Don Graham: A Model of Empathetic Leadership
The post below is a guest essay by my friend Jacob Benedict. Don Graham is someone that I think most people should know more about—so I was excited when Jacob shared his essay with me, and also permit me to post it here for all of you to read and enjoy. A formatted, PDF version of the essay can also be found HERE.
Don Graham: A Model of Empathetic Leadership
By Jacob D. Benedict, CFA
October 13th, 2020
“Principles are only principles if you’d hold them even when they are costly.” – Reid Hoffman[1]
“The universities do not teach all things. A doctor must seek out old wives, gypsies, sorcerers, wandering tribes, old robbers, and such outlaws and take lessons from them. A doctor must be a traveller because he must enquire of the world. Experiment is not sufficient. Experience must verify what can be accepted or not accepted.” – Paracelsus
Introduction
In late July, Don Graham, former publisher of The Washington Post, asked the following question on social media: “With the death of John Lewis, who is the greatest living person in the United States, as history books will see it?” Responses included former presidents, business icons and even a couple of baseball pitchers. Understandably, no one answered “Don Graham.” Yet while history books won’t remember Don Graham as the greatest living person of his era, he nonetheless provides a worthwhile example that is relevant for today’s aspiring leaders.
Don Graham grew up in a life of privilege. His maternal grandfather, financier Eugene Meyer, earned a fortune on Wall Street, built Allied Chemical Corporation (a predecessor to Honeywell), and later served as Chairman of the Federal Reserve. Meyer subsequently purchased The Washington Post, which would eventually be run by Meyer’s daughter – and Don’s mother – Katherine (Kay) Graham.
Don was groomed from a young age to take over the paper. He travelled the globe, went to the best schools, and studied at Harvard, where he was elected president of The Harvard Crimson. At the young age of 33 he was named publisher of the Post. Some may dismiss Don’s career as an example of nepotism. But a deeper look highlights a man who made choices bravely at odds with this narrative.
Don Goes to War
Don graduated magna cum laude from Harvard in 1966 in the midst of the Vietnam War. As a person of privilege he could have easily avoided the draft. In fact, ninety-five percent of Don’s graduating class went directly to graduate school, thereby receiving a deferment.[2] Presidents Clinton and Trump, as well as Vice President Biden, received educational and/or medical deferments. But Don decided to let himself be drafted, joining the 1st Cavalry Division. He later explained: “I did not think that all American troops should be withdrawn from Vietnam in June of ’66 and I knew that I ought to live my life the way I believed and not seek special privileges.”[3] Despite efforts by Graham’s officers to keep him safe given his name-recognition, he was shot down in a helicopter during his tour of duty.
Graham’s military experience led him to do something else that is uncommon – change his mind. When he returned Graham observed (in 1979): “Anyone going into a war wants to believe his country is right, but you can’t help but react to what’s going on around you and find it stupid and senseless and wrong. I was confused about the war when I went over and confused in a different way when I came back. I still am.”[4]
Don On the Beat
As Graham’s war-time service came to an end, his family again assumed it was time to join the Post. But again, Don Graham surprised people.
Graham’s first step in preparing to take over the Post was definitely thought odd even in his mother’s circle – it was simply not the sort of act of noblesse oblige they were used to. Typically, it was also totally out of sync with the rest of his generation. Many of his contemporaries called cops pigs. His younger brother Bill was turning into a student radical at Stanford. But Don Graham became a cop. “I thought he’d been walking around with a gun long enough,” said his mother. Graham, however, wanted to understand the community he had decided to serve. “I’d been away six years,” he says. “I knew absolutely nothing about the city, and I thought it would be useful to see it from someone else’s point of view.”[5]
Years later Don told David Rubenstein in an interview:
The year was 1968 and I was discharged from the Army in July. And the folks my age will remember that in DC there was a major riot in April after Martin Luther King’s assassination…My Mother who had become publisher five years ago had asked me to come work for the Post and I had made up my mind to do that, but I thought I would be better on the newspaper if I first learned something about the city from somebody else’s point of view…[My Mother] was not crazy about it.[6]
Graham was assigned to the 9th Precinct, a tough, predominantly African-American neighborhood. Initially disliked by his peers due to his upbringing, Graham earned the respect of his fellow officers. He later said that had he not been destined to work at the Post, he might have finished his career as a police officer.
Don Sells the Paper
Finally, Graham joined the Post, going on to lead a distinguished editorial and managerial career. Yet the businesses he inherited turned out to be less indestructible than once thought. The newspaper industry was ravaged by the internet and the company’s for-profit college was imperiled by government regulations brought on by the unscrupulous behavior of some of the company’s competitors. However, Graham’s customer-first managerial philosophy and focus on building a first-class culture let his company realize value where others could not. It was his empathy – displayed by his decisions to serve in Vietnam and become a police officer – that helped the Post survive while industry peers fell by the wayside.
In 2013 Amazon founder Jeff Bezos purchased The Washington Post for $250 million, citing the paper as “an important institution…[that] has an incredibly important role to play in this democracy.”[7] In 2017, Graham struck a deal with former Indiana Governor Mitch Daniels to sell the for-profit online college Kaplan to Purdue University, which would be rebranded “Purdue Global.”[8] Daniels cited Kaplan’s high quality and willingness to be held accountable as reasons for the deal.[9]
Upon the sale of the Post, one reporter stated, “We love the Graham family, we are proud of the family,” while another observed, “While you might have disagreed [with some of his decisions]…you couldn’t doubt his heart.”[10] These kinds of sentiments towards large employers are not common. Indeed, even selling the paper could be seen as an act of courage, parting with the long-held family institution that he loved and adored in order to secure a more stable future for the company and its employees.
Don Funds DREAMers
The same year that Amazon purchased the Post, Don co-founded TheDream.US, “the nation’s largest college access program for DREAMers.” TheDream.US is helping thousands of highly motivated DREAMers – immigrants raised in this country from a young age – graduate from college with career-ready degrees. The organization has committed to $141 million in scholarships to date and helped enroll 3,300 DREAMers in the Fall 2018 cohort. The average recipient arrived in the US at age three and has a GPA of 3.5. Eighty-six percent of recipients are first generation college students and one-hundred percent come from low-income families. Don relayed how he first became interested in the issue, again via a first-hand experience:
I got to know a little more about undocumented kids starting to school and found how impossibly frustrating their situation is. I met a particular young woman who was the salutatorian of a good Washington public high school. She could not get a Pell Grant, could not borrow a cent, could get any Federal or State aid of any kind because she was undocumented. I can't remember when she came to this country, but the average student came here when they were six years old. It is easy to get mad at someone for quote, "Breaking the law." But it's pretty hard to get mad at a six-year old. They grow up, usually the children do not know their family is undocumented. So it's not known to the children until perhaps they turn 16 and the oldest one wants to get a driver's license and finds they cannot. And then, as high school seniors, the college counselor comes to talk to the class, and says, great news, you’re all eligible for college so you all get a Pell Grant and you get state aid and you may get institutional aid. And the young man or woman goes up to talk to them about this aid [and finds they can’t get it because of their immigration status].[11]
[Prior to starting TheDream.US, Don was the founder of D.C. CAP, an organization dedicated to helping D.C. public high school students enroll in and graduate from college.]
Don the Fox
Warren Buffett has referred to Don Graham as one of the smartest people he’s met.[12] This might come as a surprise if you read any interviews with Don, which are littered with phrases such as “I don’t know” or “I don’t understand.” That may be why Don Graham isn’t asked for his opinion on television every other week. But that’s exactly the point.
When the Oracle of Delphi told Socrates that he was the wisest man in Athens, Socrates responded with incredulity. How could he be the wisest man when he repeatedly professed how little he knew? But after seeking out the supposed wise men of the time, Socrates was eventually forced to concede the Oracle’s point – although he knew little, he was at least willing to admit it. Or as the great Mark Twain once supposedly said, “It ain’t what you don’t know that gets you into trouble. It’s what you know for sure that just ain’t so.”
I would love for Don Graham to write a memoir, but it may not be a best seller.[13] As opposed to Jack: Straight from the Gut (Jack Welch) or Losing My Virginity: How I Survived, Had Fun, and Made a Fortune Doing Business My Way (Richard Branson), Graham’s memoir would surely adopt an unassuming, humble title. Indeed, his mother’s memoir – probably the best autobiography I’ve had the opportunity to read – is humbly titled Personal History and stands as a stark and refreshing contrast to the typical ego-centric executive biography. Kay Graham was thrust into a position of leadership after much personal upheaval and stress following her husband’s suicide. She lacked self-confidence and was full of doubts, but acted with both courage and a recognition of her blind spots.[14] Her decision to publish the Pentagon Papers in the face of immense corporate and personal risk echoed Don’s own courageous personal decisions.[15]
In his comprehensive studies of expert judgment, psychologist Phil Tetlock has documented the superiority of foxes over hedgehogs, drawing on Isaiah Berlin’s observation that “The fox knows many things but the hedgehog knows one big thing.” Tetlock writes:
The intellectually aggressive hedgehogs [know] one big thing and [seek], under the banner of parsimony, to expand the explanatory power of that big thing to “cover” new cases; the more eclectic foxes [know] many little things and [are] content to improvise ad hoc solutions to keep pace with a rapidly changing world…[16]
[But] Foxes don’t fare so well in the media. They’re less confident, less likely to say something is “certain” or “impossible,” and are likelier to settle on shades of “maybe.” And their stories are complex, full of “howevers” and “on the other hands,” because they look at problems one way, then another, and another. This aggregation of many perspectives is bad TV. But it’s good forecasting. Indeed, it’s essential.[17]
Don Graham is the rare fox, whose honest uncertainty and intellectual humility doesn’t seem to gel in a world dominated by headlines and Twitter posts.
Empathetic Leadership
My friend and mentor Peter Kaufman often recalls an old Japanese proverb – “A frog in the well knows nothing of the great ocean.”[18] The true geniuses that I’ve studied are the individuals who can replicate others’ experiences vicariously, learning the lessons second-hand and in-turn applying them to their own life and work. Warren Buffett’s long-time business partner Charlie Munger advises: “[I]f you go through life making friends with the eminent dead who had the right ideas, I think it will work better in life and work better in education.”
But for many of us, it is simply too difficult to challenge your own closely-held beliefs via text. As the investment writer Morgan Housel framed it:
Your personal experiences…make up maybe 0.00000001% of what’s happened in the world, but maybe 80% of how you think the world works…
The challenge for us is that no amount of studying or open-mindedness can genuinely recreate the power of fear and uncertainty…
Studying history makes you feel like you understand something. But until you’ve lived through it and personally felt its consequences, you may not understand it enough to change your behavior.
We all think we know how the world works. But we’ve all only experienced a tiny sliver of it.
As investor Michael Batnick says, “some lessons have to be experienced before they can be understood.” We are all victims, in different ways, to that truth.[19]
Individuals merely trying to obtain standard intelligence and intellectual freedom often must go through the painstaking and less efficient ritual of experiencing things first-hand. And if that is the case, it becomes important to do all you can to experience as wide of an array of first-person situations as possible.[20]
I sometimes have the opportunity to mentor students preparing to embark on their professional careers. If I were restricted to offering them just one piece of advice, it would be this: Pick the right heroes. Don Graham is the right kind of hero. His decisions serve as a worthwhile story of courageous and empathetic leadership and a good model for the kind of leaders we need today. For investors, his and his mother’s leadership of the Post highlights ESG[21] principles that go well beyond simple checklists.[22]
Many of us feel unsettled by the things we see in the world but perhaps frustratingly uncertain about what we can do to help. Don Graham’s example provides a blueprint worth considering: Be humble and try to get out of your own shoes. Or as my friend Peter puts it, citing a clinical axiom of psychology: “If you could see the world through my eyes, you’d understand why I do the things I do.”
DISCLAIMER: I and my clients own shares of Graham Holdings Corporation, where Don Graham serves as the Chairman and the Graham family exercises voting control. This essay should not be interpreted in any way as a recommendation to buy or sell shares of Graham Holdings Corporation.
Notes:
[1] As paraphrased by Ben Thompson.
[2] Interview with David Rubenstein, The Economic Club of Washington D.C., March 2, 2010.
[3] “The Prince and the Paper,” by Maureen Orth, New York Magazine, August 27th, 1979.
[4] “The Prince and the Paper,” by Maureen Orth, New York Magazine, August 27th, 1979.
[5] “The Prince and the Paper,” by Maureen Orth, New York Magazine, August 27th, 1979.
[6] Interview with David Rubenstein, The Economic Club of Washington D.C., March 2, 2010.
[7] “Why Jeff Bezos Bought The Washington Post,” by Stephanie Denning, Forbes, September 19, 2018.
[8] While the purchase price was nominal, the transaction included a long-term services agreement with the former owner.
[9] “Purdue’s Mitch Daniels On Kaplan Acquisition,” by Kirk Carapezza, On Campus Radio, WGBH News, March 23, 2018.
[10] “Donald Graham’s Choice,” by David Remnick, The New Yorker, August 5, 2013.
[11] “Why Donald Graham Sold Kaplan University to Purdue for $1,” by Jeffrey R. Young, EdSurge, May 16, 2017.
[12] “The Snowball: Warren Buffett and the Business of Life,” by Alice Schroeder, Random House, 2008.
[13] I would humbly suggest that he follow President George W. Bush’s format in Decision Points, which I thought was a refreshing approach to writing a memoir. I would love to hear Don Graham walk through his thought process behind key decisions such as serving in Vietnam, joining the police force, selling the paper or establishing D.C. CAP and TheDream.US.
[14] As Voltaire once wrote, “Doubt is not a pleasant condition, but certainty is absurd.”
[15] The story of Kay Graham’s decision was portrayed in the movie The Post, starring Meryl Streep and Tom Hanks.
[16] Expert Political Judgment: How Good Is It? How Can We Know? by Philip E. Tetlock, Princeton University Press, 2005.
[17] Superforecasting, by Philip E. Tetlock and Dan Gardner, Random House, 2015.
[18] Displaying his own belief in the principles espoused in this essay, Peter has become a champion and supporter of Project Horseshoe Farm – an organization that places aspiring medical students in rural healthcare settings during a “gap year.” Peter and the founder John Dorsey reason that only by experiencing rural health struggles first-hand will the future doctors have the requisite understanding and compassion to develop workable solutions. See https://www.projecthsf.org/ for more information.
[19] The Psychology of Money, Harriman House, 2020.
[20] After my sophomore year of college, I had the chance to spend the summer working at a day camp for disadvantaged students from downtown Indianapolis. That experience had a much larger impact on my worldview than anything I could have ever read in a book.
[21] Environmental, social and governance principles are becoming an increasing focus for many investors.
[22] For instance: building a long-term, customer-first philosophy; focusing on win-win relationships with all of your counterparties, including your employees; maintaining a fortress balance sheet; diversifying the business in order to remain an institution that can benefit all stakeholders and take advantage of new opportunities; structuring aligned long-term compensation for managers (the plan for the current CEO is built around long-term options with a strike price that appreciates 5% each year); etc.