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Transforming The Family Business

Transforming The Family BusinessTuftsgraduate Harold “Terry” McGraw has helped transformthe 115-year old McGraw-Hill publishing company into one of theworld’s leaders in education, publishing and financial services.NewYork City

Medford/Somerville, Mass. [08.25.03] Founded as a book publishing companymore than 100 years ago, McGraw-Hill has transformed itself intoa 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 percentand sales now top $1.3 billion a year – earning McGraw praisefrom business leaders and the financial media alike.

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

The New YorkCity-based company – which owns BusinessWeek magazineand Standard and Poor’s –spent almost all of thoseyears under the watchful eye of McGraw, who has served as thechief operating officer since 1993 and as chief executive since1998.

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

“You can’thave footprints in all sorts of different types of markets,”McGraw told CNN. “So we focus on three markets, and theyare three very strong markets that have growth globally, thatallow us to be able to really extend and build size and scale.”

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

“[BusinessWeekmagazine] represents a calling card for the McGraw-Hill companies,”the Tufts graduate told CNN. “It represents everything thatwe strive to be. It is a wonderful brand. It is the highest levelof journalistic capability.”

With morethan 5.2 million readers, the magazine is the largest of the company’smedia holdings, which also include Aviation Week andfour ABC-affiliate television stations.

In many senses, McGraw-Hillremains a traditional media company – but the rapid growthof the Internet is helping reshape his business.

“Whatthis is about is change and how we manage change,” he saidin an interview with the Financial Times. “We haveto reinvent ourselves continuously.”

But McGraw-Hill’score strength in education remains a key component to the company’scontinued success.

Its education divisionis the largest kindergarten through 12th grade publisher in theUnited States. McGraw-Hill also produces a wide range of highereducation and professional education materials.

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

And it focuses thosestrengths not just in the marketplace, but in local communitiesas well.

“McGraw-Hillsupports the communities it serves, with over $50 million in charitableactivities,” reported CNN. The company works with a varietyof organizations such as Jumpstart, Houston READ Commission, andthe National Council on Economic Education.

Especially importantto McGraw is an annual education prize awarded by McGraw-HillCos. that was named in his father’s honor. Each year, upto three $25,000 prizes are awarded to individuals who have madesignificant contributions to the advancement of knowledge througheducation.

“The Harry McGraw Jr. prize in education is a terrific award,”he told CNN. “It puts a spotlight on people that don’tnormally get spotlights. And that’s exciting.”

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