Set up following a 2012 reorganisation but with almost two centuries of history and experience, Macmillan Science and Education is embracing and nurturing digital disruption following the strategic separation from its publishing arm.
“Our CEO is certain – and I think she’s right – that technology is going to be one of the core differentiators in the science and education space,” CTO Stephen Devlin says.
“That’s why when we created the new Science and Education arm we created the new global CTO role, which sits across all of the companies within that, and that’s why we merged all the different groups into one organisation.”
Privately-owned Macmillan was reorganised along divisional lines in 2012, the Science and Education arm, led by chief executive Annette Thomas, overseeing 5,700 employees in 120 countries, as well as some of the group’s flagship brands including Blue Riband magazines Nature and Scientific American.
Prior to the reorganisation, according to Devlin, Macmillan was “like a typical publishing group in that it divided the world into America and the rest of the world, with a lot of different diverse groups inside each of those regional areas”.
While the international part of Macmillan focused more on science and education, in the US trade books – the fiction and non-fiction selling in bulk in online and high street book stores – was the major driver, and thus the call was made to create two different global groups, with Thomas inheriting the education arm of the US company.
Devlin says that working for a tech-savvy CEO is a privilege that comes with its own challenges, and that Thomas is trying to push the message out across the group that without straying too far from their core business, Macmillan Science and Education is a software business as much as it is publisher or provider of learning tools.
“It’s the first time in my career I’ve seen a CEO espousing technology in a media company,” former EMI chief technology officer Devlin says.
“Annette only has five direct reports and I’m one of them. She sees me as a pivotal component of forming strategy for the company, and she’s completely consistent about the fact that we’re a software business, and content and technology are equal partners which is a big change. The DNA in the past would have been editorial all the time.
“What’s really changed about the education and science base is that technology is not just a new channel to deliver the content. We’re selling features and functions now; that’s what our customers want.
“But doing technology well is expensive, and Annette knows that whoever gets that marriage of technology and content right is going to be the winner; she wants someone at the top table constantly thinking about that and being accountable for delivering on time and on budget, and making sure we’re always pushing the envelope.
The CEO’s other direct reports are a COO, and a president for each of the established science and technology businesses. While finance sits under the remit of the chief operating officer, the final direct report is a currently-vacant ventures president, overseeing the start-ups and disruptive industry shakers which Macmillan is investing in, acquiring or incubating into its ecosystem.
Indeed, privately-owned by Stuttgart-based Holtzbrinck Publishing Group, Macmillan Science and Education views one of its core strengths as an ability to focus on organic development and investment in the long term.
The company has established three separate disruptive technology and software-led businesses which partner with entrepreneurs, invest in start-up companies, and incubate in-house disruptive business development activities: Digital Science, Macmillan New Ventures and Digital Education.
“Where we think a company or idea we’ve invested in could be disruptive to our established businesses we run them separately,” Devlin says.
“So we embrace disruption, but what we found in the past is that when we try to pull it into our corporate structure too quickly we’d kind of kill the innovation, so we let these start-ups work and compete with us.
“Sometimes they’re acquisitions but we leave them with the same culture until they reach a certain stage – where they either die or they reach a maturity where we start to integrate them.
“We’ve probably got 23 or 24 different start-ups in our portfolio and they range across all sorts of things. Some are going after the textbooks business with low-cost, digital only textbooks. Some are on the science side, like a competing business model to the research journals you pay for.”
Print and digital
Like every other publisher, Macmillan was hit hard by the rise of cheaper digital rivals, but they are confident a paid-subscription model for their flagship journals is the right strategy, and that there is a still a role for print in an omni-channel era.
“The more commoditised your content is, the less likely it is people will pay for it,” Devlin says. “But People will still pay for world-class content and our Rolls-Royce brand Nature falls into that.”
Although the journal did not perform as well as hoped on the newsstand, the weighty publication does make 65% of its revenue through digital platform, its main customers big universities, research institutes and pharmaceutical companies buying a site licence.
“We sort of hit a cliff with print where it fell down to about 35%,” Devlin says.
“We thought it would continue to fall but it hasn’t; it’s sort of hit a plateau so we don’t see it going away – especially for Nature.
“For our flagship brand we think we’ll always be printing, like your magazine. I think having it printed is important for the quality of the brand.
“Plus we are still able to charge a far higher premium on print than we are for online.”
While the disruption influence of technology on publishing is there for all to see, Devlin is of the opinion that technology is, and has the power to, revolutionise education even more.
This is happening quickest in the university sector in the US where technology has moved way beyond being accepted in the classroom.
“It’s required now,” Devlin explains. “You can’t just sell textbooks and e-books anymore, you have to sell a software package that goes with it that allows a teacher to assign homework, let students test themselves, and read additional material.
“And we’re exploring the idea of a flipped classroom. It’s a concept that’s been in use for a few years now – how best to use technology so that the teacher focuses on only the things they can do in the classroom.
“A good example is asking students to watch the lecture they would’ve heard in the lecture hall in their own dorm, instead of doing homework. They then come into the classroom and do worked examples so the teacher can interact with them and actually help them and see who is struggling and who wasn’t – something that’s harder to do with technology.
“We can further refine that with some of our products where students can watch a video and then do a test, and in preparation for the lecture the teacher can see from the results which areas students have problems with and just focus on those bits.”
MOOCs and self-study
Massive open online courses are one of the major disruptive influences on the education sector, and Devlin questions whether they are a threat or an opportunity.
In the end, Devlin believes it’s slightly ironic that technology enabled MOOCs to happen but in the end it has demonstrated that content is the most important factor of any course.
He says: “The quality of the content in MOOCs is not as high as a top-rate textbook.
“Our learning however is that there is an appetite for self-study which will grow, and technology is definitely going to help.
“But I don’t think it will ever replace the classroom in the same way people will never stop paying for rock concerts. I was at EMI and saw the slow decline of the music industry; people started to baulk at the idea of buying a £10 CD at the same time they were paying £100 for a concert that was a 90-minute experience.
“Being in a room with an inspiring person is something you still can’t replicate online. We very much believe teachers are part of the future but technology can help them be more effective.”
Development team and skills
The technology team at Macmillan Science and Education consists of around 320-330 software developers, of which only around 100 are on the business systems side with the rest building digital products.
While Devlin insists the people coming to work at Macmillan’s new office in London’s regenerated King’s Cross area, recruitment is a problem at an organisation not regarded as one of the biggest brands in the industry.
“We are using a lot of Agile methods and open source,” Devlin says. “Developers want to work in that kind of environment and they stay once they are here.
“But your average computer science graduate wouldn’t know Macmillan Science and Education is a big technology employer, so that’s a challenge for us. But we’re thinking of becoming active here in King’s Cross as it grows – we’ve got a real chance to start a few things before Google arrive!”
Despite this, Devlin says the hardest skills to find don’t sit in the technology department, but just outside technology and which he calls product owners.
“I think it’s an emerging discipline, like a software programmer was 30 years ago,” he says.
“It’s a challenge for us as a company because coming from a strong editorial base we have a lot of people who are very detail-oriented and like refining things until they’re perfect. It’s the purpose of editorial, but with digital products it’s much more important to get a minimum product to market quickly and then change it every two weeks, so product ownership is a real challenge.”
As well as embracing disruption and enabling product development, Devlin describes responsibility for business systems as “the CIO part of the job”.
He said that following the Science and Education separation, he made a conscious decision to keep the digital and business teams together because they have more to share from being one group. Having worked in a number of media companies, Devlin found it was a mistake made over and over again to keep the old world away from the flashy chief digital officer, who would come in and largely outsource the development of the digital products to companies who would come in, learn what they needed to and then leave, Devlin explained.
“The problem now is if those products don’t join up with business systems you end up with products that aren’t scalable,” he says. “We can’t afford it if the billing aspect or customer aspect isn’t right.
“And if you get it wrong, you end up supporting these really great digital products with loads of people scurrying behind the scenes.”
One area CTO Devlin does not own is the Macmillan Science and Education infrastructure, which he used to run but under the new model the German publishing giant Holtzbrinck took ownership of a common infrastructure.
And an apt technology success, celebrating its first anniversary when CIO UK met with Devlin at the beginning of May and with Macmillan Science and Education itself still in its infancy, was the deployment of its enterprise social network.
“Our social platform is Jive, although we call it Campus Digital,” he says.
“It’s kind of like our intranet now; it’s very ‘Facebooky’ and you can join groups. There are all sorts of active streams and the Editor in Chief of Scientific American Mariette DiChristina is a prominent on it.
“Annette Thomas is a regular user – people can post without feeling they’re actually corresponding directly with the chief executive. It’s been a huge success for us and a technology that’s helped us create a new company from an old company.”