It looked like just another power breakfast. On June 26, Phyllis Grann huddled over coffee at the Harvard Club with friend and boss Peter Olson, chairman of Random House. Grann did most of the talking, but "it seemed like business as usual," reports a publishing insider who dined nearby. Yet just days later, Grann abruptly resigned her post of vice-chairman of Random House after only six months, setting the industry abuzz.
Word had it she was bored with the job, which gave her no direct control over any of the house's fiercely independent divisions, run by such famously retiring personalities as Ann Godoff and Sonny Mehta. "Peter hired her in a fit of inspiration but failed to give her any specific responsibilities," says one Penguin Putnam editor. "She didn't make a secret of her unhappiness."
As the first woman CEO in publishing, Grann made Penguin Putnam the envy of the business by concentrating on authors like serial blockbuster Tom Clancy. But the sixtysomething quit in a huff last September after disagreements with management.
When she joined Random House, some said her vague role foretold trouble: "It's not really clear what I'm going to do," she said at the time. "Peter and I are going to discuss it."
Clearly, it didn't work out -- though why is still up for debate, with some suggesting that Olson was disappointed when she didn't bring over her big-name "repeaters." As one former publisher close to Random House says, "When you bring in a high-powered person like that, it's not just to keep them off the street."
Perhaps to block an exodus, Susan Petersen Kennedy -- Grann's protégée and successor at Penguin Putnam -- went on a charm offensive. Tom Clancy didn't take much persuading to stay on. And Patricia Cornwell broadened her contract to include two more books. "Phyllis was not the only person here," says one editor. "There are a whole lot of us that Clancy worked with."
"Kennedy scrambled and defended her flank," says one source. "Penguin won."