Neil Morrison on the Penguin Random House merger, and sexing up HR
Katie Jacobs, September 16, 2013
Neil Morrison played a major role in the merger of Penguin Random House, which saw him promoted to group HRD. He talks about the biggest challenge of his career to date, and why he’s on a mission to make HR sexier
A lawyer once called Neil Morrison the “most dangerous man in HR”. It’s a description that still pleases him, although the reason for the condemnation – speaking out against social media policies – amuses and grates in equal measure. “Being a dangerous HR person because you don’t have a policy goes to show how poor our profession is,” he says. “If that’s dangerous, God help us.”
It’s not the only time Morrison, winner of HR director of the year in the HR Excellence Awards 2013, is openly critical of his chosen profession during our interview. In person – as on Twitter and his popular, provocative blog Change Effect – he’s not shy about expressing his frustrations about HR’s shortcomings. But while he might feel the function needs a shake-up, things couldn’t be going better for him professionally.
After five years as HR director at publishing giant Random House, which he joined in 2008 after stints at Rentokil and Argos, he’s just played a leading role in steering the company through the most significant merger in recent publishing history. On 1 July, Random House, which published global bestsellers including The Da Vinci Code and Fifty Shades of Grey, merged with Penguin, home to authors including Zadie Smith and William Boyd, to form the world’s biggest publisher. Penguin Random House brings together more than 10,000 staff across the globe.
Morrison has just been promoted to group HR director, UK and international, reporting to CEO Tom Weldon, the former UK chief executive of Penguin. “It’s the biggest challenge of my career to date, and probably will be the biggest challenge of my career ever,” he says. “I’m swinging between being totally energised and bouncing around like a little boy, and having a moment with the door closed when I feel quite sick about the whole thing.”
All this is testament to how much Morrison has done to change perceptions of HR within Random House in just five years. “When I first joined, Gail Rebuck [then-CEO of Random House, now chair of Penguin Random House] sat down with me to discuss board structure,” he recalls. “She said: ‘Of course, there are some roles that could never be on the board, like HR.’” Two years later, he was promoted to the board. And when the merger began to gather pace, he was given the role of rest of world lead for Random House, taking responsibility for all countries outside North America.
What did Morrison do to change Rebuck’s perceptions quite so dramatically? “Some of it is down to personal style and building up relationships,” he says. “I use the phrase ‘critical friend’ because I believe I’m the only person in the organisation who will say ‘your bum looks big in that – don’t do it’. CEOs value that and don’t get it enough.”
The other piece is a clear and deep understanding of OD, being able to “understand organisations and see them as systems”. “I was able to help navigate her and other people’s thinking through the organisation to understand how it all fits together,” he explains. “It’s not about understanding financial models and showing off how commercial you are. That stuff is base level, and if you don’t know it, you should just leave. It’s about really understanding the systemic nature of an organisation.”
Managing the merger
The Random House-Penguin merger was on the cards for some time. When Morrison interviewed for the company in 2008, he was asked what he knew about M&A activities. “I kind of...lied,” he recalls, adding that just after he joined “the wheels fell off the economy”. “The first few years weren’t about M&A, but about operational efficiency and getting through difficult times,” Morrison says. Then in September last year, his role became all about the merger. The merger teams were kept small to allow most people to get on with the day-to-day business of publishing books, so those involved were entirely devoted to it.
“From then to today, it’s been my every waking hour, and a fair number of sleeping hours,” says Morrison. “There’s not a thing I can’t tell you about Uruguayan payroll provisions, Colombian transfers of employees or employee relations in South Korea.” He was already looking after Australia, New Zealand, India and South Africa, but the merger extended his reach. “I’m learning things about benefits in Latin American I never thought I’d need to know,” he continues. “The international nature is hard because people don’t necessarily think about the implications for different countries, the time zones or the different legislations. But we’re operating in 30 countries now as a truly global publisher.”
Despite handling such a diverse range of issues and countries with a small and relatively inexperienced team, Morrison chose not to call in any interims. “It was important to me that my existing team got the experience,” he says. “I didn’t want to bring in a bunch of guns for hire – people who come in with experience but then pick up our experience and take it elsewhere, while my team are thinking they would have liked a go at something. I had quite an inexperienced team, but not anymore. Anything looks simple after this.”
Eyes on the horizon
Now the merger is complete comes the tricky process of integration, not that Morrison would use that word. “The big challenge is not getting dragged down into phrases like ‘consolidation’, ‘integration’ and ‘harmonisation’, but to concentrate on culture, leadership and be really clear that we are looking for the best solution,” he says. “It’s really important we manage to keep our heads up and look at the horizon, rather than getting caught up in detail after detail.”
When it comes to culture, Morrison believes Penguin and Random House are “80% the same, 20% different”, but points out that both have several divisions, all of which have their own distinct cultures. “One of the tricks is getting people to see that it’s not ‘either/or’,” he says. “You can be part of more than one culture. You can feel part of a village, and a county, and a country, and a continent. You can feel identity with various things, and one shouldn’t supersede the other.”
Penguin owner Pearson controls 47% of the Penguin Random House joint venture, and Random House owner Bertelsmann has the rest. As it’s almost a 50/50 split – what Morrison calls a “true merger” – he says neither side will be overly dominant. “We need to be mindful of finding the best of both to make an even better organisation,” he adds. “It might be slower than an acquisition or dominant partnership, but it’s the right thing to do. Both are hugely successful and profitable businesses. It would be foolish to rush in and say because one thing works there, it’s going to work here.
“As far as I’m concerned, I left Random House and joined Penguin Random House on 1 July. I’m the new boy learning both sides, I don’t want to be the Random House guy who now looks after Penguin as well. Getting that mindset right in the senior leadership team is going to be very important.”
Getting that mindset right starts with something as simple as language. “We need to be careful of using ‘them’ and ‘us’ language,” says Morrison. “It’s natural and instinctive as we have talked about ‘them’ and ‘us’ for years. Now it’s we. It’s not ‘either/or’, it’s ‘also/and’. If we can role model the right behaviours, we’ll show people it is one new business. And the sooner we start doing that, the easier it is.”
Building something new
Morrison admits there is some anxiety among staff as mergers often bring redundancies, although employees have been assured there are no immediate plans for layoffs or closing imprints. However, a “real sense of energy and collaboration” is more pervasive. “Our mission has to be to create the best business in the UK and the best publisher in the industry,” he says. “If we’re clear that’s what we’re trying to achieve and demonstrate it through tangible actions and interventions, then hopefully people will see this is a good thing. As the biggest publisher in the world, we should be offering the biggest opportunity in the world. I want to create the best L&D academy in publishing.”
Morrison sees the merger as an opportunity to build something new. “Not many people get the chance to create a 21st century organisation. This gives us the opportunity to go top to bottom, think about exactly what the publishing company of the future looks like and create that organisation. If you work in HR and you aren’t excited by that, you probably should go work in payroll.” It’s certainly a big job. “The other side of you goes, ‘what if I cock it up?’” he admits. “‘What if I break this as I go through?’”
Morrison’s first, rather mammoth, tasks include working through systems integration, Ts&Cs, branding and employee relations differences. “And that’s before you even think about OD and change,” he says. “It’s huge. Breaking it down and organising it is a real challenge. Our culture of empowerment will help us, as groups work collegiately. If we were to try and manage it with a command and control structure, I don’t think we’d get it done. It would kill me in the process.”
The role of HR in the merger has obviously been critical, which Morrison believes proves both organisations view people as central to future success. “It depends on what you think the value of M&A activity is,” he says. “If you take it as a purely financial value, why would you get HR involved? Just get the bean counters in a room. A whole bunch of mergers go wrong in my view because of that very thing.”
The merger is not the first non-traditional HR activity Morrison has been involved in – he also leads an ‘author care project’, for example. “If you understand behaviour and the systems that work in organisations, you can help strategic initiatives get delivered by driving performance,” he says. “Being able to translate that value into initiatives outside HR takes you that extra step from being a good HR person to being a good business leader. Too many HR people don’t do that. Instead they try and replicate the finance role by being all over the numbers. But someone is already doing that, whereas if you focus on organisational performance, systems and culture, you’re bringing something new.”
Sexing up HR
He is vocal in his belief HR should focus on delivery of “the sexy stuff” and not get bogged down in process. “We spend too much time on process and policy and not enough on things that make people go ‘wow’.” One example of a typically Morrison ‘wow’ initiative was his decision in 2011 to give every employee an iPad for Christmas. Not only was this an eye-catching incentive scheme, it was grounded in the understanding of a business need.
“We wanted people to be comfortable with digital technology, to understand the iBooks store and the Kindle apps,” he says. “We could have run a course, but instead we gave everyone an iPad. The board jumped at it when I said I could get everyone digitally savvy for under £300 a head. After the Christmas break, people came back with a much higher level of digital knowledge. There’s one way you can do it which is sexy, and another which is boring. In HR, we don’t often focus on being creative, innovative or inspirational enough.”
Morrison himself could never be accused of not being digitally savvy. Through his blog and Twitter account, he’s totally immersed in social media and advocates its use. “I tweet about HR, but I’ll also tweet about a book we’ve got,” he says. “As people in my social networks trust me, they’ll read it. My organisation is getting free publicity. Extrapolate that to 2,000 people, and you’ve got an awful lot of free marketing.”
In addition to the commercial value, Morrison believes he gains from it professionally too, by being pointed to useful information and getting involved in debates. “Then there’s the social element,” he adds. “I’m connected to so many business people and HR professionals. And I’m connected to people right across our business – surely that engagement is a good thing.”
And as for social media policies? “They are dangerous. I believe in empowerment and trusting people to do things responsibly. Some people will do bad things, but they won’t stop because you have a policy. And with productivity, it doesn’t matter if you’re tweeting, reading the paper or juggling, they are all unproductive activities, but you wouldn’t have a policy for each. We need to get sensible: this is life. Consumer technology is going corporate. Businesses need to get used to it.”
Morrison says he doesn’t blog, tweet or speak at conferences for personal or professional gain – being so provocative probably ruins his chances of getting some jobs – but because he’s passionate about changing HR for the better. “Unless people are willing to speak up and say there are different ways of looking at things, we may ?as well pack up and go home. Before I die, I want to make HR sexy, that’s my mission in life,” concludes HR’s most dangerous man.