ForbesLife Executive Woman
Managing In Tough Times: Cathie Black
Patricia R Olsen
Forbes Magazine September 29, 2008

Cathleen P. Black, president of Hearst Magazines, oversees the financial performance of close to 20 publications--including Harper's Bazaar, Town & Country , and Good Housekeeping -- as well as nearly 200 international editions of those titles. She chronicled her four decades in the media business and balancing her work and personal life in the 2007 best-selling book Basic Black: The Essential Guide for Getting Ahead at Work (and in Life) , to be released in paperback by Three Rivers Press this fall. Here are Black's thoughts on some of the challenges confronting companies today, the mistakes they make, and how they can plan in good times to ride out the bad.

In difficult economic climates, companies sometimes panic, which doesn't solve anything. It's not going to change the economy, and it will only make your employees nervous. Instead, it's important to remember what your core competency is and pound away at it. You have to be willing to adapt as changes happen around you, and constantly ask yourself, what does my customer want in these tougher times? Then you have to be able to give them what they want.

You've got to keep moving. You do have to launch new products, and you need to take risks--acquire [products or businesses that] can round out your portfolio and perhaps look beyond your own borders. Maybe there are opportunities internationally, in higher growth markets.

Companies can overreact to dips in the economy, but the bigger danger is not reacting soon enough. Everyone hopes the fourth quarter of 2008 will be better, for example, but there has to be a balance between not wanting to be a negative voice at the table, buoying your employees' spirits, keeping the momentum going, and taking action. You need to react sooner rather than later. It's often been said that the only thing a person regrets about a hard decision is not making it sooner.

It's all about getting ahead of the curve and focusing on initiatives that remove cost from the equation. Top-line revenue is what builds a business. You have to watch costs religiously and make cuts where appropriate, but you can't save your way to success; you can't keep cutting. You have to continually ask yourself, how do I build revenue? The answer is either by working with what you already have or by adding to that. Businesses grow either by diversification or by growth--increased revenue. There are times to cut and times to enhance, and you have to keep both levers going.

A tough economic climate can also be a great time to hone your portfolio. Let's say you have six different product lines and you've been nursing one along. Realize that it's not going to make it and get rid of it. You have an opportunity--the economy gives you the "fig leaf" to make decisions that may be unpopular. But this is not the time for a popularity contest. You have to be foc-used and ask yourself how to improve your bottom line.

Several months ago we closed a magazine, Quick & Simple. My job is to evaluate whether we've been at something long enough, and whether it has reached the milestones it has to reach. We thought Quick & Simple would be a huge success for the middle market, but we couldn't get the circulation traction to make it successful. We had to say, it's probably not going to make it, and this economy is not going to help.

A tough economy is also a great time to sort out your folks. It's an opportunity to do two things. One is to make the hard decisions about people who might not be making the grade. Two, you've got to keep your key people motivated and give them a sense that you're in this together. It's part tough love and part wrapping your arms around them. They have to realize we're in a down period right now but we're going to get through this. A leader walks the walk and talks the talk. You have to be at the table.

Along that same line, be true to yourself in tough times, and keep your sense of humor. Walk the halls looking positive, because people look to you for clues. The way you carry yourself sends a message, and you want to portray confidence and strength.

Surprisingly, a difficult economy may be a good time to start a new business or launch a new magazine. Everyone else is hunkered down, so if you have a good idea, go ahead and do it. But do it quickly so you don't build up overhead, and be willing to say, however many months into it, that seemed like a good idea, but it wasn't. You have to be able to take those risks.

In good times, however, it's too easy to spend what you're bringing in, and maybe even more, because there's no pressure to reduce. There are always ups and downs in the economy, so in good times you want to be smart, hunker down a bit, and not be lavish. You have to keep pulling yourself up and think, tomorrow's another day.

--as told to Patricia R. Olsen

Olsen has written for the New York Times, Dealmaker , and other publications.