Few leaders have mastered the art of management as effectively as Warren Buffet.
Chairman and CEO of Berkshire Hathaway, Mr. Buffett is extolled as an inspiring, business-savvy and effective leader, not only by his thousands of employees, but by the numerous other company CEOs under him. Mr. Buffett's second-in-command is his long-time business partner and vice chairman Charlie Munger, who is also lauded as a world-class leader.
As leaders of large, multi-state health systems can attest, managing subsidiary hospitals and their leaders can prove a difficult task. CEOs are characteristically confident and competitive — two skills essential to driving progress, but that could also increase vulnerability for conflict. Butting heads is inevitable from time to time, but there are strategies system leaders can employ to promote coordination, collaboration and positivity between themselves and their C-level teammates.
Although health systems and holding companies have their fair share of differences, Mr. Buffett's remarks and management philosophy may ring true for system executives overseeing large teams. Here are 11 pieces of management advice from Mr. Buffett, pulled from Berkshire Hathway's annual shareholder letters, which he pens himself.
1. "When you have able managers of high character running businesses about which they are passionate, you can have a dozen or more reporting to you and still have time for an afternoon nap. Conversely, if you have even one person reporting to you who is deceitful, inept or uninterested, you will find yourself with more than you can handle." (1986)
2. "Our managers are a very special breed. At most large companies, the truly talented divisional managers seldom have the job they really want. Instead they yearn to become CEOs, either at their present employer or elsewhere. Indeed, if they stay put, they and their colleagues are likely to feel they have failed.At Berkshire, our all-stars have exactly the jobs they want, ones that they hope and expect to keep throughout their business lifetimes. They therefore concentrate solely on maximizing the long-term value of the businesses that they 'own' and love." (2000)
3. "In neither the purchase of goods nor the hiring of personnel, do we ever consider the religious views, the gender, the race or the sexual orientation of the persons we are dealing with. It would not only be wrong to do so, it would be idiotic. We need all of the talent we can find, and we have learned that able and trustworthy managers, employees and suppliers come from a very wide spectrum of humanity." (2001)
4. "We would rather suffer the visible costs of a few bad decisions than incur the many invisible costs that come from decisions made too slowly — or not at all — because of a stifling bureaucracy." (2008)
5. "Charlie and I try to behave with our managers just as we attempt to behave with Berkshire's shareholders, treating both groups as we would wish to be treated if our positions were reversed. Though 'working' means nothing to me financially, I love doing it at Berkshire for some simple reasons: It gives me a sense of achievement, a freedom to act as I see fit and an opportunity to interact daily with people I like and trust. Why should our managers — accomplished artists at what they do — see things differently?" (1999)
6. "We must continue to measure every act against not only what is legal but also what we would be happy to have written about on the front page of a national newspaper in an article written by an unfriendly but intelligent reporter." (In a memo to Berkshire Hathaway managers, 2010)
7. "Somebody is doing something today at Berkshire that you and I would be unhappy about if we knew of it. That's inevitable: We now employ more than 250,000 people and the chances of that number getting through the day without any bad behavior occurring is nil. But we can have a huge effect in minimizing such activities by jumping on anything immediately when there is the slightest odor of impropriety. Your attitude on such matters, expressed by behavior as well as words, will be the most important factor in how the culture of your business develops. Culture, more than rule books, determines how an organization behaves." (In a memo to Berkshire Hathaway managers, 2010)
8. "At Berkshire, managers can focus on running their businesses: They are not subjected to meetings at headquarters nor financing worries nor Wall Street harassment. They simply get a letter from me every two years and call me when they wish. And their wishes do differ: There are managers to whom I have not talked in the last year, while there is one with whom I talk almost daily. Our trust is in people rather than process. A 'hire well, manage little' code suits both them and me." (2010)
9. "Sometimes our managers misfire. The usual cause of failure is that they start with the answer they want and then work backwards to find a supporting rationale. Of course, the process is subconscious; that's what makes it so dangerous." (2012)
10. "We have hired some wonderful people — and they have stayed with us. Moreover, no one is hired unless he or she is truly needed. That's why you've never read about 'restructuring' charges at Berkshire." (2015)
11. Character is crucial: A Berkshire CEO must be "all in" for the company, not for himself. (I'm using male pronouns to avoid awkward wording, but gender should never decide who becomes CEO.) … It's important that neither ego nor avarice motivate him to reach for pay matching his most lavishly-compensated peers, even if his achievements far exceed theirs. A CEO's behavior has a huge impact on managers down the line." (2014)