Obama and McCain agreed on only one thing during the debates – that the
The days of seven-course dinners are over America Inc. Buffeted by financial woes, none other than Warren Buffet might be called in to serve frugal buffet meals to corporate America.
best Secretary of the Treasury would be Warren Buffett. The world’s richest man started his ‘business’ life as a newspaper delivery boy, deducting his bicycle and watch as work expense in his first income tax return that declared the $35 dollars he made – when he was all of 13 years old. Turned down from Harvard Business School without an admission, Buffett would eventually graduate from the equally illustrious Columbia University, and teach ‘Investment Principles’ at University of Nebraska to students twice his age – when he was all of 21 years. In the same year, he would flop in his first formal business – a petrol bunk, but in the next year he would start working with the man who would change his life forever – Benjamin Graham, the father of ‘value investing’. Berkshire Hathaway, Buffet’s legendary insurance, investment, & holding company with assets of $273 billion and an employee base of 2,33,000, was originally a textile manufacturing firm that Buffett took over but couldn’t turn around. In 2006, as the world’s second richest man, Buffett donated $30.7 billion to Bill & Melinda Gates Foundation, thus making it the largest transparently operated private philanthropic foundation, and making himself history’s most generous philanthropist. Ironically, two years later – in 2008 – he would end Bill Gates’ 15-years of iron grip on the ‘world’s richest’ title. Known for his frugal, simple living – no cell phone, no personal computer, no driver, living only on his $100,000 annual salary, and in the same house since 1958 – Buffet described the fate that befell some of the mightiest US corporations recently as “poetic justice”. Still, there was no one else to help Goldman Sachs or General Electric, other than Buffett. Michael Lee Stallard of E Pluribus Partners, a leadership training organisation, writes about the unique leadership traits of the man who is destined to be the Secretary of Treasury or Economic Advisor to Obama.
Warren Buffett is in the news these days after publicly expressing his confidence in the future of American corporations and recently investing $8 billion to purchase interests in GE and Goldman Sachs. With the recent stock market turmoil, many look to the world’s wealthiest man for guidance, and rightly so. Buffett is widely recognised as an exceptional judge of corporate value. ‘The Oracle of Omaha,’ as he is known, is arguably the most successful investor in history. Corporate leaders regularly make the trek to Omaha, Nebraska, seeking his wisdom. With so much attention on Buffett’s investment acumen, it’s easy to overlook another talent: motivating people. It’s one of a host of
reasons his investments tend to outperform the market.
Buffett's home - from 1958 till now
The talented managers who run Buffett’s companies remain with him because he keeps them engaged in their jobs. In Buffett’s own words, “Charlie Munger and I mainly attend to capital allocation and the care and feeding of our key managers. Most of our managers are independently wealthy and it’s up to us to create a climate that encourages them to choose working with Berkshire over golfing or fishing.” A closer look at Buffett shows, at least in part, how he does it. He imparts an inspiring
Buffett models for his alma mater
“ “It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you’ll do things differently.” identity to members of the Berkshire Hathaway family. The vision he constantly communicates is that Berkshire companies are well managed and have great people. It’s not unusual to hear him tell employees to “just keep on doing what you’re doing” and “we’re never going to tell a .400 hitter to change his batting stance.” Who wouldn’t be flattered to be praised by Buffett? Buffett shows that he values people in several ways. He is trusting and forgiving. By
“We believe that according the name ‘investors’ to institutions that trade actively is like calling someone who repeatedly engages in one-night stands a romantic.”
Buffett with Bill & Melinda Gates
I never attempt to make money on the stock market. I buy on the assumption that they could close the market the next day and not reopen it for five years.
Buffett drives on his own
investing for long periods in the companies he owns, Buffett indicates that he trusts his managers. He delegates decision-making authority; in his own words, “to the point of abdication.” And when a manager makes an honest mistake, he keeps it in perspective. One manager who informed Buffett that his business had to write off $350 million was stunned when Buffett told him, “We all make mistakes… if you don’t make mistakes, you can’t make decisions…you can’t dwell on them.” Buffett models civility and respect for others. His secretary has said she hasn’t seen him
mad even once in the nine years she has worked for him. The one time I met Buffett at a meeting in New York City, he patiently waited around to speak with everyone who wanted to meet him. He was attentive and focused on them, never projecting the slightest hint of self-importance. He is confident, yet humble. Buffett knows he’s very good at what he does, and he projects an easy confidence rather than superiority or arrogance. He credits his managers for his success, remains plain spoken, works in a modest office, lives in a modest house, and proclaims thrift as a virtue (the vanity plate on his former car read “Thrifty”).
I want to give my kids just enough so that they would feel that they could do anything, but not so much that they would feel like doing nothing. There’s nothing material I want very much. And I’m going to give virtually all to charity when my wife and I die.
Berkshire Hathaway's HQ occupies just one floor here
“ Berkshire Hathaway AGM
Compare Warren Buffett to Donald Trump, for example. It’s hard to imagine Buffett prominently displaying his name all over everything he owns or relishing in telling someone “you’re fired.” Instead of everything being all about him, Buffett insists it’s all about others. He appears to be guided by ‘The Golden Rule’ rather than Machiavelli’s The Prince. Given the way Buffett treats people, it should come as no surprise that some private company owners report turning down more lucrative offers to join the Berkshire family. It is telling, that no manager who sold a company to Buffett has ever left for a competitor, and several continue to work well into their eighties. Put simply, “people want to work for him,” proclaimed another satisfied manager, Rich Santulli, head of NetJets. Buffett promotes communication by being approachable and candid. At the annual meeting he hosts in Omaha for Berkshire shareholders, Buffett and Munger sit on a platform, listening to shareholder opinions and answering questions for hours on end. In dealing with his managers he follows the data they provide him in periodic reports and makes himself available if they want to talk.
Buffett with current wifew
Buffett writes and speaks with candour, even pointing out mistakes he made and what he learned from them. Warren Buffett’s ways make the managers of Berkshire Hathaway feel proud to be affiliated with the company, feel valued as human beings and feel they can communicate openly and honestly with Buffett. These feelings (or emotions) make people want to give their best effort in their work and make them more energetic, optimistic, trusting and cooperative. Warren Buffett’s behaviour reflects common sense and yet, studies have shown that such behaviour is uncommon in practice among those with power in organisations. They are yet another reason why Buffett deserves to be called the Oracle of Omaha.