Ian Smith’s appointment as chief executive of Reed Elsevier was always controversial.
Followers of the company, best known for its ownership of magazines such as Variety and New Scientist despite making most of its money from publishing academic, legal and scientific journals, were baffled that it had not appointed a media specialist to succeed Sir Crispin Davis after his distinguished decade at the helm.
Mr Smith was not, after all, someone who had ever worked in publishing. His previous job before joining Reed was chief executive of Taylor Woodrow, the housebuilder, which he left — with superb timing — in July 2007 after its merger with rival George Wimpey plc. Before that, he had been the chief executive of General Healthcare and, before that, the European chief of Exel, the logistics group, and a commercial director or another logistics firm, Ocean.
In all, then, Arabic-speaking Mr Smith — whose career began at Royal Dutch Shell — did not seem an obvious choice for the job and in particular because he had spent just six months at the helm of a publicly listed company.
Reed, though, was positive. Announcing Mr Smith’s appointment, in November last year, it described him as a “seasoned global business leader” who would build on its growing digital presence and global leadership positions.
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Initial noises from within Reed Elsevier were positive, after he joined on New Year’s Day, with colleagues speaking optimistically about how Mr Smith had come in with a fresh pair of eyes and was looking anew at everything.
Colleagues and the market were also supportive about a £824 million fund-raising in July after the balance sheet became over-stretched following a $4 billion return of cash to shareholders in January 2008 and Sir Crispin’s subsequent acquisition of information group Choicepoint.
But Anthony Habgood, Reed’s chairman, is one of the most experienced figures in Britain’s boardrooms and will have been quick to pick up on discontent among shareholders. They are unsettled given that Reed, which is supposed to be stable and predictably as media stocks go, has underperformed the FTSE 100 by more than 20 per cent so far this year. He will also have identified that things were not working out for Mr Smith and has acted quickly.
Erik Engstrom, who succeeds Mr Smith, was probably the right man for the job in the first place. As the chief executive of Elsevier, the group’s Dutch arm, he was a key member of Sir Crispin’s core team, faces the task of restoring relations with investors while stepping up the pace of investment in some businesses.
Sir Winston Churchill once said: “You can always count on Americans to do the right thing — after they’ve tried everything else.”
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Mr Smith who, despite this setback, still boasts a solid track record elsewhere and, since he is still eminently employable, will doubtless bounce back in due course.
But Reed, having tried the alternative, has finally got in place the man it should have appointed all along.