Nielsen Company CEO David Calhoun Delivers Leaders Forum Lecture at SOM

It took two dozen long meetings before the owners of the Nielsen Company convinced David L. Calhoun to leave his position at General Electric to take the Nielsen helm. The company, formerly called VNU, had been bought by a consortium of six private equity firms in 2006, something that made Calhoun nervous. “I had a notion that working for one private equity firm would be hard enough,” he said. “But I noticed a sense of teamwork on their side of the table. Eventually they sold me that this was the only way to unlock the value of Nielsen.”

Calhoun, who spoke at SOM on January 29 as part of the Leaders Forum speaker series, explained the transformation he’s spurred at Nielsen — the world's leading provider of marketing information, audience measurement, and business media products and services — since he became the CEO and chairman of the executive board in August 2006. Calhoun was met with a company he described as a poorly integrated collection of 26 entities. Up to that point, he’d spent his entire career at GE, rising to vice chairman at GE, and president and CEO of GE Infrastructure. Over 27 years, he’d built a reputation as an innovator with a remarkable breadth of managerial experience. Two years ago, Fortune named him the “most lusted-after managerial star who isn’t already a CEO,” essentially the top CEO-in-waiting in the country.

At the time he came aboard, Nielsen was a profitable, if unexciting company. VNU, which had reassembled the pieces of the original Nielson family after it was bought and then broken apart, wanted to integrate the parts in order to create a market analysis powerhouse. “They had the notion that you could get scale on everything, that you can innovate by bringing all the data sets together,” he said. “Unfortunately, the whole never out-performed the sum of its parts.” Calhoun wanted to dramatically overhaul Nielsen not just to make it more efficient — to unleash it — but because to do nothing would put the company at a serious disadvantage. The media space Nielsen inhabits is changing daily, with old formats receding and new ones coming to the fore. As he sees it, the delivery of content is evolving into a three-platform model. “I want to be the first metric to allow them to move content from the TV to the computer screen and the first metric to allow them to move to mobile devices,” he said. “Can you do it with a lumbering company? No way.”

Once at Nielsen, Calhoun set out to get the company’s 35,000 employees to buy into this idea of transformation. Each week for three months he met with all workers via web cam, to keep them up-to-date on changes at the company. “Nobody blinked because this is what they wanted,” he said. “They understood there’s uncertainty involved.”

At one point in the talk, a student asked Calhoun what he thought of the new Yale Integrated MBA Curriculum, which is inter-disciplinary in nature, teaching management skills in a richer more relevant context, rather than discrete business functions. “I’m going through this with Nielsen,” he said. “Functions are nothing more than an efficient way to organize a company. You do it for efficiency and you do it with an eye for getting the best skills in a particular function. Other than that there is no relevance whatsoever for a function at a business school. Everything else about it usually works in conflict with what’s good for a client… What you’re working on is in my opinion exactly the right way to go. Leadership isn’t about managing any one function efficiently. That’s not what we do. Leadership is about how to synchronize and integrate those functions to do something good for your client. It’s as simple as that.”

Watch David Calhoun describe Nielsen Company's ongoing metamorphosis.