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10 Leadership Lessons That Warren Buffett Taught Us

10 Leadership Lessons That Warren Buffett Taught Us

Who could not be inspired by Warren Buffett, who has promised 99% of his wealth to charity? That wealth is worth about $40 bn. He started selling newspapers at the age of 11 and he is now 84 with no intention of retiring.

“I would say that life at 84, I am having as much fun as I’ve ever had in my life. I mean I get to do what I love every day with the people I love—and it just doesn’t get any better than that.” – Warren Buffett.

He has written extensively about his business success and is in great demand as a speaker on leadership. Here are 10 lessons that he has taught us.

1. Love what you do.

“There comes the time when you ought to start doing what you want. Take a job that you love. You will jump out of bed in the morning. I think you are out of your mind if you keep taking jobs that you don’t like because you think it will look good on your resume. Isn’t that a little like saving up sex for your old age?” – Warren Buffett

Listen to any interview with Warren Buffett and you will hear how passionate he is about his job. He is convinced that this will give anyone in business a competitive edge. If you are thinking of taking a new job which you are not enthusiastic about, it might be worth thinking again.

2. Learn how to communicate effectively.

“You’ve got to be able to communicate in life and it’s enormously important. Schools, to some extent, under emphasize that. If you can’t communicate and talk to other people and get across your ideas, you’re giving up your potential.” – Warren Buffett

Read any letter to shareholders in Warren’s company, Berkshire Hathaway Inc. You will be immediately struck by the non technical language, the clarity of thought and how he gets his message across, with the minimum of jargon. His success is also due to his intimate knowledge of the business.

Warren Buffett was terrified of public speaking and had to enroll in a course to overcome his fear. Aim for easy and clear communication in your own business whether it is a memo to your staff or speaking in public.

3. Choose your business associates wisely.

“It’s better to hang out with people better than you. Pick out associates whose behavior is better than yours and you’ll drift in that direction.” – Warren Buffett

He was able to spot successful and talented people and used a few basic networking skills to keep up contact and be inspired by their success. If you hang out with mediocre associates, they will never inspire you to do better and aim higher.

Read about Guy Spier who was prepared to pay $650,000 for a lunch with Warren Buffet because he wanted to be inspired by an extraordinary entrepreneur. The money went to charity, of course. Yes, there is no such thing as a free lunch!

4. Don’t micro manage.

“Hire well, manage little.” – Warren Buffet

He strongly believes that great leaders need to spot and hire great talent. He also lets them get on with it and rarely interferes so that they feel empowered by this independence. The lessons for future leaders are clear. Have fewer meetings and call your CEOs and managers less often.

5. Plan for the future.

“The primary job of a board of directors is to see that the right people are running the business and to be sure that the next generation of leaders is identified and ready to take over tomorrow.” – Warren Buffet

Buffett already knows that his job will be divided into three, once he decides to step down. The board has already chosen a CEO candidate and a non-executive chairman plus an investment manager.

Future leaders need to think ahead about their successors and how they will be groomed for success. It is no surprise to learn that the most successful companies have predictive models in place for their promising talent for the next five years at least. They also place heavy emphasis on education and skills development for their staff.

6. Transparency is highly appreciated.

“If anything, taxes for the lower and middle class and maybe even the upper middle class should even probably be cut further. But I think that people at the high end—people like myself—should be paying a lot more in taxes. We have it better than we’ve ever had it.” – Warren Buffett

Bill Gates admires Buffett for many reasons. Even on such a sensitive issue as taxation, Gates admires him because his transparency is invaluable even though it might not be in his own best interests.

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Transparency at every level pays off handsomely in every business field. Employees are tired of surprises and there is a growing demand for delivering the truth.

7. Patience is a virtue.

“No matter how great the talents or efforts, some things just take time. You can’t produce a baby in one month by getting nine women pregnant.” – Warren Buffett

There is no doubt that Buffett has demonstrated patience throughout his career. This great quality goes hand in hand with a certain bravery and perseverance. Great leaders need to resist pressure and have the tenacity to see the project through to the end.

8. Manage your time wisely.

“You’ve gotta keep control of your time and you can’t unless you say no. You can’t let people set your agenda in life.” – Warren Buffett

When Guy Spier had lunch with Buffett, he was shown his diary. It was remarkably empty. The billionaire explained that he preferred to have time for serendipity. It also gives him the freedom to spend the time in ways that he sees as priorities. It also means that he has learned how to say ‘no’ when necessary. The lack of appointments for meetings was noticeable!

Learning to organize their office space, their emails and how much time they spend online are usually great ways leaders can manage their time more effectively.

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9. Be prepared to take risks and learn from mistakes.

“Risk comes from not knowing what you are doing.” – Warren Buffett

Buffett has followed basic principles when looking at the risk factor. He prefers to avoid any investment opportunities that carry a catastrophe risk. He always tried to invest in high probability and low risk scenarios.

He has learned too from his mistakes. He made costly errors with U.S. Airways, ConocoPhillips (COP) and Energy Future Holdings. Like any successful leader, he has analyzed his mistakes and used this to make better decisions in the future. Unsuccessful leaders avoid failure at all costs.

“I make plenty of mistakes and I’ll make plenty more mistakes, too. That’s part of the game. You’ve just got to make sure that the right things overcome the wrong ones.” – Warren Buffett

10. Treat everyone equally.

“Personally, I really hope I can treat everyone equally. I think I have done a pretty good job so far but I know I can do it better.” – Warren Buffett

Nobody is left behind. Treating everybody equally and avoiding favoritism is the true mark of a leader. Buffett’s golden rule is about reaching out to the silent, competent workers.

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Let us know in the comments which quote/s have inspired you most.

Featured photo credit: Fortune The Most Powerful Women 2013/Fortune Live Media via flickr.com

More by this author

Robert Locke

Author of Ziger the Tiger Stories, a health enthusiast specializing in relationships, life improvement and mental health.

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Last Updated on June 18, 2019

The Importance of Reminders (And How to Make a Reminder That Works)

The Importance of Reminders (And How to Make a Reminder That Works)

No matter how well you set up your todo list and calendar, you aren’t going to get things done unless you have a reliable way of reminding yourself to actually do them.

Anyone who’s spent an hour writing up the perfect grocery list only to realize at the store that they forgot to bring the list understands the importance of reminders.

Reminders of some sort or another are what turn a collection of paper goods or web services into what David Allen calls a “trusted system.”[1]

A lot of people resist getting better organized. No matter what kind of chaotic mess, their lives are on a day-to-day basis because they know themselves well enough to know that there’s after all that work they’ll probably forget to take their lists with them when it matters most.

Fortunately, there are ways to make sure we remember to check our lists — and to remember to do the things we need to do, whether they’re on a list or not.

In most cases, we need a lot of pushing at first, for example by making a reminder, but eventually we build up enough momentum that doing what needs doing becomes a habit — not an exception.

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From Making Reminders to Building Habits

A habit is any act we engage in automatically without thinking about it.

For example, when you brush your teeth, you don’t have to think about every single step from start to finish; once you stagger up to the sink, habit takes over (and, really, habit got you to the sink in the first place) and you find yourself putting toothpaste on your toothbrush, putting the toothbrush in your mouth (and never your ear!), spitting, rinsing, and so on without any conscious effort at all.

This is a good thing because if you’re anything like me, you’re not even capable of conscious thought when you’re brushing your teeth.

The good news is you already have a whole set of productivity habits you’ve built up over the course of your life. The bad news is, a lot of them aren’t very good habits.

That quick game Frogger to “loosen you up” before you get working, that always ends up being 6 hours of Frogger –– that’s a habit. And as you know, habits like that can be hard to break — which is one of the reasons why habits are so important in the first place.

Once you’ve replaced an unproductive habit with a more productive one, the new habit will be just as hard to break as the old one was. Getting there, though, can be a chore!

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The old saw about anything you do for 21 days becoming a habit has been pretty much discredited, but there is a kernel of truth there — anything you do long enough becomes an ingrained behavior, a habit. Some people pick up habits quickly, others over a longer time span, but eventually, the behaviors become automatic.

Building productive habits, then, is a matter of repeating a desired behavior over a long enough period of time that you start doing it without thinking.

But how do you remember to do that? And what about the things that don’t need to be habits — the one-off events, like taking your paycheck stubs to your mortgage banker or making a particular phone call?

The trick to reminding yourself often enough for something to become a habit, or just that one time that you need to do something, is to interrupt yourself in some way in a way that triggers the desired behavior.

The Wonderful Thing About Triggers — Reminders

A trigger is anything that you put “in your way” to remind you to do something. The best triggers are related in some way to the behavior you want to produce.

For instance, if you want to remember to take something to work that you wouldn’t normally take, you might place it in front of the door so you have to pick it up to get out of your house.

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But anything that catches your attention and reminds you to do something can be a trigger. An alarm clock or kitchen timer is a perfect example — when the bell rings, you know to wake up or take the quiche out of the oven. (Hopefully you remember which trigger goes with which behavior!)

If you want to instill a habit, the thing to do is to place a trigger in your path to remind you to do whatever it is you’re trying to make into a habit — and keep it there until you realize that you’ve already done the thing it’s supposed to remind you of.

For instance, a post-it saying “count your calories” placed on the refrigerator door (or maybe on your favorite sugary snack itself)  can help you remember that you’re supposed to be cutting back — until one day you realize that you don’t need to be reminded anymore.

These triggers all require a lot of forethought, though — you have to remember that you need to remember something in the first place.

For a lot of tasks, the best reminder is one that’s completely automated — you set it up and then forget about it, trusting the trigger to pop up when you need it.

How to Make a Reminder Works for You

Computers and ubiquity of mobile Internet-connected devices make it possible to set up automatic triggers for just about anything.

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Desktop software like Outlook will pop up reminders on your desktop screen, and most online services go an extra step and send reminders via email or SMS text message — just the thing to keep you on track. Sandy, for example, just does automatic reminders.

Automated reminders can help you build habits — but it can also help you remember things that are too important to be trusted even to habit. Diabetics who need to take their insulin, HIV patients whose medication must be taken at an exact time in a precise order, phone calls that have to be made exactly on time, and other crucial events require triggers even when the habit is already in place.

My advice is to set reminders for just about everything — have them sent to your mobile phone in some way (either through a built-in calendar or an online service that sends updates) so you never have to think about it — and never have to worry about forgetting.

Your weekly review is a good time to enter new reminders for the coming weeks or months. I simply don’t want to think about what I’m supposed to be doing; I want to be reminded so I can think just about actually doing it.

I tend to use my calendar for reminders, mostly, though I do like Sandy quite a bit.

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Featured photo credit: Unsplash via unsplash.com

Reference

[1] Getting Things Done: Trusted System

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