“..seek managers whose goals include delighting their customers, cherishing their associates and acting as good citizens of both their communities and our country.” Warren Buffett, 2019 Shareholders Letter.
When it comes to successful leaders, the name Warren Buffet is synonymous with running a successful business that sets the bar for others when it comes to financial performance and in hiring and developing leaders. As Warren Buffet has often said,
“We look for three things when we hire people. We look for intelligence, we look for initiative or energy, and we look for integrity. And if they don’t have the latter, the first two will kill you because if you’re going to get someone without integrity, you want them lazy and dumb.”
Warren Buffett
Running a successful business on the scale, Warren Buffet does this with Berkshire Hathaway hiring and developing good management is essential. Berkshire Hathaway categorizes their operations into segments and groups its subsidiaries into the following categories:
- Insurance
- Railroads
- Utilities
- Manufacturing
- Consumer Products
- Service
- Retailing
Many of the companies owned in part or in whole by Berkshire Hathaway in each of these categories are household names. They include companies like GEICO, Fruit of the Loom, Helzberg’s Diamonds, and many more. With holdings as vast as Berkshires’ and almost 400,000 employees to be successful across all those segments, you need not only outstanding leadership but a culture that fosters, encourages, and promotes great leaders. As Warren Buffet likes to say, “When you have able managers of a 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.”
3 Essential Leadership Traits According To Warren Buffet
As mentioned earlier, there are three traits that Berkshire looks for not only in successful leaders but all employees. Let’s take a closer look at each of those traits and why they are important in great leaders.
1. Intelligence
“One can best prepare themselves for the economic future by investing in your own education. If you study hard and learn at a young age, you will be in the best circumstances to secure your future.” When we talk about intelligence, it does not always have to mean you are an expert at everything. It is also understanding the importance of continual learning and education. A great leader not only knows their strengths but also knows their weaknesses. They surround themselves with other leaders and team members who are experts in those areas and give them the room to lead and listens to the insight and expertise they bring to the position and organization.
2. Initiative or energy
What do we mean when we say initiative or energy is an essential trait of effective leadership? Simply put, it is that personal drive or initiative to be successful, be excited to lead, and build an enduring organization focused on growth. Nobody would want to hire a leader that is lazy or has no initiative or drive to be successful.
3. Integrity
Integrity is not something you can fake and when you make decisions that show you have a lack of integrity, gaining trust back is next to impossible. It is the most valuable commodity an effective leader can possess. Integrity is not, as the saying goes, just doing the right thing when everyone is looking. It is doing the right thing when nobody is looking, even when that decision is a difficult one. Choosing the right path, not just the easy path, is critical to long-term success as a leader.
When you lead with integrity, you gain the trust of those you lead, and your leaders and are seen as someone with ethics who can challenge and be challenged and depended on to make and keep promises. This leadership trait is vital if you want to take your organization to the next level and continue to grow and prosper. Without integrity, those other key leadership traits of intelligence and initiative or energy are not only worthless but can be dangerous. As Warren Buffet has often said, “It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you’ll do things differently.”
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A Culture Of Trust And “Principles Of Behavior”
Warren Buffett does not have a book of rules for his leaders and employees; instead, he has something called the “principles of behaviours.” It is a way of leading not based on rules or judgment but on trusting leaders and employees to do a good job, which creates an environment allowing them to flourish. However, you can’t just give that trust lip service. Without the right corporate structure and culture, it can result in poor results. You must develop a culture that allows everyone to be productive, successful, and do so with integrity. Warren Buffet believes in the importance of motivating and rewarding employees, but rewards don’t always have to be financial ones. Sometimes a simple compliment or recognition is more valuable than any financial reward could ever be.
When developing a culture that hires and develops successful leaders with integrity taking the simple approach Warren Buffet does of hiring those with intelligence, initiative, or energy, and integrity is critical to success. We will leave you with one final quote from Warren Buffet that rings true in every situation. “It’s better to hang out with people better than you. Pick out associates whose behaviour is better than yours, and you’ll drift in that direction.”
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