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Now for the Grann Finale

Phyllis Grann turned Putnam into the most profitable publisher in town. But she quit in a huff and took a mysterious new job at Random House. Does the undisputed queen of New York's book business have one more trick up her sleeve?

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On January 2, the day she moved into her new office at Random House, Grann tries out the conference room.  

She's the perfect female, perennially best-selling author Tom Clancy says flatly, "good wife, good mother, good boss, and a dear friend." He's trying to explain why he and a few dozen other writers whose books sell several hundred thousand copies a year are so devoted to Phyllis Grann, their former publisher.

Unsatisfied with simple perfection, Clancy pushes on. "Most of the money I make is because of her," he says, then adds with disarming, nine-figure false modesty, "I'm a good storyteller -- but I'm not the greatest writer. I don't use language as well as I should. But she keeps moving me along."

He tries another approach: "Like Spielberg makes movies, she makes books." But even that leaves Clancy searching.

"She's Supergirl," he finally blurts out.

In late September, Phyllis Grann shocked the book world by announcing she would leave Penguin Putnam, the $750 million publishing empire she assembled over 25 years and could not have dominated more completely if her name were on the building. Most executives with her career would have simply retired. She was the first woman CEO in publishing, and the head of an imprint that's reputed to be 50 percent more profitable than any of its peers. Instead of bowing out, however, Grann trotted out F. Scott Fitzgerald's crack about American lives' having no second acts, vowed to have one of her own, then sat back to watch the frenzy of speculation about her next move.

Two months and a day later, Random House, Inc., announced that Grann would be joining the publishing behemoth -- one that's been struggling with its profit margins lately -- in the nonexecutive role of vice-chairman, a job she starts this month.

A small woman, even in heels, with a preternaturally youthful face that leaves you thinking of Barbara Walters (she says she's 62, but her Barnard classmates are all 65), Grann will admit only that she will work closely with Random House CEO Peter Olson. "It's not really clear what I'm going to do," she says. "Peter and I are going to discuss it, but I've already got some of my own ideas."

Much of the gossip stems from the vague and cagey terms both Grann and Olson use to describe her new job. "I met her through the business," Olson says, "but she's become a close personal friend. She was the only non-Random House publishing person at my wedding." Last September, Olson married Candice Carpenter, the Internet shooting star who founded iVillage. "One of our first dates was dinner with Phyllis and her husband."

But Olson chuckles at the suggestion that Grann will soon have operating responsibilities of any kind: "She's not going to be running an imprint. She's not going to be running a publishing division. We're not going to Putnamize Random House. She's here so I can discuss with her the evolving economics of the book business. There's no one else I could do that with. She's going to do some big thinking about the future."

"I don't believe it for a second," says an editor at a rival publishing house, surmising that Grann's true role needs to be concealed because of a noncompete clause in her expiring contract with Penguin Putnam. "Otherwise, it doesn't make any sense."

"Phyllis can't help herself," a friend says of her sharklike inability to rest. "She'll tell herself that she's not going to be involved in operations, but she'll find a problem and forget what she said."

"I know that Phyllis believes she can bring some authors to them," says Martin Garbus, the publishing lawyer. It's true that Grann still enjoys the personal loyalty of tent-pole Putnam authors like Clancy, Patricia Cornwell, Nora Roberts, Robert B. Parker, W. E. B. Griffin, Robin Cook, Jack Higgins, and Lawrence Sanders, any two of whom would make a profitable imprint for Random House. Still, few of these writers will be tempted to follow her if she has no direct control over the editing and marketing of their books.

"I think maybe instead of buying another company," an industry sachem says of Olson, "he bought a person."

Grann's secret formula for success sounds rather simple. "Lew Wasserman taught me," she says, reflecting on the lessons of Hollywood management, "that you're only as good as the talent you have under contract and the talent that walks out the door every night. You have to take care of these people."

Taking these words to heart, Grann ran Putnam very much in the Steve Ross mogul mode, something Clive Cussler discovered four years ago when his contract was up at Simon & Schuster. "She flew out to Arizona to see me," Cussler says. "I said, 'I've been in the business for 30 years, and you're the first representative of a publishing house to come to my house.' "

Personal attention doesn't stop once an author signs up. "The little things are important," Grann says. "If you're coming to town to do a little Christmas shopping, it's nice to have a car pick you up."

And Grann catered to her authors; she even pampered them. "A publishing company with a lot of repeaters," Grann observes of the writers who produce bestsellers over and over again, "can afford to spend a lot more on its authors than on the machinery of publishing."

"We had a very heavy courtship," biographer A. Scott Berg remembers. "When I met her in 1989, half the books on the New York Times best-seller list were Putnam books. It was terrifying. She called me right after my Goldwyn came out and said that she wanted me to write a biography of Charles Lindbergh. She pursued me for a year. She'd call up and say, 'I'm coming out to L.A., can we have dinner? You pick the restaurant, bring anyone you want, I'll pay the bill.' And once you get past the photographs of the grandchildren, dinner with Phyllis is wonderful."

Berg worked on Lindbergh for eight years before calling Grann to find out who his editor would be. "She said, 'Send it to me. I'm going to be your editor,' " Berg remembers. "There was silence. She said, 'Don't worry, I'm really good at this.' I said, 'But you're running this company.' I thought it would be months before I heard from her.

"Within three days, she'd read it," Berg says, still astonished at the feat. "Within two weeks, she'd edited it. Big points, small points, she's got perfect pitch. She hears the music of a manuscript."

That ability to read quickly, and edit decisively, has been a central feature of her personality as well as her professional success. "Phyllis is a tremendous reader," confirms Stacy Creamer, a former Putnam editor. "Everyone had to keep up with her. If you couldn't read a manuscript overnight, you looked like a slow reader."


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