After Katharine Graham died last July, she was widely eulogized for her journalistic courage and her business acumen. But the celebrated former publisher and chief executive officer of the Washington Post was something else as well: She was an extraordinary family business owner.
Because family firms mix the demands of business with the needs of their owning families, they’re often conflicted and difficult to manage. Mrs. Graham faced the many issues of leadership that are unique to family businesses and resolved them with intelligence and grace.
Her father, the Wall Street investment banker Eugene Meyer, bought the Post at a bankruptcy auction in 1933 and turned its leadership over to Mrs. Graham’s husband, Philip, in 1946. When she took over the Washington Post Co. after Phil’s suicide in 1963, it consisted largely of Newsweek magazine, two TV stations and the Post, then considered a mediocre newspaper.
Like many another family business wife, she had been a housewife—“a doormat wife,” as she described herself. She was terrified at the thought of running the company. Nevertheless, when she received offers to buy the company, she turned them down.
Her decision to run the Post herself after her husband’s death was all about family. The business meant a legacy for her four children, and it offered a chance to uphold the values that her newspapering family cherished. “I cared so much about the paper and about keeping it in the family,” she wrote in her Pulitzer Prize-winning autobiography, Personal History, “that, despite my lack of knowledge and feelings of insecurity, I felt I had to make it work.”
And make it work she did. Today, the Washington Post Co. is a $2.4 billion publicly traded media conglomerate, and the Post has emerged as one of America’s great newspapers. Mrs. Graham successfully passed this great company into the third generation without losing her children’s affection. Family businesses owners everywhere can learn from her shining example.
Consider how Mrs. Graham handled six common family business challenges.
• Learning the business. Most successors have an opportunity to learn their family’s business over a long period, working in it and being brought along by members of the older generation. Mrs. Graham, who had worked at the Post only sporadically as a reporter, had to learn quickly—and in a corporate environment where women were neither expected nor welcomed.
She knew nothing about business. “The mere mention of terms like ‘liquidity’ made my eyes glaze over,” she wrote. She set about educating herself in every way she could, seeking advice and knowledge from the circle of company executives Phil had pulled together as well as from others prominent in the news industry. In time, she tapped the financial and business wisdom of famed investor Warren E. Buffett, who became a major Washington Post Co. shareholder.
• Stepping out of her predecessor’s shadow. Eventually, all family business successors have to claim their own identity and establish their own authority. It’s rarely easy. Some Post executives were hostile toward Mrs. Graham and resented her many questions. Then, two years after she took over, she made her first big hire: Benjamin C. Bradlee. Eventually he became executive editor of the Post, and the two of them made history together when the newspaper published the Pentagon Papers and broke the Watergate story.
“Ben’s arrival changed my life in an unexpected way,” Mrs. Graham wrote. “He was the first person placed in a major position by me, and the difference between my relationship with him and my relationship with most of the people who had been at the Post before me was striking. Despite my controlling ownership, to those who were already there I was still the newcomer, the junior partner. Even though they were mostly friendly and generous, they were almost always the leaders and teachers and I was the follower. Ben and I, however, were partners, very much together in focusing on our common goals.”
By hiring Bradlee, in short, Mrs. Graham began to build her own team and to put her personal stamp on the company.
• Retaining family control. When Mrs. Graham took over the company, it was privately held. Her parents earlier had gifted or sold all their shares to her and her husband (with Phil receiving the larger portion because Kay’s father felt a man shouldn’t be in a position of working for his wife).
When the company went public in 1971, Mrs. Graham was careful to keep power in the family’s hands. Members of the immediate family owned all the Class A shares, which elect 70% of the company’s board, giving the family effective control. Mrs. Graham herself owned 30.8% of the Class A shares, which she bequeathed to a family trust.
• Being a boss. She was “the ideal boss,” wrote Post staff writer Robert G. Kaiser in a tribute to Mrs. Graham. She wasn’t perfect, he wrote—her insecurities could be troublesome, and he thought she was “too easily impressed by people with big titles.” Nevertheless, she was interested and engaged in what her staff members were doing, and she backed them up.
Sometimes family business owners manage employees too tightly and don’t give them room enough to do their jobs. But, noted Kaiser, “Katharine Graham gave her employees at the Washington Post the ultimate journalistic gift: absolute independence.”
In his own autobiography, A Good Life, Ben Bradlee said Kay Graham had given him the chance to do what he was put on earth to do. “There is only one thing an editor must have to be a good editor, and that is a good owner,” he said.
• Practicing stewardship. Mrs. Graham committed herself to preserving and growing the company for the next generation. And she managed succession beautifully—first by letting her four children follow their own hearts. None was coerced into the business. Two joined the company: Donald E. Graham, her successor; and daughter Lally Weymouth, a writer for Newsweek and the Post. Son William became an investor, and Stephen is a stage producer and philanthropist.
Don Graham was carefully groomed to succeed his mother, but he also enjoyed the freedom to make his own choices. Although his mother wanted him to join the company after he served in the U.S. Army in Vietnam, he opted to join the Washington, D.C., police force instead. He saw police work as a way “to become acquainted with the city, its people and its problems,” Mrs. Graham recalled. He joined the Post in 1971, gaining experience throughout the company with a series of mentors.
When Don Graham was named publisher of the Post eight years later at the age of 33, New York Times columnist James Reston predicted that the young man would be the “most distinguished publisher” of his own generation. “No one has been trained for it better or used the time of training so well,” Reston observed.
• Letting go. Like many family business owners, Mrs. Graham loved her work and enjoyed running the show. Letting go was not easy, but she did it anyway. She was 61 when her son became the Post‘s publisher. She stepped down as chief executive officer of the parent company in 1991, at age 73, and as chairman two years later. Don succeeded her in both positions. It was a smooth and carefully orchestrated transition. The changes were expected and accepted by family and employees alike and admired by Wall Street.
And Mrs. Graham found new challenges for herself. She remained chairman of the executive committee of the board and spent five years writing her remarkably candid and insightful memoir—a family business tale if there ever was one.
Mrs. Graham’s family was both her curse and her blessing. She had an unloving mother, a father who bypassed her in handing down the company’s reins and a brilliant but mentally ill husband who took his own life. Yet this very family inspired her to endure and to achieve—and in doing so, she became a model for women in family business. She gave them hope that they could aspire to lead their own families’ companies.
Mrs. Graham also used the business to implement her family’s deeply held ideals. Like her father and her husband, she believed the country depended on a free press and was committed to the paper’s independence.
Katharine Graham understood that passing on a family business isn’t just a family matter. It’s also of critical concern to the community, and sometimes to the country.
Sharon Nelton, formerly family business columnist for Nation’s Business, is a free-lance writer who lives in Downingtown, Pa.