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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

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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 October 21, 2019

How to Be a Good Leader and Lead Effectively

How to Be a Good Leader and Lead Effectively

U.S. Sen. Elizabeth Warren, a contender for the 2020 Democratic nomination, is a reminder of why I am so drawn to leadership as a topic. Whenever I think it is impossible for me to be more impressed with her, she proves me wrong.

Earlier this week, a former marine suggested that he had been in a long-term sexual relationship with the Senator. She flipped the narrative and used the term “Cougar,” a term used to describe older women who date younger men, to reference her alma mater.

Rather than calling the young man a liar, or responding to the accusations in kind, she re-focused the conversation back to her message of college affordability and lifted up that “Cougar” was the mascot for her alma mater. She went on to note that tuition at her school was just $50 per semester when she was a student. Class act.

But by the end of the week, news broke that U.S. Sen. Bernie Sanders, another contender for the presidency, had a heart attack. Warren not only wished Sanders a speedy recovery but her campaign sent a meal to his staff. She knew that the hopes of staff, donors and supporters were with the Senator from Vermont and showed genuine compassion and empathy.

To me, she has proven time and time again that she is more than a presidential candidate: she belongs in a leadership hall of fame.

What makes some people excel as leaders is fascinating. You can read about leadership, research it and talk about it, yet the interest in leadership alone will not make you a better leader.

You will have more information than the average person, but becoming a good leader is lifelong work. It requires experience – and lots of it. Most importantly, it requires observation and a commitment to action. Warren observed what was happening with Sen. Sanders, empathized with his team and then took action. Regardless of the outcome of this election, Sanders’ staff will likely never forget her gesture.

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You would have had to work on a political campaign in order to appreciate the stress and anxiety that comes with it. In this moment, staff may not remember everything that Warren said throughout the lengthy campaign, but they will remember what she did during an unforgettable time during the campaign.

If this model of leadership is appealing, and if you are searching for how to up your own leadership game, read on for six characteristics that good leaders share:

1. Good leaders are devoted to the success of the people around them.

Good leaders are not self-interested. Sure, they want to succeed, but they also want others to succeed.

Good leaders see investing in others just as important as they see investing in themselves. They understand that their success is closely tied to the people around them, and they work to ensure that their peers, employees, friends and family have paths for growth and development.

While the leaders may be the people in the spotlight, they are quick to point to the people around them who helped them (the leaders) enter that spotlight. Their willingness to lift others inspires their colleagues’ and friends’ devotion and loyalty.

2. Good leaders are not overly dependent on others’ approval.

It is important for managers to express their support for their teams; good leaders must be independent of the approval of others. I explained in an article for The Chronicle of Philanthropy, that:[1]

“While a desire to be loved is natural, managers who prioritize approval from subordinates will become ineffective supervisors who may do employees harm. For example, a manager driven by a need for approval may shy away from delivering constructive feedback that could help an employee improve. A manager fearful of upsetting someone may tolerate behavior that degrades the work environment and culture.”

In yet another example, a manager who is dependent on the approval of others may not make decisions that could be deemed unpopular in the short run but necessary in the long run.

Think of the coaches who integrated their sporting teams. Their decision to do so, may have seemed odd, and even wrong, in the moment, but time has proven that those leaders were on the right side of history.

3. Good leaders have the capacity to share the spotlight.

Attention is nice, but it is not the prime motivator for good leaders. Doing a good job is.

For this reason, good leaders are willing to share the spotlight. They aren’t threatened by a lack of attention, and they do not need credit for every accomplishment. They are too focused on their goal and too focused on the urgency of their work.

4. Good leaders are students.

In the same way that human beings are constantly evolving, so too are leaders. As long as you are living, you have the potential to learn. It doesn’t matter how much knowledge you think you have; you can always learn something new.

I have the experience of thinking I was doing everything right as a manager, only to receive conflicting feedback from my team. Perhaps my approach was not working for my team, and I had to be willing to hear their feedback to improve.

Good leaders understand that their secret sauce is their willingness to keep receiving information and keep learning. They aren’t intimidated by what they do not know: As long as they maintain a willingness to keep growing, they believe they can overcome any obstacle they face.

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As both masters and students, good leaders read, listen and study to grow. They consume content for information, not just entertainment purposes. They aren’t impressed with their knowledge; they are impressed with the learning journey.

5. Good leaders view vulnerability as a superpower.

It means “replacing ‘professional distance and cool,’ with uncertainty, risk, and emotional exposure,” said Emma Sappala in a Dec. 11, 2014, article, “What Bosses Gain by being Vulnerable” for Harvard Business Journal.[2] She went on to note the importance of human connection, which she asserts is often missing at work.

“As leaders and employees, we are often taught to keep a distance and project a certain image. An image of confidence, competence and authority. We may disclose our vulnerability to a spouse or close friend behind closed doors at night but we would never show it elsewhere during the day, let alone at work.”

This rings so true for me as a woman leader. I was raised believing that any show of emotion in the workplace could be used against me. I was raised believing that it was best for women leaders to be stoic and to “never let ‘em see you sweat.” This may have prevented me from connecting with employees and colleagues on a deeper, more personal level.

6. Good leaders understand themselves.

I am a huge fan of life coach and spiritual teacher Iyanla Vanzant. In addition to her hit show on the OWN network, Vanzant has authored dozens of books. In her books and teachings, she underscores the importance of knowing ourselves fully. She argues that we must know what makes us tick, what makes us happy and what makes us angry.

Self-awareness enables us to put ourselves in situations where we can thrive, and it also enables us to have compassion when we fall short of the goals and expectations we have for ourselves. Relatedly, understanding ourselves will allow us to know our strength. When we know our strengths, we will be able to put people around us who compliment our strengths and fill the gaps in our leadership.

Final Thoughts

Being a good leader, first and foremost, is an inside job. You must focus on growing as a person regardless of the leadership title that you hold. You cannot take others where you yourself have not been. So focusing on yourself, regardless of your time or where you are in your career will have long term benefits for you and the people around you.

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Further, if you want to become a good leader, you should start by setting the intention to do so. What you focus on grows. If you focus on becoming a better leader, you will research and invest in things that help you to fulfill this intention. You will also view the good and bad leadership experiences as steppingstones that hone your character and help you improve.

After you set the intention, get really clear on what a good leader looks like to you. Each of us has a different understanding of leadership. Is a good leader someone who takes risk? Is a good leader, in your estimation, someone who develops other leaders? Whatever it is, know what you’re shooting for. Once you define what it means to be a good leader, look for people who exemplify your vision. Watch and engage with them if you can.

Finally, understand that becoming a good leader doesn’t happen overnight. You must continually work at improving, investing in yourself and reflecting on what is going well and what you must improve. In this way, every experience is an opportunity to grow and a chance to ask: ‘What is this experience trying to teach me?’ or ‘what action is necessary based on this situation?’

If you are committed to questioning, evaluating and acting, you are that much closer to becoming a better leader.

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Featured photo credit: Sam Power via unsplash.com

Reference

[1] The Chronicle of Philanthropy: Why Good Managers Overcome the Desire to Be Liked
[2] Harvard Business Journal: What Bosses Gain by being Vulnerable

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