Can Women Run Fortune 500 Companies?
For the first half of her life, Katharine Graham saw pretty much everything go right. Her father, Eugene Meyer, was a financial genius who made a fortune in the stock market. Her mother was a beautiful as well as brilliant socialite. As a child, Katharine had the best of everything: the best schools, the best teachers, big houses, and servants to wait on her. In 1933, her father bought the Washington Post, then a struggling but important newspaper, which he began to turn around. The only child to express any serious interest in it, Katharine inherited the paper when she was older and handed over the management to her equally impressive husband, Philip Graham.
Then life took a turn. Phil Graham’s behaviour became increasingly erratic. He drank heavily. He made reckless business decisions and bought things they couldn’t afford. He began having affairs. He publicly humiliated his wife in front of nearly everyone they knew. Rich people problems, right? It turns out that he had suffered a severe mental breakdown, and as Katharine attempted to nurse him back to health, he killed himself with a hunting rifle while she napped in the next room. In 1963, at forty-six years old, Katharine Graham, a mother of three with no work experience, found herself in charge of the Washington Post Company, a vast corporation with thousands of employees. She was unprepared, timid, and naive. Though tragic, these events were not exactly a cataclysmic failure. Graham was still rich, still white, still privileged. Still, it was not what she thought life had planned for her. That’s the point. Failure and adversity are relative and unique to each of us. Almost without exception, this is what life does: it takes our plans and dashes them to pieces. Sometimes once, sometimes lots of times.
It turned out that taking over the paper was the first in a series of trying and wrenching events that lasted for nearly two decades. Thomas Paine, remarking about George Washington, once wrote that there is a “natural firmness in some minds which cannot be unlocked by trifles, but which, when unlocked, discovers a cabinet of fortitude.” Graham seems to have possessed a similar cabinet. As she settled into her leadership position, Graham found that the paper’s conservative board was a constant obstacle. They were patronising and risk averse and had held the company back. To succeed, she would have to develop her own compass and not defer to others the way she always had. It eventually became clear that she needed a new executive editor. Against the board’s advice, she replaced the well-liked good old boy with an unknown young upstart. Simple enough
The next turn of the screw wasn’t. Just as the company was filing to go public, the Post received a collection of stolen government documents that the editors asked Graham if they could run, despite a court order preventing their publication. She consulted the company’s lawyers. She consulted the board. All advised against it-fearing it could sink the IPO or tie the company up in lawsuits for years. Torn, she decided to proceed and publish them, a decision with essentially no precedent. Shortly thereafter, the paper’s investigation of a burglary at the Democratic National Committee’s headquarters relying on an anonymous source- threatened to put the company permanently at odds with the White House and Washington’s powerful elite (as well as jeopardising the government licenses they needed for the TV stations the Post owned). At one point, Nixon loyalist and the attorney general of the United States John Mitchell threatened that Graham had so overreached that her ‘tit’ was going to be “caught in a big fat wringer”. Another aid bragged that the White House was now thinking about how to screw the paper over. Put yourself in her shoes: the most powerful office in the world explicitly strategizing, “How can we hurt the Post the most
On top of that, the Post’s stock price was less than stellar. The market was poor. In 1974, an investor began aggressively buying up shares in the company. The board was terrified. It could mean a hostile takeover. Graham was dispatched to deal with him. The following year, the paper’s printers’ union began a vicious, protracted strike. At one point, union members wore shirts that said, “Phil Shot the Wrong Graham.” Despite-or perhaps because of these tactics, she decided to fight the strike. They fought back. At four o’clock one morning came a frantic call: the union had sabotaged company machinery, beaten up an innocent staffer, and then set one of the printing presses on fire. Then, a suite of major investors began to sell their stock positions in the Washington Post Company, ostensibly having lost their faith in its prospects. Graham, pushed by the investor she had met earlier decided her best option was to spend an enormous amount of the company money to buy back its own shares on the public markets a dangerous move that almost no one was doing at the time
That’s a list of problems exhausting to read about let alone live through. Yet because of Graham’s perseverance it shook out better than anyone could have possibly predicted The leaked documents Katharine Graham published became known as the Pentagon Papers and were one of the most important stories in the history of journalism. The paper’s Watergate reporting, which so incensed the Nixon White House, changed American history and took down an entire administration. It also won the paper a Pulitzer Prize. The investor others had feared turned out to be a young Warren Buffett, who became her business mentor and an enormous advocate and steward of the company. (His small investments in her family’s company would one day be worth hundreds of millions.) She prevailed in negotiations with the union and the strike eventually ended. Her main competitor in Washington, the one that had refused to come to her aid, the Star, suddenly folded and was acquired by the Post. Her stock buybacks-made contrary not only to business wisdom, but the judgment of the market-made the company billions of dollars It turns out that the long hard slog she endured, the mistakes she made, the repeated failures, crises, and attacks were all leading somewhere. If you’d invested $1 in the Posts IPO in 1971 in would be worth $89 by the time Graham stepped down in 1993, compared to $14 for her industry and $5 for the S&P 500. It makes her not just one of the most successful female CEOs of her generation and the first to run a Fortune 500 company, but one of the best CEOs ever, period.
Graham didn’t cause her husband’s suicide, but it was left to her to carry on without him. She didn’t ask for Watergate and the Pentagon Papers, but it fell on her to navigate their incendiary nature. While others went on buying and merger sprees in the eighties, she didn’t. She doubled down on herself and her own company, despite the fact that it was treated as a weakling by Wall Street. She could have taken the easy way a hundred times, but she didn’t – so to answer the question ‘Can Women Run Fortune 500 Companies’ they certainly can ……….
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