The Widow & The White House
The White House Enemy
“The idea of living with that gang in the White House whacking at you for four more years was depressing beyond words.” -Katharine Graham
We live in a highly charged political environment. It's been like this for decades, if not centuries. Everyone in nearly every democracy across the world will know what it's like to suffer the anguish of having a politician with the opposite ideals as you elected to be your leader.
Just less than half of Americans right now are suffering with the shock of seeing the opposite of who they wanted ascend to the Oval Office. Just four years before, it was the reverse situation. The other half of the country became embarrassed, as extreme supporters of President Trump stormed the capitol, seeking to be heard, feeling marginalized. And as embarrassing as the capitol storming was, four years before that, many on the other side accused Trump of the same “stolen” election results.
Now it all seems like a distant memory, as today will seem in four years...
The reason I start off by evoking your emotions associated with elections was to help you imagine what if not only your ideals were in jeopardy with each passing election, but your family's net worth, your business, and your reputation to go along with it... perhaps even your life?
That's what was on the line for Katharine (Kay) Graham as she courageously pressed on with the publishing of the emerging facts her reporters Woodward and Bernstein were uncovering on the Watergate scandal.
The entire paper was dedicated to uncovering the unsavory smell that came from a burglary of the Democratic National Committee's (DNC) office inside the Watergate building, one of the most unmistakable buildings along the Potomac River in Washington DC.
Katharine, who had been both a registered Republican and Democrat at different points in her life, would have friends on both sides of the aisle. Her parties were often more well-attended than the White House's, as it was a place she intentionally would invite people of different parties, different backgrounds, and different occupations to come, exchange ideas, find common ground, and at least laugh about the tense debates happening across the National Mall.
Richard Nixon didn't like to laugh. He was over-ruled by his bottom brain fight-or-flight instincts, particularly later in his career. Everyone was either with him or against him, and he decided long before Watergate, Kay Graham and her Washington Post was an enemy. While her paper at the time would not endorse any political candidates, it was clear through editorials, that the paper supported JFK during Nixon’s first campaign, and on his second Presidential run, clearly supported Hubert Humphrey.
For Nixon, there was no cross-aisle debate, no empathy (for that is a top right brain strength), it was battle -- victory or death. He would pull out all the stops in an effort to win an election, and it was very successful.
For his re-election, he would start the Committee for Reelection of the President (CRP) which would do "whatever it takes" to get him re-elected. They would try to spy on the DNC, and broke into their headquarters in the Watergate to tap the offices. They would commit federal crimes and do a pretty good job covering it up. In fact, it was the cover-up that really ended up consuming the Nixon administration in the end. It would take years for two single reporters at the Washington Post working nearly non-stop to follow the footprints all the way back to his Oval Office.
In his re-election, he won by the largest margin ever seen at that point in US History -- winning a stunning 49 states. He won his re-election even as the Post was chasing down and publishing every detail Woodward & Bernstein uncovered about the corrupt CRP and the many bribes and burglaries it would commit on Nixon's behalf.
After the election, Nixon was "untouchable." The victory was decisive. The Washington Post had seemingly hit a dry spell in their search for more clues, and more direct links back to the most popular and powerful man in the world at the time. And his enemy #1 was Katharine Graham and the Washington Post. Nixon was a street-fighter, and he was willing to play dirty, writing:
“ … With regard to the Washington Post I reaffirm the directive I gave two weeks ago but which has not been carried out. Ziegler under no circumstances is to see anybody from the Washington Post and no one on the White House staff is to see anybody from the Washington Post or return any calls to them... I [am] now reiterating the policy that I want followed out—just treat the Post absolutely coldly—all of their people are to be treated in this manner.… If there is any exception to this directive you are to raise it directly with me and I will determine on a case by case basis, but under no circumstances will any individual on our staff, on his own, move in other directions.”
That was actually one of the mildest directives Nixon would issue regarding the Washington Post. But it shows the level of paranoia he had -- and the steps he would personally take to extract revenge. He wouldn’t foresee the consequences, he would only see an enemy.
And that's the problem with being a street-fighter. You may win debates. You may win 49 of 50 states. But as the bottom brain stock market has humbled every "player" that has played the game, each victory is only good for a moment in time. Street fighters, using their bottom brain EQ, cannot see beyond the next few moments. They are only reactive. They are very rarely pro-active. They can very rarely see possibility.
While Kay had friends everywhere, including inside the Nixon administration, her last remaining friend at the White House, Pete Peterson, was legitimately concerned for Graham's safety in the wake of the election. “Kay, I don’t know what the truth is, but there is a group of very angry people who feel you are out to get them. I hope you are using rigorous journalistic standards. If you are wrong, it’s serious; they will get you.”
Of course she and the Post would always use the highest journalistic standards -- always demanding that a rumor or bit of information was backed by at least two separate independent sources before they would print it. Lead editor Ben Bradlee discussed in his memoir A Good Life that the Post would only publish the tip of the iceberg when it came to the rumors that were chaotically spinning out from the White House during the peak of the Watergate investigation. At times he would demand more than three separate confirmations, the allegations seemed so unbelievable to be true.
At the time, Peterson wasn't being hyperbolic about Nixon getting her. At the climactic moment of the Watergate cover up, one of the Nixon administration’s defectors, code-named Deep Throat by the Post, would admit to the editorial staff at the Post that their very lives were in danger.
How did it get to that point?
How was it possible that the so called "leader of the free world," and his White House was threatening the lives of some of the most well-respected and most admired citizens in Washington?
Because it's classic bottom brain. Nixon was a street fighter. He would do "whatever it takes" to get re-elected as President.
He was the ultimate salesman. And that's the skill of the bottom brain.
Nixon and The Bottom Brain
"The main thing is the Post is going to have damnable, damnable problems out of this one." Richard Nixon from his own recorded transcripts
In the end, it wasn't actually the Watergate burglary that would bring the President down, but rather, the extortion, lies, obstruction of justice, and the overall cover up that he and his administration engaged in to keep his participation in the Watergate scandal a secret. It involved nearly every layer of the FBI, CIA and the White House.
That is the dark side of the bottom brain -- which is the source of our "E.Q." (Emotional intelligence), which is pivotal in evoking emotional reactions to sell a point. Or to win an election.
The truth is, that it's human nature to use "System 1," or the fast-thinking emotional parts of our brains, to make nearly all of the decisions in our lives -- including who we will vote for. Very few of us wait for the slow, deliberate, rational and critical thinking parts of our brains, "System 2," or our "top brains," to make these decisions.
We can see this play out today in nearly every election. When we consider who to vote for, very few of us weigh the collective policy stances on both sides on offer. We reference the character of the candidate, their trustworthiness, or the "hidden agenda" of the other side.
With great friends on both sides of the political spectrum (personally, I've grown apolitical), I've heard conspiracy after conspiracy on both sides of the political divide.
This is also classic bottom brain.
Nixon can demonstrate very well for us.
He was so entirely paranoid of everyone, including those most loyal to him, that he would have most offices in the White House bugged. He actually thought these records would help to prove that he was on the right side of history. Unfortunately, as we all know today, it did exactly the opposite.
Conducting a meta-analysis of Nixon's key behavioral traits from his own recordings, we can see that he was nearly all bottom-brain.
Key Behavioral Traits of Richard Nixon
Defensiveness & Self Justification - bottom left brain
Appealing to Patriotism - top & bottom right brain
Paranoia & Distrust - bottom left brain
Emphasis on personal struggle & humble origins - bottom left brain
Strategic use emotion - bottom left & right brain
Pragmatism & flexibility - top and bottom right brain
Meta-Analysis Source: Perplexity
Of the thousands of pages of Nixon transcripts, speeches, and discourses, there is almost no top brain, critical or rational thinking displayed by his own words.
When I think of the bottom brain, I often like to think of the classic "ego," in Greek terminology. Neurobiology is not this easy. It's impossible to characterize a part of the brain as the "ego," as it often co-opts the utilization of top-left-brain language. It's the part of our brain that we share with nearly every animal on the planet -- the world of fight or flight, of survival and our most self-centered thoughts. It's the world of the victim conscience. And, using the Sigmund Freud theory of projection, what it hates most about itself, it hates most in other people. Unable to see its own flaws, it's the part of our brain that can be most susceptible to hypocrisy given this projection. Nixon, again, demonstrates this very well through his campaign promises.
Nixon's Key 1972 Campaign Messages & Later Outcomes
Peace & Foreign Policy - he highlighted progress in the Vietnam war, and "The Nixon Doctrine," called for allies to take more responsibility for their own defense. While Kissinger was able to pull US troops completely out of Vietnam, the peace treaty he brokered was short-lived, with war resuming during Nixon's second term, continuing until the country was re-unified between north & south;
Domestic Achievements - in particular, he claimed victory in controlling inflation (this was incorrect -- it never fell, and the worst inflation prints were still yet to come under his own Presidential administration, rising from 3.4% in both 1971 and 1972 to 6.2% in '73, and then 11% in '74. It would not start coming down until the 1980s thanks to easy monetary policy and price controls that Nixon tried to use to fix the problem;
Unity & a New Majority - he called for a "new American majority" that transcended party lines. This is the most laughable part of his platform, as he was highly derogatory towards his political enemies, and frequently used profanity when talking about them;
Experience & Leadership - portraying himself as a president focused on governing as opposed to campaigning (this is utterly false, as he fixated on his re-election, and would resort to bribes and the Watergate burglary in order to use every possible advantage).
Meta-analysis source: Perplexity
In hindsight, we can see that the very key themes of his 1972 election campaign, which resulted in him winning the most states ever by a Presidential contender, were hallucinations at best, and lies at worst.
Again, a good Presidential candidate needs to appeal to voters' emotions, and their System 1. It takes a very strong EQ to do this. The problem is when it becomes only emotional. As we can tell from hindsight, Nixon portrayed himself often as the opposite of what he was.
The messages went over very well, particularly with the youth vote in America. But they were not truths. When we start to tell lies, we become entangled in a web in which it becomes nearly impossible to differentiate between truth & falsehood. We forget who we've told what. It takes extra effort to apply consistency to the lies. As Nixon showed, it can easily get out of control.
But his predecessor, JFK, was no different. Ben Bradlee, the same lead editor that would take down Nixon's presidency and who was best friends with "Jack," would admit in his memoir that he was deceived by nearly the entire facade of one of his closest friends. He knew nothing of the significant number of mistresses, nor of some of his health issues.
As Bradlee wrote in his memoir, “As Richard Reeves puts it, Kennedy 'had little ideology . . . and . . . less emotion. What convictions he did have . . . he was often willing to suspend, particularly if that avoided confrontation . . . or the risk of being called soft.'”
So what separated Nixon from JFK?
Perhaps Jack's reputation was saved by the assassin -- as tragic as that sounds. Nixon actually did deliver some major accomplishments, possibly even more than Jack did in his 1,000 days in office. His NASA efforts fulfilled Kennedy's dream and landed a few Americans on the surface of the moon. He crossed traditional party lines and established the EPA (Environmental Protection Agency), and he opened up diplomatic relations with China, becoming the first President to visit the country.
Although he told lie after lie, there was some substance to his administration.
In his earlier years, he would try and exhibit some public humility, emphasizing his humble roots and working class background. Much of this early humility was mostly for emotional impact, and according to a meta-analysis of his speeches, he exhibited essentially zero humility as his career progressed. Instead, his speeches and transcripts were full of confidence, no humility. In his 1968 presidential nomination acceptance speech, his campaign would be "committing ourselves to the truth" in a highly confident manner. During the Watergate investigations, he would lead only with confidence, not humility, when he would emphatically state "I am not a crook."
This evolution from feigned humility to only confidence wasn't accidental. It is easy to see for one looking, and with an AI-companion to pour over hundreds of thousands of words from the horse's mouth.
Kennedy, on the other hand, exhibited a stronger balance between humility and confidence, with many statements pointing to his team-orientation, as opposed to a self-orientation. One of my favorites exhibiting classic Jack is, "Greatness and strength are not our natural right. They are not gifts which are automatically ours forever. It took toil and courage and determination to build this country and preserve our freedom.”
For someone that was supposed to be pre-disposed to loving JFK, Bradlee offered very few compliments of the assassinated President in his memoirs. But that was the style of Bradlee, and it was the style of Graham and her whole Washington Post.
A Vulnerability Culture
"I sometimes privately thought: If this is such a hell of a story, then where is everybody else?” -Katharine Graham
Before Brené Brown made "vulnerability" a cool topic to focus on, Kay was publicly vulnerable, as was Ben Bradlee. He would readily admit to his faults, his affairs, and all of his most regrettable setbacks. Katharine would do the same thing.
Described by her kids as "the world capital of self-doubt" earlier in her career, she would publicly acknowledge her self-doubt, and reveal things about her own thoughts that few would have had the courage to. This incredible honesty quickly dis-armed even the most defensive people, and she was seen as a "great friend," to literally everyone there was to know. "'Oh, Princess Diana,” she would say. “Such a good friend. Much more there than is obvious.'”
This is not an understatement. Perhaps you've heard of Truman Capote's famous black & white ball at the Plaza Hotel? It was supposedly the party of parties. You were no one if you weren't there.
Not only was Kay there, but he threw the entire ball in her honor. She greeted every attender with Capote as a sort of "debut" to society.
True to her upbringing by her father who taught her to question everything, including her own convictions, she would seek out all her most trusted friends' and advisors' opinions before she would make highly impactful decisions.
This is seen by some as a weakness, but I consider it a great strength. All of the best Presidents, from George Washington to Abraham Lincoln, have made it a signature of their administrations that they would invite a "team of rivals" atmosphere to question everything. While this is an incredibly clever mechanism to make sure that decisions taken are "whole brain" decisions, it is nearly impossible for someone operating from the bottom brain to take criticism constructively.
The bottom brain always takes criticism personally.
Nixon actually believed that he was the victim of the investigations which ended in him averting an impeachment by becoming the first president in US history to resign from his office. It's funny because both Katharine Graham and Ben Bradlee admitted that had it not been for Nixon's own paranoia triggering him to record all conversations in the White House, the investigation would have very unlikely ended up in his resignation. Until those recordings became public knowledge, they didn't have a smoking gun. In fact, it was the very discovery of the recordings that would end Kay & Ben's wandering in the desert. It was Nixon's own actions that would bring him down. Isn't that poetic?
It is in hindsight, but perhaps the most compelling part of Kay's and Ben's stories aren't the solemn victory that they would never gloat about. It was that they expressed some terror by the idea that they were challenging the political institutions of the country they loved. They didn’t want to lose, but they also didn’t really want to “win.”
From Silver Spoon to Mission
"A ship in a harbour is safe but that is not what ships are built for." -John A. Shedd
Becoming Katharine Graham wasn't easy. Born with a silver spoon, it wasn't a life that anyone would have imagined she would have gone through at the beginning.
Her father Eugene Meyer was enlightened and a man before his time. In 1904, he was quite literally the first person to create an investment boutique on the idea that he and his team would study the fundamentals of the company they were investing in. He was determined to be a constructive, value-add investor and stick with the companies he researched.
This approach triggered his orchestration of merging five chemical companies to form Allied Chemical, the largest chemicals company in the US for half a century. It would later get bought out by Honeywell, but its formation in 1920 and unprecedented scale of operations allowed it to remain financially resilient during the Great Depression.
Allied's dividends were key income that Eugene Meyer used to buy the defunct Washington Post in 1933, at the bottom of the depression, and continue to fund its operating losses until it was able to break-even, more than a decade later.
Meyer's Wall Street operation was the first research department of any Wall Street house. Everyone else was just gambling. Although it allowed him to print respectable returns, he had multiple busts in this incredibly volatile and emotional market. It was also during the Great Depression that John Maynard Keynes would infamously remark, "markets can remain irrational longer than you can remain solvent."
Armed with fundamental research, Eugene Meyer not only stayed solvent, but poured his capital, blood, sweat and tears into making the Washington Post a formidable paper. When he bought it, the Washington local news market was fragmented into at least five different journals, and the Post was at the bottom of the totem pole.
The Post soon became a family mission.
As Kay's mother wrote in her diary the day he agreed to buy the Post for one sixth the price he offered five years before, "… he [Eugene] has suddenly decided to buy T.P. [“The Post”] If he succeeds it will be a sensation and we shall have a reputation for Machiavellian behavior. I was reluctant at first because it means more hard work at once but after all these are not times in which to loiter. Also it means a heavy expenditure but what after all is money for if not to be used.…”
Years earlier, she had written of Eugene, "If I had any doubts of the value of his personality, they would be swept aside by this one fact, that he demands greatness of me."
Only one year after her father purchased the defunct and loss-making Post, Katharine would take up various jobs within the paper. As she would recall:
"When I went to college a year after the purchase, my parents and I corresponded constantly about what was happening. I read the Post daily, commented, encouraged, and even criticized, while my parents, particularly my father, told me in great detail about what was going on. I found myself deeply involved with the struggle to improve the paper.
What I didn’t grasp at the time was my father’s real bias in my favor, the depth of his caring. My mother’s hints that he had a crush on me and the stories she relayed of his hoarding my letters didn’t sink in. In retrospect, I can see this intense affection we had for each other and what an enormous influence he had on my life, my plans, and my thinking. I’m not sure why I wasn’t aware of it at the time, but it’s clear to me now that he believed in me, which became a very powerful emotional asset as I grew older and gave me a measure of security which I greatly needed.”
It turned out, Meyer would demand greatness of everyone around him. To inspire the staff of the paper, he offered to share the "progress" of the paper with the entire staff. There were still no profits 8 years into the journey, but Meyer would still share two-thirds of the increase in gross profits with the workforce. The Post was still not first in the market, but circulation grew from 50k when he bought it to 130k by 1941.
It was very hard work.
While many point to "local monopoly" status that many newspapers enjoyed in the 1970s and 1980s, in the 1940s and 1950s, it was cut-throat. As Kay recalled in her memoir:
“Despite all the evident improvement in the paper, however, it was in no way certain that the Post would survive. The Washington newspaper scene was very chaotic, particularly for a town its size. No other city of half a million had so many papers, none of which was a fly-by-night. The struggle for survival was omnipresent and at times a discouraging burden to my father, who was nearing seventy. Seeing him as I did each day, I was constantly worried about how tired he seemed and how hard he was working. These past ten years had taken a tremendous toll.”
When it came time for Eugene to retire from his endless effort, despite his incredibly strong relationship with his daughter, it was still the 1940s. There was never a question who would manage the paper. Although it was given to both Katharine and her husband, Phil Graham, there was only one option for a manager in the 1940s -- it was a man. Although Eugene deeply believed in Kay to the point he had "a crush" on her, there were no female company managers at the time.
Phil became the CEO of the Post, and would lead the paper to becoming #1 in the Washington market, and would start the company's acquisition track record which later became famously great.
Unfortunately for Phil, and Kay, he was bipolar, and was diagnosed with manic-depression. In some of his worst fits, he would try and divorce Katharine and take her ownership of the company. While he would start to get some treatment for his mental illness, it wasn't effective and he would ultimately take his own life.
Perhaps because of Phil’s effort to take the Post from her, she was very clear when he passed that she would lead the company. It would remain a family company, and despite the many media suitors that came to try and buy the property from the widow, she was resolute and confident in her decision to lead the Post.
Courage in Adversity
"Being deeply loved by someone gives you strength, while loving someone deeply gives you courage." -Lao Tzu
While Katharine took a brief vacation to help clear her mind and her emotions, when she was heading back to the US, a friend in Paris asked her why the hell she wouldn't remarry? It was seen as the only job suitable for women at the time. Yet that was the furthest thing on her mind.
From that moment forward, the "world capital of self doubt," would be resolute in her decisions. She wouldn't waver. It's hard to say Kay had any confidence. In fact she regularly admitted to not having much confidence. It was beaten out of her first by her mother, and then by her husband.
Yet, where she lacked in confidence, somehow she made up for with her courage. She didn't even realize at the time, but by becoming the chief of The Washington Post Company, she would become the first female CEO in the Fortune 500. Her role was her family's calling, and with no family members left but her small children, it was an obligation -- not just a privilege. In her own words:
“Yet, despite all my insecurities and misgivings, I was gradually beginning to enjoy myself. And unconsciously, somewhere along the line, I seem to have begun redefining my job and what it was I was doing. Indeed, within the first months of my new working life, the color started returning to my face, my jaw was beginning to unclench, and what I had once called 'my initial girl-scout type of resolve' was turning into a passionate interest. In short, as I said in a speech at Newsweek, I 'sort of fell in love.' I loved my job, I loved the paper, I loved the whole company. As I wrote Frank Waldrop, 'I suppose it’s odd to speak of loving the Company but all I’m doing is agreeing with Colonel McCormick when he said a newspaper is a living thing.…'”
The company would become the real love affair of her life. And she gave everything to it. While she would exhaust her entire savings in order to keep the Post from going bust during Phil's leadership, she would later give all of herself, her reputation and her soul to the many difficult decisions that were awaiting her, as the Washington Post became the most important paper of the city.
As Lao Tsu would say, this love gave her courage. And boy, did she need courage. Only a few years after becoming the publisher of the Post in 1969, as she and her lead editor Ben Bradlee were trying to build the Post's reputation to rival the New York Times,' Bradlee and his staff would do "whatever it takes" to obtain the original Pentagon Papers that the New York Times was able to obtain in an exclusive leak.
It was the hottest story in Washington, and the Post was left out by the whistle-blower. But when a federal judge issued an injunction to the Times and prevented it from publishing further details, Bradlee would spot an opening.
While the Times had months to scour the >4,000 pages of internal investigations on the history of decision-making in the ill-fated Vietnam war, Bradlee and his journalists, working covertly from his living room, had a mere few days to come up with juicy stories that would also not jeopardize national security - which would have violated the Espionage Act of 1917.
When they were finally ready to start printing fresh details regarding the Pentagon's embarrassing study, which incriminated Nixon's rivals, Johnson and Kennedy, the Post's lawyers and Kay's most trusted advisors protested that the Washington Post would be violating the same federal injunction that was issued against the New York Times.
In a dramatic moment, with the Post's presses just hours away from printing the final edition of the June 18, 1971 Washington Post, the dispute between the publishers and the lawyers would pull Katharine Graham away from a toast she was giving at one of her famous parties.
Now if you've never seen Tom Hanks and Meryl Streep in The Post, I would highly suggest you rent it next time you're in for movie night. But as a spoiler to perhaps the most dramatic scene in the entire movie, it was on the phone during one of these cocktail parties that Katharine was asked to make a decision.
All of her lawyers, and her most trusted advisor highly recommended the Post not publish on the Pentagon Papers. If the company was seen as violating the Espionage Act, it would be breaking federal law, for which both Ben Bradlee and Katharine Graham would have possibly gone to jail for. To add pressure to the decision, it coincided with the IPO of the Washington Post's stock. The underwriters had an "out," on the IPO if the company was seen committing a federal crime.
After listening to every lawyer, advisor, and journalist on the matter, most of who advised her that her own butt was on the line, Kay would decisively tell Bradlee, “Go ahead, go ahead, go ahead. Let’s go. Let’s publish.”
It was "the most difficult decision of her life," (as described by her children on this recent podcast). Yet, in a cruel way, it was really only her first major trial.
While the Washington Post received a federal injunction the same day it published its first story on the Pentagon Papers, the Supreme Court would only a few days later over-turn Nixon's efforts to keep the papers confidential, and would rule in favor of the Post and the Times.
Judge Hugo Black would write in the majority decision, "In the First Amendment, the Founding Fathers gave the free press the protection it must have to fulfill its essential role in our democracy. The press was to serve the governed, not the governors." It fulfilled the exact mission that Graham's father Eugene Meyer gave the paper.
As Bradlee, who was at first a skeptic on Kay, wrote to her in the wake of the outcome:
"Doing business with you is so much more than a pleasure—it’s a cause, it’s an honor, and such a rewarding challenge.
I’m not sure I could handle another one of these tomorrow, but it is so great to know that this whole newspaper will handle the next one with courage and commitment and style."
From that moment forward, Kay and her Post were a force to be reckoned with -- on par with the reputation of the New York Times. In some ways, it was a warmup for the Watergate investigations, which would be far more taxing with the White House fully committed to eliminating its enemy.
Rescuing Democracy
“All that crap, you’re putting it in the paper? It’s all been denied. Katie Graham’s gonna get her tit caught in a big fat wringer if that’s published. Good Christ! That’s the most sickening thing I ever heard.” Nixon Attorney General John Mitchell
Despite the landslide election which left the Nixon White House ever more aggressive, and the Post feeling completely isolated, Katharine would encourage Bradlee, Woodward and Bernstein to keep going. It drove them all to "whatever it takes," levels. It would also do the same to the defectors in the administration.
The Nixon administration would resort to economic warfare and would challenge the renewal of some of the Posts' television stations' licenses. It was the first time it had ever happened. Not just by the White House, but ever.
The Washington Posts' stock cracked from $38 to $16, and never once, did Graham -- who clearly had the most to lose -- ever ask her staff to lay off. In fact, she did the opposite. Humbly writing in her memoir:
“I have often been credited with courage for backing our editors in Watergate. The truth is that I never felt there was much choice. Courage applies when one has a choice. With Watergate, there was never one major decisive moment when I, or anyone, could have suggested that we stop reporting the story. Watergate unfolded gradually. By the time the story had grown to the point where the size of it dawned on us, we had already waded deeply into its stream. Once I found myself in the deepest water in the middle of the current, there was no going back.”
But the moment that it got darkest, was when the tide started to turn. Ongoing prosecutions of the Watergate robbers would result in convictions, as well as new testimony that the "higher ups," in the White House were a part of the scheme. Convictions went higher and higher through the administration until Nixon was forced to take responsibility for the Watergate scandal.
"All of this created a huge stir in the newsroom. Howard Simons said to staff members, 'We can’t afford to gloat,' a sentiment that I shared. Though Watergate was no longer a lonely project for the Post, we were proud of the part we had played, but it was now on its way to becoming a national tragedy, and we had no impulse to flaunt our role, though every reason to feel relief at vindication.”
In fact, the Post was the one news source in the wake of the admission of Nixon's part in the process that was most restrained. Other news houses ended up taking down the President, as the knowledge of the recordings and then release of such recordings broke.
All of a sudden the entire country knew that Nixon had been lying the whole time. And that was it, the straw that broke Nixon's back. It wasn't the burglary, the cash bribes, or even the corrupt administration. It was the discovery of unending lies. As a covert CIA agent, staunch Nixon supporter and journalist Joe Alsop would later write to Kay:
"A very dangerous system had grown up in the White House, which would have threatened this country if it had continued. It was destroyed by you and the other leaders of the Post and the Post reporters almost single-handed.… So I send you all my warmest congratulations, and also my apologies for giving our miserable President the benefit of the doubt—which now turns out to be a completely wrong thing to do.”
One of the things I love most about the Watergate story is not that it was a heroic defense of American values and democracy, nor that it proved that the widow defined for her "self doubt" had courage beyond measure. I love that it came from two pretty much unknown journalists, Bob Woodward and Carl Bernstein.
But as Katharine wrote in her memoir, it had to be so. It took years of grueling 16-18 hour days. They had something to prove to the world, and even after the many dead ends and Bradlee refusals to print their findings without more than two independent sources, they wouldn't stop. While Bradlee would credit the ownership of the paper (Graham) as being one of the primary reasons Watergate ended as it did, it really took the highly complementary (almost opposite) skillsets of Woodward & Bernstein. Graham noted:
"In some ways it was a natural pairing, since their qualities and skills complemented each other. Both are bright, but Woodward was conscientious, hardworking, and driven, and Bernstein messy and undisciplined. He was, however, the better writer, more imaginative and creative. In other ways the relationship was oil and water, but the end product came out right, despite—or perhaps because of—the strange mix.”
It was a left brain and right brain partnership.
It required both skillsets -- not just one.
It also required the rebellious risk-taking appetite of Ben Bradlee paired with Kay Graham's conservative, measured and considered approach. Bradlee's bottom-right brain's aptitude was counter-balanced by Kay's top right brain. That's the place where our best judgements are made. It literally does not have words at its fingertips. It feels, rather than talks. It loves, and it has courage. It does not naturally have confidence like the bottom-right brain does.
Graham would not take any credit for Watergate, in fact she credited it mostly to luck. It was a solemn victory, and the only relief was not having the White House as her enemy anymore. But unfortunately for Graham, when one enemy went away, another one would appear during these years.
Thankfully, for her next major challenge, she would have a new trusted advisor on her side -- one that all of her advisors and fellow managers told her to be careful with.
A Public - Family Company
"Courage is resistance to fear, mastery of fear -- not absence of fear." -Mark Twain
When he first wrote to Katharine Graham, the Pentagon Papers had already happened, and Watergate had happened. Katharine Graham was a well-known entity. But he was not. In a town that ran the world, Kay Graham knew everyone there was to know. And she did not know this new investor from Omaha that bought 10% of her company.
Writing to her, Warren Buffett fully acknowledged that he was buying into a family-run company. "This purchase represents a sizable commitment to us—and an explicitly quantified compliment to the Post as a business enterprise and to you as its chief executive. Writing a check separates conviction from conversation. I recognize that the Post is Graham-controlled and Graham-managed. And that suits me fine."
It was one of his earliest major bets. When Kay met Warren for the first time, in California, she took her son Don with her. At that meeting, Warren offered to assign his entire voting interest in the company over to Kay.
While Buffett's 10% voting interest was worthless compared to the Graham family controlling all the A-class shares, the signal was hugely trust-building. She walked away from meeting Buffett and his partner Munger knowing they were the "two smartest men" she had ever met. And she would call on Warren, sometimes 2-3 times a day. When she had to face the scariest audience of all, the Wall Street analysts, he was there supporting her.
As Buffett recalled, “When I first met with Kay, she was wary and scared. She was terrified by me, and she was intrigued by me. And one thing about Kay was that you could tell. She was not a poker-face type.”
Buffett was the ultimate poker player, and he had mastered the game. Graham, who had already taken down the White House, and lived to tell the tale, was filled with self-doubt every time she faced the stock market.
In many ways, not receiving recognition for the decades of hard work to elevate the status of the Post, and generating industry-leading profitability, was one of the hardest things for her to come to terms with. Who better than having Warren Buffett re-assure you that, eventually, the hard work would pay off.
"He told me that our meeting had deepened his feelings about The Washington Post as his 'favorite investment.' He consistently renewed the promise of recognition someday by the stock market, saying that he knew it must be 'discouraging to management to have poured the efforts that you have into profit improvement—with terrific results and an obvious momentum which promises more to come—only to be greeted with a big yawn in the stock market. It won’t be permanent.'”
Buffett would encourage Kay to embrace the idea of the company repurchasing its shares -- a highly unusual maneuver for a company in the 1970s. The board not only approved of the repurchases, but over the next two decades, the company would buy in 45% of the shares outstanding -- and it wasn't done. The Graham Holdings Company today (the successor to the Washington Post in the wake of the sale of the newspaper to Jeff Bezos), continues to be an avid cannibal.
Not long after Buffett became one of Kay's most trusted advisors, and even before he became a board member of the Post, the Graham family would face their most arduous challenge yet. Tension had been building with the incredibly powerful unions that would run the printing presses. In fact, very public mounting tensions between the company and its workers was one reason why shares remained so cheap that Buffett would continue buying.
For a company that was rescued by Eugene Meyer, who not only dedicated ⅔ of the increase in gross profits to labor, but would later gift a portion of his shares to every employee of the Post, the labor movement would forget all of this history of the family treating them well, and would even forget the lack of consistent profitability of the company.
The Post had 13 unions within the work-force, and they would use their control of the mechanics of getting the newspaper out every day to their advantage. They would have continuous slow-downs, which would intentionally delay or even shorten the length of the paper. These slow-downs would come during a particularly vulnerable moment for the Post in the 1960s and early 1970s, when it was dealing with not only formidable competition, but all of the battles with Nixon's White House.
The mounting labor tension came at a time when computers disrupted the old "hot-metal printing" process that was used as far back as Ben Franklin's Poor Richard's Almanac. It reduced labor intensity by >100x, allowing the company to possibly limp along in case the unions would call a strike.
And strike they did. As tensions would mount throughout the early 1970s, they reached a breaking point in 1975-1976. By then, all of Katharine and her son Don's efforts to learn how to keep the presses rolling without the unions would end up coming in great handy. Unfortunately, the unions decided to vandalize and set fire to most of the equipment.
The public company re-became a family business. With assistant general manager Don Graham leading the charge, everyone pulled together to get the paper out without the more than thousand laborers that were typically involved in the paper's production. All top managers would have to pull two jobs, with most of the remaining employees and journalists resorting to living at the office in order to keep the paper functioning.
Even Warren Buffett would come and help in the process. Somehow, the Post was running without the majority of its work force present -- and it did so for five months.
"Warren was at my house on the second Sunday morning of the strike when the Post was delivered. We were like two children, standing at the door, amazed to think that we had printed nearly 650,000 copies of the paper in our own plant, only about fifty thousand short of the normal press run."
Despite being accused of "profit maximizing" and being overtly greedy, Katharine Graham would continue to negotiate with union leaders, offering them the highest wage of any newspaper worker in the country. They all believed Kay would "cave in," to their demands for even more.
When the leaders rejected her "best and final," and after heavily weighing the decision with her most trusted managers and advisors, she took the news to the floor of the fifth floor newsroom -- the largest room that the remaining employees could gather in. She told them that she would begin hiring permanent replacements if their final contract was not approved within days.
“Like the decisions made by each of you who continued to work in the strike, my decision was neither simple nor easy; and like your decisions it required me to weigh the claims of a variety of responsibilities. My conclusion is that I cannot in conscience permit a situation to continue in which men and women in our trade unions, many of whom have worked here for many years, are faced with a bleak future because they must honor the picket lines of a group of men who are the highest-paid craft union workers in the building.”
The next day, nearly a thousand people lined up outside the Post's offices to apply for the new jobs. While the paper had functioned without union support for nearly half a year -- it would survive from that moment forward with no need for the pressmen’s union.
"IN SOME WAYS, we obtained by accident what is given to few in their lives—a new chance. Though this was a strike that was not looked for, it was one that was desperately needed. As I told Ben at the time, in an odd sense the strike was 'a business-side Watergate that fell on our heads but then had to be pursued.' We had wanted to accomplish gradually over many contracts what we were not only enabled but forced to do in one blow as a result of the strike.”
While the battle with the White House would put Katharine on the map the world over, it was the management of the union strike hitting her in her core that solidified Katharine Graham's courage in the face of great, great adversity.
By the time she came through the strike, in heroic fashion for the business community, particularly in DC, no one took the widow for granted. Not the President, not the workers, and certainly not investors.
The Humble Legacy
"Courage cannot be counterfeited. It is one virtue that escapes hypocrisy." -Napoleon Bonaparte
While it would seem that the first decade in the wake of her husband's suicide would be the most trying years, weirdly, in her own words, those were not difficult for her. She was resolute in standing up for her family company, for morals, for free speech, and for her father's legacy.
“In certain ways, the defining period of my working life was over. During the turbulent years from 1971 to 1976, we had been through the major public dramas of the Pentagon Papers, Watergate, and the pressmen’s strike. Ironically, it was the next five years that were the most difficult work years I ever lived through. I sometimes felt as if I were being made to pay for having survived those earlier events relatively unscathed.”
Graham would focus on growing the Post without a crisis. Pulling through the union strikes with savage level determination, Kay would finally earn the trust of Wall Street, and the company would soon build a cult following. That would place new pressures on her, as she had to forge her own path and her own plan.
She attended management course after management course, and once again, her world class Rolodex would open up any door of the most respected managerial organizations on the planet. While she would lean into her role as the first Fortune 500 CEO, she would have to start leaving the many university and charity boards she served on, as the token female.
Ironically, for a woman raised with a silver spoon, she was incredibly good at crisis management. Raised with a world class trust fund that she eventually exhausted, it was never supposed to be that way. But it was the way she chose.
She fell in love. And she put her soul into the company. While she would get frustrated that it was not often appreciated by the market, thanks to the incredible capital allocation decisions she and the board made with the help of Buffett, her run would end with a mighty 89x return to investors that gave her a shot in the IPO.
Source: The Outsiders
She would proclaim "we never took success for granted," and was pleased to prove “that journalistic excellence and profitability go hand in hand.” Towards the end of her run, this humble woman that constantly doubted her abilities would be awarded by Business Month, as one of the five best managed companies, along with Apple (run by Jobs), Merck, Rubbermaid and Wal-Mart (which was still being run by legendary Sam Walton).
More than the awards, she would prove that to manage through any crisis, and keep your ego from getting the better of you, a healthy dose of humility is not only recommended, but required. By being level-headed, and receiving critical feedback in a period when decisive actions are called for, humility is the only key behavior that ensures we end up on the right side of history. It doesn't win 49 of 50-state landslide elections, but it can certainly humble the man who is capable of such a trick.
As she was passing the managerial control of her beloved company, the love of her life, to the next generation, she would keep her indomitable spirit, “most important, though, is to keep working; I knew that I essentially never wanted not to work. To me, working is a form of sustenance, like food or water, and nearly as essential.”
For a top-right brain, which we knew she was operating from given she was overall acting from a place of love, work is not work. Top right brains are known for putting us in a state of "flow," when we immerse ourselves in work, we can think of nothing else.
Katharine Graham was not just the first female Fortune 500 CEO. She perhaps single-handedly saved the First Amendment for Americans. She saved the country from a corrupt Presidential administration that tried to use the CIA and FBI as his own personal weapons. She would dismantle thuggish organized labor, and in doing all of these, would generate staggering returns for those fortunate few that trusted her with their capital.
She never took anything for granted, especially her place in society. From that place, nearly the entire world orbited around her. But she worked for it. Every day. Every toast. Every lunch. Everything. She wore her heart on her sleeve, which made her one of the most emotionally engaging Builders to study.
One of my favorite stories from Ben Bradlee's memoir was that he was a member of an extremely sexist club that would never admit women. The one exception, as with many other things in the man's world, was Katharine Graham. As he wrote:
“Finally, on her sixty-fifth birthday, we took her to lunch and told her she had been elected, and we toasted her induction with champagne. But at the end of the meal, Williams broke the news to our new member—his prestigious client and my boss: Unfortunately, the club had an age limit, and all members had to resign when they reached sixty-five.”
She took the joke well, as she loved to laugh -- most of all at herself. And that vulnerability, her incredible stage presence, would position her at the center of the world's most powerful city. It wasn't the White House, but 2920 R Street where people would eagerly await an invitation for dinner. There was no dogma, no agenda. Just connection -- what top right brains do best. She was unapologetically herself, and in being such, set a role model for both women and men aspiring to build something of meaning. To win, against all odds.
At Kay’s funeral, Senator John Danforth would give the homily, underlining the secret to heroism. “In Washington, especially, a lot of people strut, and Kay did not strut…. We do not attain the victory of life by selfishness. Victory is for those who give themselves to causes beyond themselves. It is very biblical and very true that everyone who exalts themselves will be humbled and he who humbles himself will be exalted. That is a text for all of us. It was lived by Katharine Graham.”
