The decreasing popularity of print textbooks, the rise of digital devices, the price of higher education, and changing consumer behaviors created a difficult landscape for Barnes & Noble Education (BNED) to navigate in 2020. For a company set up to serve the college bookstore industry, it was a perfect storm. Then, in March, the COVID-19 pandemic hit and closed bookstores and college campuses across the nation.
Executive Vice President and CFO Thomas Donohue is helping the storied company pivot to take advantage of the new opportunities created by the unexpected events. “Higher education is changing, and institutions are looking for solutions,” he says. “This is our moment to show what a great partner we can be.”
BNED got its start when Leonard Riggio opened the Student Book Exchange in 1965 and has been expanding through organic growth and acquisitions ever since. Riggio acquired the Barnes & Noble name, opened dozens of on-campus stores under Barnes & Noble College, and eventually watched that company go public on the New York Stock Exchange under Barnes & Noble Education.
In the past decade, the company has worked overtime to keep up with emerging digital trends. Donohue joined BNED in 2015. He studied math and finance and worked as an analyst before becoming assistant treasurer at Interpublic Group. Managing people at the international advertising company prepared him for his current role.
During his tenure, Donohue has helped his company acquire writing skills and services websites like Student Brands and PaperRater.com. In 2017, they introduced bartleby, an online study tools subscription service loaded with expert homework help and other features designed to serve students and help the company keep pace in a competitive field. It was the first time BNED developed a business-to-consumer product, and finance was involved every step of the way to ensure the business was structured properly.
“We find that active governance is a key to value-creation in transformations, given the deep complexity of these initiatives,” says Scott Rankin, national advisory leader for consumer and retail at KPMG. Rankin leads the performance transformation platform, KPMG Elevate, and supported BNED in the project.
For BNED, bartleby is one step in an all-or-nothing digital transformation. Upon its launch, the new service attracted fifty thousand subscribers. Company leaders were optimistic and looked to build on that momentum. Then, COVID hit, threatening to derail the progress.
The pandemic had a big impact on higher education and all affiliated businesses as colleges and universities closed their doors—including those of BNED’s campus stores. As managing and reducing expenses became critical, Donohue and his colleagues made the difficult decision to furlough and lay off some employees.
While some business leaders would see COVID as a death blow, those at BNED resolved to leverage what they had been building, accelerate the digital transformation, and turn remote learning into an opportunity. The company was strategic during the pandemic and used the time to strengthen its base of both clients and subscribers while listening to what each stakeholder would need in a post-pandemic world.
“Our research has shown the companies that continue to invest in new ways to grow, while controlling costs, ultimately perform better than their peers and are ready for changes in the marketplace,” Rankin notes.
As CIO Stephen Culver explained to Silicon Republic, BNED was well-prepared because it had just made key enhancements to bartleby. The upgrades, Culver said, “provide students with a digital learning tool that gives them 24/7 access to step-by-step textbook solutions and a searchable Q&A library, as well as a writing center that helps build better habits by assisting with spelling and grammar, plagiarism detection and citation assistance.”
Long before COVID-19, BNED was investing in digital learning and technologies. “We were prepared when schools transitioned to online learning, and we don’t see that going away,” Donohue explains. As the pandemic increased demand for online learning support, BNED introduced the bartleby digital study bundle, which students can use to access homework help, writing services, and other resources. Traffic, engagement, and subscriber numbers are all increasing as BNED gains market share and demonstrates the value it provides to digital native learners.
Despite the disruption COVID-19 brought to campuses nationwide, BNED continued to implement the strategic initiatives required to move its digital transformation forward. The company grew its digital student solutions business, expanded a course material delivery program known as BNC First Day, invested in search engine optimization and partnerships, attracted new K-12 and institutional clients, and released a new e-commerce platform.
Donohue’s leadership with the transformation is noted by external partners he works with, such as Wells Fargo. “Tom is a visionary leader renowned for his deep focus on developing long-term relationships,” say Wells Fargo Corporate & Investment Banking’s Eric Frandson and Wells Fargo Capital Finance’s Lauren Murphy. “Wells Fargo is pleased to work with Tom in supporting BNED’s pivot to digital.”
In reporting second quarter results for FY21, the company said it had gained more than 120,000 bartleby subscribers year to date. The growth was one bright spot that helped the company through what Donohue calls a “once in a lifetime disruption that has taken its toll on everyone and every business.”
Fulfilled in Finance
After nearly three decades in finance, Thomas Donohue still loves coming to work each-and-every day. That’s because he’s found a way to develop relationships and leverage his skills to make an impact.
He encourages those just starting out in finance to get immersed in a company and learn as much as possible. Finance degrees and MBAs are important, but real, hands-on training comes when you dig deep and open yourself to new opportunities.
“Never be afraid to say yes to something new,” he says. “And if you get asked to do something or to work on a project, say yes!”
Once, the CFO job was all about numbers, but Donohue has watched it expand throughout his career. “Today’s CFO has to make sure the company is transforming, and the business strategy is moving in the right direction,” he says. “And you need the right talent to align with your business priorities and strategy.” A great team has helped Donohue take BNED’s finance function from accounting-only to a problem-solving partner.
By the fall of 2021, university campuses and most college bookstores were reopening, signaling new life for Barnes & Noble Education. The textbook wholesale and services provider now has nearly eight hundred physical stores, state-of-the-art e-commerce websites, robust educational partnerships, and hundreds of thousands of loyal subscribers.
After completing an important digital transformation and weathering a major public health crisis, the company appears to be ready to meet students on campus, at home, or anywhere in between.