Marjorie Scardino
Yanks their Chain

The news struck London's fusty financial district - not to mention Fleet Street - like a thunderclap. The Pearson company, one of the world's biggest media and entertainment conglomerates, last October named its new chief executive, and the choice was a stunner:

An American!
A Texan!
And - surely there must be some mistake - a woman!

The new boss is Marjorie Morris Scardino, a rangy blonde from Texarkana, sometime rodeo barrel racer, promising copy editor with the Associated Press, prairie populist, lawyer and First Amendment scholar, reporter and publisher (with her husband) of a crusading, Pulitzer Prize-winning Georgia weekly. For the first time in the long history of British enterprise a woman heads one of the United Kingdom's top 100 companies. What makes this more remarkable is that Pearson has set the pace for British stodginess - the prototypical furled-brolly, pinstripe-and-watchchain type of firm, dominated by the same titled family that founded it in 1856. The glass ceiling had been truly shattered.

With one leap Scardino, fifty, moved from Pearson's $250 million-a-year Economist group (consisting of the esteemed newsweekly and its many offshoots, 50 percent owned by Pearson) to boss of the whole $3.5-billion-a-year conglomerate. Her salary, options, and fringes will nudge $1 million.

She has to move quickly to win over the skeptical brokers and analysts. Many of them had hoped for a hard-nosed outsider to take Pearson - a hodge-podge of disparate parts - by the scruff of the neck and make it perform better. Instead, they got this insider who has never before run a public company. Corporate Britain remains largely an old boys' club with raised eyebrows and lowered expectations that a woman can reshape Pearson.

Pearson is best known for the companies it keeps, from the worldly Financial Times to Marca, a racy Spanish sports newspaper, and Roll Call, Capitol Hill's ultimate inside-the-beltway semi-weekly; TV holdings from the Thames to the Ganges; a stable of book publishers including Penguin; and motley businesses from Lazard Brothers' shrewd financiers to Madame Tussaud's wax dummies. New media, old media? Yeah, we got that.

Now Scardino plans to focus Pearson even more intently on its strong journalistic core and sell off some $1.5 billion of nonmedia properties. That's quite unlike U.S. conglomerates, notably Disney, that are dumping many of their press holdings on grounds that their profits aren't growing fast enough. Her first decision as c.e.o. was to pump up to $240 million into the Financial Times over the next five years, largely to boost its circulation in North America (now 31,000) and Asia. When FT executives approached her with bold expansion plans - and The Wall Street Journal in their sights - she responded immediately, "Go for it." To make it happen, FT editor Richard Lambert is being dispatched to New York to ride herd for a year.

She is just following the strategy that she used as worldwide chief of The Economist Group from 1992 through 1996. While other media companies were selling or shutting down print properties, Scardino and her aides were aggressively creating new ones from The Economist intelligence unit's massive database, notably some 300 tightly focused niche publications, from detailed reports on 195 countries to the annual Rubber Trends.

Scardino also went about acquiring newspapers and magazines - not only Roll Call but also CFO, a Boston-based monthly magazine for senior financial executives, and the Journal of Commerce, which rides on shipping and trade. Why did she buy the Journal of Commerce from Knight-Ridder? Easy. "I couldn't afford The Wall Street Journal." She thinks it's terrific for The Economist to own an international daily newspaper based in New York. "I'd love to edit this paper," she said to Dan Holt, the Fortune veteran she hired as editor. He has substantially modernized its design. (Scardino no longer has any role with The Economist. Pearson is a strictly hands-off silent partner.)

In her southernish accent, Scardino sighs, "Desk editing! That's what God meant me to do." Her infatuation with print dates from 1970, when she left George Washington University Law School to work for the AP in Charleston, West Virginia, as a dictationist and quickly rose to desk editor. When a hotshot rookie reporter named Albert Scardino turned in his first big feature to her, she read it and asked dismissively, "Whoever told you that you could write?" Criticism soon morphed into commitment. Later they moved west and were wed in a ceremony in a San Francisco park, speaking vows that they wrote together and which she did not edit.

The Scardinos returned to Albert's native Savannah in 1978 to start a newspaper "that would make a difference." Their Georgia Gazette was a feisty alternative weekly with a circulation that hit 2,600 on its best days and profits that reached considerably less than zero. In 1984, Albert's editorials, exposing wrongdoing by low men in high places, won a Pulitzer Prize, the first awarded to a weekly in twenty years. Says Marjorie: "We played a part in putting thirty-five public officials in jail, from the clerk of court to the state labor commissioner." She was an avid reporter as well as the publisher, though she didn't dare leave her day job as a partner in a Savannah law firm because "We had to eat."

 Their anti-establishment zeal cast them as skunks at the garden party and dried up the legal advertising that had kept the Gazette afloat. One year after the Pulitzer's rosy glow, they drowned in red ink.

 The two disheartened journalists headed for New York in 1985, seeking solace and salaries, and their luck turned. With his Pulitzer luster, Albert joined The New York Times (followed by a turbulent stint as press secretary for Mayor David Dinkins). A headhunter cast Marjorie as the No. 2 to the incoming c.e.o. of The Economist's operations in North America, but he opted not to take the job and recommended her in his place. The decidedly underqualified, failed weekly publisher convinced Economist executives back at the home office that "you learn a lot more from mistakes you make than when everything goes smoothly."

In her seven years as the New York-based head of the Economist operations in North America, the magazine's circulation there surged from 100,000 to more than 230,000, numbers that made an impression on worldwide headquarters back in London. Her key was to identify their target readers carefully and go after them energetically - precisely what she aims now for the Financial Times. She harnessed direct mail and placed sophisticated ads in airports and commuter rail stations, and gave out free copies at New York, Washington, and Boston shuttle terminals - places haunted by traveling business executives. And she used the profits to buy all those print properties.

Small wonder that when The Economist in London needed a worldwide c.e.o. in 1992, Scardino got the job. In her four-year tenure, earnings rose by 130 percent and circulation climbed from 503,000 to 618,000. She gives the credit to her deputies: "I just send flowers and get out of the way."

Scardino settled easily into her fifth-floor office at Pearson headquarters in London's priciest enclave, a few steps from designer-laden Bond Street in one direction and the bespoken elegance of Savile Row in the other. Her uncluttered office, an oasis of pearl-gray modernism, is hung with minimalist works from her own collection and offers a view of the solidly Victorian Museum of Mankind across the narrow street. Though they could easily socialize with power brokers, the Scardinos live quietly with their two sons in tony Knightsbridge; their daughter is back in New York at Columbia University. Albert writes op-ed and other pieces, lectures occasionally, and is an accomplished house-husband.

With her jaunty informality, Scardino connects easily with people. "She sort of has that Texas squint when she looks you over," says Don Becker, c.e.o. of The Journal of Commerce. "She's sizing you up. She lets you know that things don't have to be that formal - she's down home." Approachable and gregarious, this chief executive likes to roam the corridors and talk with the troops on an egalitarian footing that is unusual in still class-conscious Britain. She likes to hear opinions around the shop, but when matters get argumentative, she'll declare in exaggerated Texas style, "This ain't no democracy."

In her first week at Pearson, Scardino sent a letter to each of the 17,000 employees around the world. "I do my best in an atmosphere of energy, some urgency, and a good amount of humor," she wrote. "I do not want to be associated with an organization that's not decent and fair."

If that's not the way your c.e.o. usually speaks, try this one from Scardino, in a pronouncement when she got the top job: "Clearly, my responsibility is to ensure we make investors a return on their investments. I also believe corporations have responsibilities to their employees, to make sure they have stimulating jobs. Corporations also have the responsibility to spend time on the community and on charity."

This has the ring of the grass-roots populism she grew up with. She remembers when her grandfather determined that she was old enough, at age eight, for him to tell her the political facts of life: "We are Democrats because we have the responsibility to take care of those less fortunate than we are, and the Republicans are just out for themselves."

The question intriguing many British businesspeople and newspeople is whether Scardino, with her passion for print, will be able both to expand in journalism and simultaneously to provide a good and growing return for investors. Meanwhile, journalists everywhere can watch with interest to see what happens next with this Texas transplant who looks well beyond the bottom line.

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