their coveted down weeks between issues—time they
    once spent visiting museums and dreaming up gorgeous new layouts—in
    favor of working late on weeknights and weekends”?  Welcome to 2011!  As someone who is responsible for keeping up with the way new technology can be leveraged to reach consumers, my job is exponentially harder than it was even 2 years ago.  At least Conde Nast is taking the necessary steps forward, and willing to aim for advancement.  Consumer adoption of the iPad is growing, but there is still a great need to figure out the best way to engage with them in this medium.  I applaud the companies who are willing to take the leap-and the criticism that may come-to embrace the change.  While I appreciate that change may be hard for some, if you can’t get on board, then move over and let one of the many talented people who have been hungry for work step in and take over.  This will leave plenty of time for “visiting museums and dreaming up gorgeous new layouts.”

  9. clubdriver says:

    Certain points are valid, many are untested. The digital magazine baby is  a toddler and Dadich was the right parent at the right time to nurse it when it was a baby. His foresight is a strength and that may be another reason Conde boosted him to VP. But now, the waters are tested. So same situation presenting itself now, couple years later? Maybe he wouldn’t be the guy.  My take on it all? Heck, cash in on Conde when you can, great work Scott!