Mary Buffett - Warren Buffetts Management Secrets: Proven Tools for Personal and Business Success

ALSO BY MARY BUFFETT AND DAVID CLARK

Buffettology

The Buffettology Workbook

The New Buffettology

The Tao of Warren Buffett

Warren Buffett and the Interpretation of Financial Statements

Proven Tools for Personal and Business Success

MARY BUFFETT & DAVID CLARK

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Copyright 2009 by Mary Buffett and David Clark

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First Scribner hardcover edition December 2009

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Library of Congress Cataloging-in-Publication Data is available.

ISBN 978-1-4391-4937-9
ISBN 978-1-4391-5488-5 (ebook)

For Sam and Dexter

In the chronicles of the investment life of Warren Buffett much has been written about his investment methods. Each and every investment he has ever made has been taken apart and analyzed in excruciating detail. David and I alone have written the books Buffettology, The Buffettology Workbook, The New Buffettology, The Tao of Warren Buffett, and Warren Buffett and the Interpretation of Financial Statementsall on Warrens investment methods and all international best-sellers.

But what was sorely missing from the body of Warren Buffett literature was a book that addresses and discusses the brilliant way Warren has managed his life, his businesses, and the people who manage Berkshire Hathaways 233,000 employees around the globe. Besides being a genius at investing, Warren Buffett is also a genius of a manager, with over eighty-eight CEOs of different companies reporting directly or indirectly to him. In modern business no man has managed a more highly talented group of managers, in so many diverse businesses, and delivered such spectacular results.

In many ways Buffetts managerial record surpasses even his amazing investment record with Berkshire Hathaway, where the companys operational annual net income grew from $18 a share in 1979 to $4,093 a share in 2007. This equates to a compounding annual growth rate of 21.39 percent, a record that indicates that Warren and his managers are doing a fantastic job of minding the store. (In comparison, Berkshires investment portfolio for the same period grew at an annual compounding rate of 19.78 percent, which means we can argue that as a manager Warren outperformed himself as an investor.)

In our quest to bring you all things Warren Buffett, we have written the first ever book that takes an in-depth look at Warrens management methodswhat they are, how they work, and how you can use them. We discuss the impact that Dale Carnegie had on Warrens life and how Carnegies teachings helped transform Warren into the master manager he is today.

We have kept the book easy to read, with short chapters. The methods that Warren uses are simple and easy to understand, but, as you will see, their impact is powerful.

We look to the future and imagine many generations using Warrens enlightened management methods to inspire and motivate people of all ages to achieve their dreams and visions.

MARY BUFFETT AND DAVID CLARK

July 1, 2009

Once upon a time there was a slightly nerdish young man by the name of Warren Buffett, who, at the age of twenty, was frightened to death to stand up in front of people and speak to them. Then he discovered Dale Carnegies course on public speaking and it changed his life. Not only did he develop the courage and skill to speak in front of groups of people, he learned how to make friends and motivate people. Warren considers his Carnegie education a life-changing event and the most important diploma he has ever received.

Once Warren was comfortable with public speaking, he also became a devotee of Dales philosophy on interacting with people. He read and reread Carnegies book How to Win Friends and Influence People dozens of times, underlining it and memorizing entire passages. The book became his bible for dealing with people and one of the cornerstones of his management philosophy.

Was he successful?

Here is what A. L. Ueltschi, the founder and chairman of FlightSafety International Inc., the worlds leading aviation training company, told author Robert P. Miles about Warren as his boss: Leadership is really what a good manager is about. The letters of the word represent the qualities that a good manager should have:

L is for loyalty and

E is for enthusiasm.

A stands for attitude, and

D is for discipline.

E stands for exampleyou have to set a good exampleand

R is for respect.

S represents scholarliness, and

H is for honesty.

I and

P stand for integrity and pride.

The thing I like best about Warren Buffett is that he possess all these qualities.

We will examine Warrens leadership qualities and how Warren synthesized what he learned into a winning management formula, and became not only the manager that other managers want to emulate, but also the second richest man in the world.

To facilitate the learning process, weve broken down Warrens management philosophy into the following five segments or stepseach working with the others to create the perfect combination of management skills.