Reversal of Fortune   

Once known for its focus on management issues, the biweekly business magazine has beefed up its roster of writers, broadened its approach and emphasized storytelling. It's become a "hot book" in the process.

JOHN HUEY IS STANDING IN FORTUNE magazine's conference room on the 16th floor of the Time & Life Building in Rockefeller Center, surveying an array of the past year's covers. He's trying to answer this question: Which stories or issues exemplify what today's Fortune is all about?
The Holocaust cover (April 13) ``was not a typical business cover," he says. But it sold well, ``to everyone's amazement.'' The managing editor looks over his choices on the wall, pointing at one after another, explaining, salesman-like, what made each uniquely wonderful, uniquely Fortune. ``I was told you couldn't sell...with blacks or women on the cover,'' he continues. ``The Jordan effect [June 22], a best-seller.... The 50 most powerful women [October 12]...a best-seller.''
Exuding praise like a beaming parent, an energetic Huey, his Southern drawl picking up in pace, motions toward another issue, rattling off its attributes. Gap Gets It (August 3)--``what readers are interested in.'' The story on Condé Nast's magazines (July 20)--a hard-hitting piece he's proud of. Apple's CEO Steve Jobs on the November 9 cover--``shows how cinematic we can be.'' The megamerger story (January 11, 1999)--that one, says Huey, is ``like the old Fortune.''
It's hard to say what Huey has left out. But his inability to narrow down his Fortune faves may mean he's succeeding in his effort to broaden the definition of the traditional business magazine. When he began leading the magazine in a new direction in 1995, Fortune experienced, in his words, ``a massive shake-up,'' including a flurry of firings and hirings that weren't the norm at a Time Inc. publication. Huey, 50, has continued to lure talent to his ranks, plucking a number of recruits from rival Forbes' masthead.
That ``old Fortune'' he refers to, the Fortune of the '80s and early '90s, focused on ideas for managers, he says. Now new ways of thinking, writing and designing have changed the 767,148-circulation biweekly dramatically. Huey's marching orders from Time Inc. Editor in Chief Norman Pearlstine: ``Just make it the best magazine in the world that happens to be about business.''
That's a lofty goal, and it's certainly one that will keep the staff in overdrive for some time. In the process, Fortune has garnered second looks from many who once considered it a step or two behind other business magazines. An amalgam of compelling storytelling, provocative topics, hard-edged reporting, an A-list staff and an emphasis on technology is responsible for Fortune's ``revolution and evolution,'' as Deputy Managing Editor Rik Kirkland calls it.
A recent list of the ``25 Most Important Magazines in America,'' released by the Missouri School of Journalism, clocks Fortune in at No. 6, above No. 7 Business Week and No. 13 Forbes. The rankings were determined by a survey of media writers, journalists and journalism academics who were asked to vote for the magazines they felt were influential.
Patrick Reilly, a Wall Street Journal media writer, says Fortune is ``far more readable than it has been in decades, because [Huey] tells stories.... They frankly make the rest of the [business and financial] magazines seem boring in comparison.''
Reilly mentions that buzz-generating Condé Nast story--a critical analysis by Joseph Nocera and Peter Elkind of the media company that takes CEO Steve Florio's management tactics to task (and that's an understatement). He calls it ``the ultimate in tough, hard-nosed reporting.'' Where it used to be Forbes that had the edge, the magazines appear to have flip-flopped, says Reilly. ``I think Forbes is envious.''
Though the two publications vie vigorously for advertising dollars and have long been seen as rivals by staffers and media writers, Huey says they're not in the same ballpark editorially. Forbes' Publisher Richard Karlgaard agrees the magazines are very different editorial products. ``Forbes is about capitalism,'' he says, ``and Fortune is more about the sociology of corporations.''
Traditionally, the big American business magazines have been listed as three--Business Week, Forbes and Fortune--and in that order. But in the last few years, Fortune has been widely seen as the magazine with momentum. In 1994 or '95, Huey says, the magazine was No. 3 ``by almost any measurement.'' Not anymore. ``I think we are No. 1,'' he says.
Declaring a clear-cut winner may be a matter of opinion. In circulation, Business Week easily triumphs, followed by Forbes, which has a narrow lead over Fortune. Though circulation numbers, as both Huey and Karlgaard point out, can be bulked up. In advertising pages, Forbes is still ahead of Fortune, but the latter is growing more quickly. Regardless of any king-of-the-hill rhetoric, a revamped and revived Fortune is attracting attention in its efforts to appeal to a wider audience.
The interests of Fortune often follow those of its writers. ``I write just about anything I want,'' says senior writer Nina Munk, who was hired by Huey in October 1997 after five years with Forbes. Munk wrote a February 1999 cover story, ``Finished at 40,'' about companies dismissing more experienced employees to clear the way for younger, cheaper ones. She also did the story on Gap's efforts to become a staple clothing brand for all Americans. ``The stuff relates tangentially to business,'' she says. To Munk, business is about personality, sex, drama. ``I don't think business means balance sheets,'' she says.
Neither does Fortune. That Holocaust cover Huey mentioned isn't something most people would expect for a business magazine; nor would it have surfaced in the old Fortune. Here's the connection: Carol Junge Loomis, a 45-year Fortune staffer, documented the lives of five businessmen who contributed big sums to the U.S. Holocaust Memorial Museum and were, in fact, Holocaust survivors. ``The 50 Most Powerful Women in American Business'' issue marked the first time the magazine compiled such a list, and ``The Jordan Effect'' issue (featuring a piece on Michael Jordan's impact on the economy) was the second cover of the Huey era graced by His Airness. The first was for a January 1996 story on charisma in business.
Sayings like ``Huey blew open the windows'' are popular among the staff. Clearly the magazine's scope and range have changed. Pearlstine calls the transformation ``the great magazine turnaround of the '90s.''
It was on Valentine's Day 1995 that John Huey, Fortune executive editor, then the No. 2 news position, was promoted rather unexpectedly to the top spot, managing editor. Walter Kiechel, a longtime Fortune editor, had been at the helm for less than a year, following the eight-year reign of Marshall Loeb, who had reached the mandatory retirement age of 65. Rapid turnover wasn't something Fortune--or Time Inc.--was used to.
Pearlstine had been overseeing Time Inc.'s magazines for less than two months when he made his friend and colleague from his Wall Street Journal days the new Fortune boss. The two met in 1980 when Pearlstine was the Journal's national news editor and Huey was the Atlanta bureau chief.
Huey had joined Time Inc. seven years before Pearlstine's arrival. Loeb, now editor of Columbia Journalism Review, had recruited him to be a Fortune contributing editor. Huey soon lobbied for and won the opportunity to run his own Southern business magazine, an existing publication partly owned by Time, which he called Southpoint. He had previously tried to launch such a magazine under Dow Jones & Co., but the Wall Street Journal parent pulled the plug in 1988. Southpoint died as well, in less than a year. ``It was nice to put out a magazine on a small scale,'' Huey says of the experience. ``I learned timing is important. I learned not to get too discouraged from failure.''
In 1990, he came back to Fortune as a senior editor; in 1994, Kiechel moved him to the No. 2 spot. Huey's coronation as managing editor soon followed. Why was Kiechel ousted so quickly? ``Walter is and was...a smart editor,'' Pearlstine says. But, ``Walter's great passions and strengths were issues of management,'' while Pearlstine wanted ``more personality, coverage of a broader business story.''
``I didn't feel anything had gone wrong,'' Kiechel, now editorial director of the Harvard Business School Publishing Co., says of that time. Fortune ``had a pretty clear strategy or vision.'' However, Pearlstine ``had very different ideas'' for its direction, he says.
The change left many on staff asking, ``What now?'' Editorial Director Geoffrey Colvin says there was a ``mixture of apprehension and excitement.'' Huey, he says, was ``sort of an unknown quantity.'' Most staffers embraced the new mission of widening the magazine's purview, says Colvin, who joined Fortune in 1978 as a researcher/reporter.
Senior writer and 15-year Fortune veteran Patricia Sellers recalls a speech Huey gave about his vision for the magazine as ``music to my ears.'' Under Loeb, she says, Fortune ``was a good, nice, evenhanded, informative magazine,'' though ``we had this absolute aversion to writing profiles.'' The magazine, she adds, had become ``more and more like homework'' to read. But now they had Huey, Sellers says, ``not only a rebel, but a rebel with a vision.''
Huey was not exactly the archetypal leader for stodgy, bureaucratic, paternalistic Time Inc. It never occurred to him that he would become Fortune's managing editor. Under the old Time Inc. definition, he says, ``I would be disqualified.'' Why? ``I have no prestigious degrees. I'm not from the right part of the world. I don't speak French very well. Don't drink at lunch. I'm not tall or good-looking.'' Huey got a chance because Pearlstine came in--also from outside the company, another nontraditional move--and ``wanted a problem solved.''
Deputy ME Kirkland smiles when I tell him about Huey's view of the old culture and agrees, ``he's not a classic Time Inc. guy.'' Huey ``tells stories...slams the table, is irreverent,'' he says. ``He knew he didn't fit in, and he used that to his advantage.''
Huey redefined what it took to keep your job at Fortune, instituting a higher degree of accountability. Under the old rules, says Colvin, ``if you weren't convicted of a felony, you could probably stay here.''
The new chief felt Fortune had too many editors and too few great writers. He says he went out of his way ``to describe what [staffers] needed to make it'' and encouraged those who wouldn't measure up to leave. ``I felt like it was an unfortunate but a necessary step to turning the magazine around,'' he says. Adds Colvin: ``There were a lot of people at Fortune who just didn't belong here. Everyone on staff knew it.''
Still, the uncharacteristic firings weren't always easy to accept. ``He's gotten rid of a lot of my friends,'' says David Kirkpatrick, a member of Fortune's board of editors. ``That was sad.'' Kirkpatrick, who's been with the magazine for 15 years, doesn't always agree with Huey's personnel decisions--he's brought in a lot of people who didn't work out and were quickly dismissed. But, he adds, ``you can't argue with the final product.''
Before Huey, Kirkpatrick says, the magazine didn't have its current flair. ``I come here every day because I'm really excited to do what I do.''
When Huey announced he was raising writing standards, Sellers worried she wasn't good enough to make it. But Huey, she says, helped her realize her talent and figure out where she should concentrate her energies--writing about people. ``John is into casting,'' she says. Assistant Managing Editor Timothy K. Smith, who knows Huey from his time on the Wall Street Journal's European edition in 1982, says this was the type of Huey move that made him most proud. ``John found ways for people who had been sort of stuck and frustrated to do things they had an aptitude for,'' he says.
Platoons of others have been recruited since from various venues--the Wall Street Journal, Time, Forbes, the Detroit Free Press, GQ, The American Banker and Money, among others.
Editor-at-large Nocera had just finished a book and was writing a business column for GQ and freelancing in 1995 when Huey convinced him to make Fortune his home. ``I never thought of myself as someone who would write for a business magazine, and I never thought of myself as someone who would be happy writing for a business magazine,'' Nocera says. But he bought Huey's pitch: `` `You will do your best work here.... And we will give it the time and space it needs to breathe,' '' he recalls Huey saying. ``It seemed like an opportunity I'd regret if I didn't take it.''
Huey has a penchant for stealing talent. The day I first interviewed him, he announced Fortune had just nabbed Forbes' Silicon Valley bureau chief, Eric Nee. He says there's no ``recipe'' for a Fortune writer. ``Bring something to the party,'' he says. ``Don't just show up.''
Richard Behar, a senior writer who does investigative reporting, spent six years at Time magazine and a previous six at Forbes before signing on at Fortune in 1995, a move he says he wouldn't have made if not for Huey. Behar felt this managing editor was one who would keep at least half his promises.
When a friend from Money suggested to Munk that she move from Forbes to Huey's magazine, she thought, ``There's no way in hell I'm going to work for Fortune.'' Such a traitorous defection was unimaginable. Once she met Huey, though, she was ``immediately sold.... He was indignant when I said I had to think about it.'' After she gave Forbes' then-Editor James W. Michaels the news, she was told to clear out right away. Since then, Munk has recruited three more Forbes staffers, she says.
No one has made the reverse switch, though Forbes' Karlgaard says his magazine isn't eyeing Fortune's roster. ``Fortune is going to appeal more to journalists who see themselves as writers first and reporters second. Forbes is the opposite.'' It's easier to be trained as a reporter and make the jump to writer, he says.
At Fortune, there is a clear emphasis on telling a story. Sellers says work at Fortune is more interesting than the days before Huey and at the same time ``scarier'' and more competitive. The ``what-have-you-done-for-me-lately'' standard can be ``daunting and intimidating,'' says board of editors member Kirkpatrick, but that's the way it should be in a meritocracy.
Staffers say Huey doles out kudos as easily as criticism and encourages debate. ``John can tell you you're an idiot and you can tell him if you think he's an idiot,'' his No. 2 Kirkland says. Productivity is highly valued. ``He expects people to kick ass all the time,'' Munk says. ``There's nothing passive about John Huey.''
At Time Inc., the once rock-solid tiers of hierarchy have crumbled. Neither Huey nor Pearlstine are into organizational rankings. Munk and other writers describe themselves as free agents. Anyone can suggest any story. Anyone can get a cover. Editors can write.

VALERIE BLOCK, WHO COVERS media issues for Crain's New York Business, describes Fortune as a ``very hot book.'' One of the reasons, she says, is that the editors have ``beefed up their technology coverage a lot. They've made it their anchor, in a way.''
While technology has certainly been emphasized at Fortune, it's not a brand new phenomenon. Editor-at-large Brent Schlender was hired to cover Silicon Valley in 1989, all by himself. Now, the bureau has four staffers and soon may have six. ``It's not like [Huey] woke up one morning and said, `Technology will sell,' '' Schlender says. The magazine already had tech talent. Huey ``just gave us more pages,'' he adds.
Over the past year Forbes has made some tech-friendly moves of its own--naming Richard Karlgaard publisher and William Baldwin editor, and hiring three more technology writers. Karlgaard, former editor of the technology supplement Forbes ASAP, is based in Silicon Valley. And Baldwin, whose regime follows Michael's 37-year tenure, has been touted as a tech maven.
Though there's speculation that those moves are in response to Fortune's technology gains, particularly when it comes to advertising, Karlgaard says there's no cause and effect. ``Forbes sells more ad pages than Business Week or Fortune,'' he says. ``In the category of technology, we are third among the three. And we'd like to improve.'' Whether Fortune existed or not, he stresses, his publication would be intensifying its presence in Silicon Valley.
Covering technology wasn't the only thing Fortune did well in the past. Certainly all wasn't dull and lifeless before Huey took charge. Kirkpatrick says some of his best stories were ones he did for Loeb or Kiechel. ``The innovations John brought have been as much in packaging as content,'' he says. ``I think marketing matters.... People realize how good we were.''
While Loeb believes the magazine is now ``one of the best in the world,'' he says Fortune was also very strong under his command. Saying the Fortune of old was aimed at managers is a ``fair assessment,'' he says, but the magazine also reported on many social issues facing Americans and published annual issues on investing. ``I think it has changed in many respects,'' he adds, ``but any dynamic magazine should change.''
One thing that has certainly changed is the look. The 1996 redesign of the magazine--which reduced its size from a wider format to standard magazine dimensions--and big bucks spent on art and photography have made it much more inviting. And the notion of what constitutes a Fortune cover story is radically different.
Huey's approach to covers required some adjustment. After the redesign, Schlender recalls, he wrote what he considered a very strong piece on competition in the computer industry. But the story was passed up for the cover in favor of money manager Michael Milken's first post-jail interview. Schlender says Huey thought ``this has more `grab-you-by-the-lapels' value.'' Though Schlender was disappointed, he says, he soon realized ``they're not going to judge the quality of my work by how many covers I get.''
Those cover stories are the ones motivating people to slap down $5 for a single issue, something Huey feels is very important. There's a small strip of Fortune covers in his office sorted by how well each sold on the newsstand. Fortune bragging rights: Newsstand sales for the second half of 1998 averaged 78,000, up 90 percent from 1994, pre-Huey, when sales averaged 41,000. Newsstand numbers are noteworthy, Huey says, because ``one, they're very profitable. Two, they get the magazine in the hands of new people all the time.'' And three, they're ``an instant indicator of vitality of the product...how you're doing in the marketplace.''
So how does the need to sell affect content? Huey says Fortune addresses the stories it needs to no matter what, but ``we might not put it on the cover.'' Some of those grab-you covers have been controversial, such as a September 8, 1997, issue calling CEO Darla Moore ``The Toughest Babe in the Business.'' Getting people talking, getting that buzz, is definitely a yardstick for Huey. ``He got the magazine more exposure,'' says former Fortune writer Susan Caminiti, who left in June 1997 after 13 years to pursue a freelance career.
As for what's beyond the cover, Fortune is about mix. Kirkland says Huey's reign represents ``the best four years in the 20 I've been here in terms of content,'' both serious and entertaining. ``We'll do piffle,'' he says, ``fashion for fun...as long as we have other stuff.'' In November, a cover on the ``celebration of life outside the office'' preceded an ``Internet or Bust'' issue on the emerging ``E-corporation.''
The ``piffle'' and profiles have led former Forbes Editor Michaels to assert that Fortune is ``becoming more of a gossipy, celebrity-driven publication.'' When I ask Karlgaard if Michaels' comments reflect the general sentiment at Forbes, he doesn't see why such talk would raise Fortune's ire. Huey's ``model is Vanity Fair,'' he says. ``So to say Fortune is more gossipy...that isn't even kicking them in the shins.... That is mirroring back'' what Huey hopes to attain. Huey waves off such comments as shots across the bow from a jealous competitor. Talk of Fortune trying to emulate Vanity Fair, says Kirkpatrick, is ``not really accurate. But we do try to make [stories] as interesting as a Vanity Fair profile of Gwyneth Paltrow.''
Pearlstine says there's a larger audience out there for the ``new'' Fortune than those who now subscribe. Senior writer Behar would like to see Fortune ``transcend the business audience'' to an even greater extent, hearkening back to its earliest days. In Fortune's second issue, dated March 1930, there's an article by Ernest Hemingway on the economics of bullfighting in Spain, illustrated with Goya etchings and a Manet print. But can a magazine that uses phrases like ``the S&P 500'' and ``total quality management'' interest artsy types who don't play the stock market? ``I don't know,'' says Behar. ``Maybe.''