Transforming The Family Business

Tufts graduate Harold “Terry” McGraw has helped transform the 115-year old McGraw-Hill publishing company into one of the world’s leaders in education, publishing and financial services.

New York City [8.25.03] Founded as a book publishing company more than 100 years ago, McGraw-Hill has transformed itself into a global leader in education, publishing and financial services, thanks in large part to 1972 Tufts graduate and CEO Harold McGraw. Under his leadership, profits have increased by more than 60 percent and sales now top $1.3 billion a year – earning McGraw praise from business leaders and the financial media alike.

“Today McGraw-Hill is a near $5 billion company,” reported CNN, which recently honored McGraw as its CEO of the Week. “The company is one of only 21 in the S&P 500 with an over-funded pension. It’s on track for a dozen consecutive years of earnings growth.”

The New York City-based company – which owns BusinessWeek magazine and Standard and Poor’s –spent almost all of those years under the watchful eye of McGraw, who has served as the chief operating officer since 1993 and as chief executive since 1998.

During that time, the Tufts graduate focused on balancing the company’s three areas of focus: education, publishing and financial services.

“You can’t have footprints in all sorts of different types of markets,” McGraw told CNN. “So we focus on three markets, and they are three very strong markets that have growth globally, that allow us to be able to really extend and build size and scale.”

The company’s crown jewel, McGraw says, is the BusinessWeek brand.

“[BusinessWeek magazine] represents a calling card for the McGraw-Hill companies,” the Tufts graduate told CNN. “It represents everything that we strive to be. It is a wonderful brand. It is the highest level of journalistic capability.”

With more than 5.2 million readers, the magazine is the largest of the company’s media holdings, which also include Aviation Week and four ABC-affiliate television stations.

In many senses, McGraw-Hill remains a traditional media company – but the rapid growth of the Internet is helping reshape his business.

“What this is about is change and how we manage change,” he said in an interview with the Financial Times. “We have to reinvent ourselves continuously.”

But McGraw-Hill’s core strength in education remains a key component to the company’s continued success.

Its education division is the largest kindergarten through 12th grade publisher in the United States. McGraw-Hill also produces a wide range of higher education and professional education materials.

“We have capabilities in all phases of [education], whether it be elementary, secondary, testing, supplementary, higher education, profession, and of course globally,” McGraw told CNN.

And it focuses those strengths not just in the marketplace, but in local communities as well.

“McGraw-Hill supports the communities it serves, with over $50 million in charitable activities,” reported CNN. The company works with a variety of organizations such as Jumpstart, Houston READ Commission, and the National Council on Economic Education.

Especially important to McGraw is an annual education prize awarded by McGraw-Hill Cos. that was named in his father’s honor. Each year, up to three $25,000 prizes are awarded to individuals who have made significant contributions to the advancement of knowledge through education.

“The Harry McGraw Jr. prize in education is a terrific award,” he told CNN. “It puts a spotlight on people that don’t normally get spotlights. And that’s exciting.”