The Outsiders: Eight Unconventional CEOs and Their Radically Rational Blueprint for Success

by William N. Thorndike Jr.

Graham’s approach to deploying these earnings was influenced by Simmons, Buffett, and another director, Dan Burke of Capital Cities. All capital expenditure decisions were submitted to a rigorous approval process, which required attractive returns on invested capital. As Alan Spoon summarized it, “The system was totally federalized, with all excess cash sent to corporate. Managers had to make the case for all capital projects. The key question was, ‘Where’s the next dollar best applied?’ And the company was rigorous and skeptical in answering that question.”1 This discipline led Graham to a more cautious approach to physical plant investments than that of her peers. During the 1980s, other large newspaper companies spent hundreds of millions of dollars to install new printing and prepress facilities that allowed shorter lead times and color printing. Graham, alone among major newspaper CEOs, held back, eventually becoming the last major publisher to rely on old-fashioned letterpress printing, deferring the expensive investment in a new plant until costs had dropped and the benefits had been definitively proven out by peers.