The Phil Graham Effect


By Dick Bausch


   When Newsweek was acquired by the Washington Post Company in 1961, the initial reaction among the advertising staffers was muted. The Washington Post was a local newspaper without—yet--national prominence.  We knew little about Phil Graham, the president. We did know that new ownership usually means change and change can put jobs in jeopardy.  It might be time to update our resumes.

   President Gibson McCabe immediately convened a staff meeting. We trusted him. He told us that the Washington Post was head and shoulders above all other potential buyers.  He said the Post was well run, well financed and forward looking, all of which could only benefit us.

   "Brilliant." McCabe was equally confident about Phil Graham, labeling him "brilliant" and "unorthodox." He said: "I have to tell you that under this new ownership, 'business as usual' will no longer be the case.  Look,” McCabe added, “I know what you're thinking and I don't blame you.  But do me a personal favor.  Put away your resumes and give it six months--you will not be disappointed."

   A few weeks later we held our annual advertising sales meeting at a conference center on the New Jersey shore.  Attending were the entire ad staff plus managers of administration,

circulation, manufacturing and finance, about 120 in all.

   On the second day, Phil Graham paid a surprise visit. His main pitch was that in acquiring new properties his company sought well managed and reasonably successful organizations with great potential and with news cultures that fit the Post's own.  "Newsweek" he said "has all of those attributes."

   No changes. Graham’s underlying message was that there was no need to make a lot of changes. We all nodded politely, but he did reassure us a little. His parting comment, though, almost blew it.   “Listen, guys,” he said, “if you’d like to have swimming pools in your backyards, or maybe a new boat at your dock - you'll stick with us"   You could almost hear 120 pairs of eyes roll toward the ceiling.

   After the morning session, McCabe gave Graham a private screening of a new promotional film. There were five from Newsweek, including McCabe, the promotion director, the associate who produced the film, me as meeting planner, and the guy who ran the camera. When the lights came up Graham was effusive with compliments.  Then he looked around and said:  “Gib, you have been with Newsweek a long time. All companies, no matter how successful, have problems--God knows the Post has its share.  Tell me, what’s Newsweek's single biggest problem today?"

   This is a conversation between top executives that would ordinarily be held in privacy - not in front of subordinates.  But we were to learn that Phil Graham didn't always follow protocol.

   McCabe didn't bat an eye.  He said: "Our greatest problem has been our inability to develop a clear, separate identity from our primary competition, Time magazine.  We are too often lumped together in the minds of readers and advertisers; they think we both ‘do the same thing.'”

   Graham said "we'll have to work on that."  Then he turned around, looked directly at me and asked: "Dick (we wore name badges), what's the biggest problem in your area?"   Going center stage without warning was unnerving. I don't remember exactly what I said but I know it keyed off McCabe's comments. Graham put the same question to everyone else in the room.

   Questions. In the following months, I realized this was not an aberration.  We were warned not to be surprised if our new owner stopped by our workstations, sat down and asked, “How are things going in your area?”  Graham did just that, quite often.

   I don’t think this was an end run around management.  It was his way of learning how a complex operation such as ours really worked. As time passed, he cut out these surprise visits.  While they were happening, it certainly kept us on our toes.


   Dick Bausch joined Newsweek as a senior advertising researcher in 1952.  He held a series of positions in ad sales and marketing and was Director of Advertising Sales Operations on retirement in 1988.