The challenges of a post-apocalyptic world or a quest for immortality might present difficulties for some, but not Maureen O’Connell. As CFO and chief administrative officer at New York-based Scholastic Corp., O’Connell oversees activities that reap substantial profits from fictional works, such as "The Hunger Games" and the Harry Potter books, that bring such scenarios to life for children and teenagers.
Of course, O’Connell’s challenges at Scholastic—a leading children’s book publisher that sells and distributes a range of titles in the U.S. and more than 140 other countries—have been quite different than those of the fictional characters in these works, but perhaps no less compelling or action-packed. The company sells one out of every two children’s books in the U.S. and also runs school-based book fairs and book clubs. It is active in educational technology and services, children’s media and the global licensing of its brands.
Since joining the company in 2007, after senior finance positions at Barnes & Noble, Gartner Research and Primedia, O'Connell has consolidated and streamlined Scholastic’s global operations, managed the company’s financials, reduced operational costs, led efforts to return approximately $500 million to shareholders through buybacks and dividends and even revised distribution center operations—a broad range of responsibilities that O’Connell relishes.
“I’ve always asked for the CFO job plus something else, whether it was marketing or IT operations,” she says. O’Connell believes that broader experience has helped her address some of Scholastic’s ongoing challenges. The company faces the shift from print to e-books, diversification into global markets (in January, Scholastic acquired Learners Publishing, a Singapore-based publisher), U.S. school budget constraints and the constant demand to find the next hit franchise.
One major change O’Connell made was to consolidate Scholastic’s manufacturing, supply chain and purchasing efforts in its largest divisions into corporate groups. She also oversaw a shift to a distributed work-flow format, which has been particularly helpful for the company’s customer service operations, she says. “Now we can digitally assign work to our customer service operators wherever they are, and see how they are doing and check on productivity” in real time.
This, in turn, allowed Scholastic to report revenues of $1.9 billion in 2011 and garnered it a 20% increase in third-quarter results relative to a year ago, reflecting the popularity of "The Hunger Games" franchise with both teen and adult readers. In addition, O’Connell says cash flow has exceeded net income for the last four years, while working capital improved significantly, by $91.8 million, and inventory declined $53.3 million, or 14.8%, on a net basis.
Another change entailed shifting the book fair distribution centers to a hub-and-spoke model, allowing for faster turn times, a welcome development for children who can’t wait for the next installment of "The Hunger Games" or Harry Potter, not to mention The Baby-Sitters Club, Goosebumps and The Magic School Bus, other children’s book series that Scholastic publishes and distributes.
Also under O’Connell’s watch, Scholastic has introduced an electronic capital allocation system that allows management to more easily conduct look backs. “When a manager says they need funding for a project, the new system allows us to see: 'Did you or did you not get the return on investment you projected?'” she says. “So we have now tightened up our budgeting and forecasting.”
In March, the company launched Storia, a free app for children from 3 to 14 offering more than 2,000 e-books. The new digital offering aims to encourage reading in formats that the younger generation may favor while allowing parents to track which books their kids read, how long they read and what new words they learn.
“The release of Storia is a good example of a collaborative effort between our business and technology units,” O’Connell says, reflecting the greater synergies she aims to bring to the 92-year-old company.
See the 2012 Women in Finance list here.
See the 2011 Women in Finance list here.