Warren Buffett, CEO of the legendary holding company Berkshire Hathawayhas long maintained that the best types of leaders are those who are committed to mentoring their future successors, and who have a strong sense of direction.
“You must have a clear vision of where you are going so that others can follow you,” Buffett say of luck Susie Gharib At Berkshire Hathaway’s Annual Meeting of Shareholders in 2015. Berkshire Hathaway has “a ton” of next-generation leaders, he told Gharib. “It’s not missing.”
To keep those leaders engaged and committed to the company’s mission, Buffett said he and the late Charlie Munger, then vice chairman, “create a strong culture through what I write and what I say, the same with Charlie.” ”
“Ultimately, we want people to buy into the Berkshire culture,” Buffett said.
Whether people can be trained to be great leaders versus being born with the right qualities under the right guidance, Buffett split the difference.
“I think it’s a combination of both,” he told Gharib. “Some people have more leadership qualities naturally, but I think you can learn a lot, too.”
Only good people
Buffett and Munger have extolled the virtues of good management—and good hiring—for decades.
in one 2014 luck the conversationPattie Sellers, who was editor-in-chief at the time, wrote that Berkshire Hathaway generally refuses to buy companies led by bad managers. That is unusual. “A lot of people like to buy good companies with bad managers and then replace them,” he said.
That didn’t work for Munger and Buffett. “We tried that, with predictable results,” Buffett told Sellers, adding that “life is a lot more fun” when you work with people who are good by nature, rather than wasting energy trying to make bad managers good. “I mean, who wants to spend their life trying to change people from their natural views?”
“Marrying someone to change them is crazy,” Buffett continued. “And I’d say hiring someone to change him is crazy, and partnering with them to change is crazy.”
Munger echoed the sentiment. “The reason Berkshire has been successful as a large conglomerate — more successful than any other large conglomerate, as far as I know — is that we try to buy things that won’t require a lot of executive talent at headquarters,” he said. a 2017 event at the University of Michigan. “Everybody else thinks they have a lot of management talent at headquarters, and that’s a lot of arrogance.”
in 1998Buffett told MBA students at the University of Florida that he looks for three things when hiring people: integrity, intelligence and energy. All three are essential, he added. “If they don’t have integrity, you want them dumb and lazy.”
Some things don’t change with time. in one 2021 shareholders’ meetingBuffett said that bad management is the biggest threat a company can face. “You get a guy or a woman who’s in charge of it—they’re personable, managers like them—they don’t know what they’re doing. But they know how to put on an appearance. That’s the biggest risk.”
