As Knox College grad and Life Trustee Patrick Graham ’62 inched up to the Massachusetts Statehouse, stuck in some unexpected traffic on a warm Boston day, then-governor Mitt Romney caught Graham out of the corner of his eye.
“Fox!” Romney barked toward Beacon Street.
That’s what he calls Graham.
As Graham recalls it, Romney leapt off his perch atop the capitol building’s red-carpeted stairs. He bounded toward the street, despite the protests of his security personnel, just to chat with an old friend.
But Graham, who spent most of his life in Galesburg before graduating from Knox, was much more than an old friend. As co-founder and former director of Bain & Company, he mentored Romney, recruited him into the consulting firm Graham started with Bill Bain, tapped him to run Bain Capital and eventually led him toward political life.
“Meeting George and Lenore Romney — that was amazing,” Graham told The Knox Student in a recent phone interview.
But this 1977 meeting was no mere formality. Four years earlier, Graham and Bain packed up their desks at the Boston Consulting Group, a successful and established firm, bringing several partners and clients with them to create Bain & Company. Graham was tasked with bringing Mitt, a Harvard graduate and rising star at BCG, over to Bain.
“Mitt said, ‘I think I might like to join you guys, but my dad and my mom consider my career a part of the family’s personal business,’” Graham recalled Romney telling him in an initial meeting. “‘I can’t leave until they agree. They can’t understand why I would leave a safe company for a risky one.’”
So Graham flew to Florida with Romney to meet the parents. This was perfectly reasonable, as he averaged 360 flights per year for 26 years – the consultants always flew to their clients. The Romneys bored into Graham for well over an hour, and they were making little progress.
George Romney needed a difference. Graham said Romney had probably never used a consultant before and did not understand the business. He needed some justification
Finally, Graham named two differences. The first: at BCG, all those flights were taken in first class, because it was on the client’s dime. At Bain, everyone from a low-level analyst up to Bill Bain himself flew coach, and for the very same reason. This was the breakthrough.
“George said, ‘It’s a values difference. It’s an ethical difference.’ ‘Absolutely,’ I said.
“He turned to his son and said, ‘Mitt, I think you should go to Bain.’”
Before his business career, Graham, an economics major, was involved as a Knox student. He was chair of the Honor Board, senior class vice president and a member of the golf team, to name a few.
After Knox, he flew headfirst into the business world. He spent a summer at Ford Motor Company, attended Stanford Business School, worked at IBM to program some of the world’s first computers and spent two years as an officer in the Army before joining the Boston Consulting Group.
Despite all that, his work at Knox did not end after he walked across the stage to accept his diploma. He served on the Board of Trustees from 1988 to 2003, after which he was named a life trustee. And last weekend during homecoming, President Teresa Amott presented him with an award for lifetime service to the college.
Graham said he learned one big lesson at Knox: “Be suspicious about anything that everyone else believes,” a concept anything but foreign to Knox students seeking a liberal arts education.
“I invented the thought of talking about a major corporation — even some in the top 100 — and if they have a big consensus about the problem and the solution, it’s completely wrong and the opposite is always true,” Graham said.
This philosophy, by his estimation, ultimately made Bain & Company, and later Bain Capital, wildly successful. These are among the ideas that he imparted to a younger Mitt Romney.
“Succinct, insightful business analysis is what you need,” Graham said. “We were the only ones with analytic skills and data gathering skills. Mitt learned in that environment, and he was good at it.”
Graham had only given George Romney the first difference between Bain and BCG before George gave his blessing. The second: “Once we work for [a client], we will never work for their competitors.” But George did not know that his son would end up shaping that vision of a more ethical business model.
A policy like this was previously unheard of in the consulting industry, Graham said. He described the business model pre-Bain as essentially a large-scale scam. Firms like BCG, he said, were champions of conducting studies, writing reports and making recommendations, practices Graham called “worthless” and “self-serving.”
“They would use clients’ money to come up with some ‘insights’ and then turn around and sell it to everyone else in the industry,” Graham said. “Bill and I thought that was incredibly unethical, frankly. And we were ashamed to be a part of it.”
So Bain and Graham, armed with their ethical basis and technical ability, set out to remake the consulting industry. They never wrote a report or a proposal, and they negotiated directly with chief executives. “Our product was a result of profit,” Graham said.
Despite their success, Graham and Bain were still disappointed with their haul. Sure, their clients benefited greatly from the consulting, but Bain & Company was only getting around 2 percent of the profit. They reinvented their own new model.
“We didn’t want to be greedy, but there was something wrong with the picture. I said, ‘We should just consult to ourselves,’” Graham said. “That was the idea behind Bain Capital” — buy small businesses, manage them like the “value-creation machine” developed at Bain & Company and get all the returns.
But there was one problem with launching the investment-based sister company: they needed someone to lead it. And Bain & Company had gathered a bright bunch of employees, including Meg Whitman, who later became CEO of eBay. But those more promising folks were moving on to bigger and better things, Graham said. They worried that Romney would get bored and leave with them.
So Romney became the solution to both their problems. With him heading Bain Capital, he was thrown into an environment in which, Graham believed, he would thrive. Romney needed “a challenge and an outlet,” and Graham thought he would be a good choice, despite his lack of financial experience.
But as Graham expected, Mitt was a quick learner in the position. He took a risky endeavor, one which Graham even called “scary,” and made it happen. For Graham, any talk of the GOP candidate’s income is moot.
“We always hear about how much money he makes,” Graham said, “but he deserves it.”
Graham seemed to take an early interest in politics. He had no personal ambitions to run for office, but he recognized that ambition in the man he came to call his best friend.
Graham’s first memory was his quest to see President Harry Truman. It was in 1948, when he was still in elementary school. Truman was expected to make a campaign appearance at the Galesburg train depot. But there was one thing stopping him.
“I really wanted to see the president, but I had to go to school that day,” Graham recalled.
Like many Knox students today, Graham lived on West Street, mere feet from the Knox College campus. In fact, he said, the 1957 Seymour Library addition was built on the spot where he buried his dog as a child.
The day the president came to town, the house dog of Tau Kappa Epsilon was chained up outside. Graham wanted to play with the dog, but it nearly “bit (his) arm off.” And just like that, he did not have to go to school that day.
Over three decades later, he realized Romney had presidential ambitions as well. The night after the assassination attempt on then-President Ronald Reagan, they shared a D.C. hotel room, talking until 4 or 5 a.m. about Romney’s goals in life.
That night, he learned that Romney only wanted to fulfill his father’s dream: to get a good job, make a lot of money, give half of it to the Mormon church and do public service. He wanted to finish what his father started in 1968.
At that time, Graham had denied some requests from the Massachusetts Republican Party to run for office. He did not see himself as a politician.
“Look, guys. I’m so embarrassed. Every two years I keep saying, ‘No, no, no,’” Graham was quoted in an Oct. 17 piece in the Washington Post. He was speaking to GOP leaders at a meeting of Boston’s Union League Club. “But I’m bringing you a possible candidate.”
Graham did not always see Romney as a candidate for “leader of the free world.” In fact, he voted for Barack Obama in 2008, and he said he still would have voted for Obama even if Romney got the GOP nod that year. Romney “wasn’t ready yet.”
But after what he calls Obama’s failures in economic policy and Romney’s qualification for the job, Patrick Graham’s old friend has his vote this year. Graham is confident in Romney’s ability to run the country, as he did Bain Capital.
“[Romney] didn’t know anything about finance, but we picked him for two reasons,” Graham said. “He’s a natural leader and a big thinker. He wanted to make a mark on the world.”