Part 1 - A Moment with the Oracle: Leadership Lessons from Warren Buffett

Warren Buffet, CEO of Berkshire Hathaway, is one of the world’s most successful investors and philanthropists. But probably not many had the opportunity to see how he interacts and coach the business leaders. This article, I hope to share some insights and leadership lessons that I gleaned from Warren’s town hall and in the next article, on my 10-minute interaction that continuous reap rewards for me shaping my approach to leadership and coaching.

TOP : Bernard's meeting with Mr Warren Buffett

In November 2012, while with my previous employer, I was asked by my CEO James Hambrick in Cleveland, Ohio to be in head office for an important meeting on 1 December 2012. Very puzzling indeed, no details were given and I was just in The Lubrizol Corporation head office in late September for the global leadership meetings.

Anyway, arriving 2 days earlier, the corridor talk is that Warren Buffett is coming to conduct a town hall. Lubrizol was acquired by Berkshire Hathaway a year before, and Warren is taking special time out to meet key personnel and conduct a town hall. I was indeed privileged as the only regional leader invited to join this 100 people town hall. James has shared his experiences with Warren which never failed to impress me. I can’t wait to hear him LIVE. We all have heard of senior executives paying between USD10 to 20 thousand to hear his words of wisdom over a lunch with him. And here I am, meeting him in person, listen to this Oracle for free.

1.       Firstly, on the town hall meeting itself, it was a masterclass in business acumen.

James and Warren both had a seat on stage, and the round table between them has 2 cans of Coke as can be expected. James gave a simple introduction for Warren and after that Warren spoke for 30 minutes. Warren started with sharing the Berkshire Hathaway story of him and his trusted business partner Charlie Munger.   Warren, despite his humble demeanour, exuded executive presence. He spoke about Berkshire Hathaway's philosophy of investing in companies that are "doing everything right," highlighting Lubrizol's success in a niche specialty chemicals market.

2.       He explained Berkshire Hathaway’s philosophy of investing in companies. He has about 70 wholly owned companies and many companies that they have a share in. Coke is a classic example, another company closer to home is BYD.

3.       Warren explained that he analysed our 10 years performance before deciding to acquire Lubrizol. He feels that we are “doing everything right” as a niche specialty chemicals company. Our USD7 billion global turnover is a fraction of the close to USD100 billion companies such as Dow Chemicals, BASF and Bayer. But Lubrizol has a much better return, more than 2 times in terms of operating income vs. revenue and Lubrizol is the only chemicals company he has invested in. He highlighted that Lubrizol’s technology innovation is the right driving force of our strategy, coupled with superb value delivery to customers.

4.       During the Q&A, Warren demonstrated several leadership core competencies, one of which is his coach-like leadership style.

5.       Someone asked how involved he will be in our business. Warren explained that he has 70 wholly owned subsidiaries, and he has no or little knowledge of their industry dynamics. He fully empowers his CEOs, including James to run Lubrizol business. Warren went on to say he spends up to 30 minutes a month to catch up with each of his CEOs on the phone. But Warren makes it clear that he expects Lubrizol to continue growing profitably.

6.       When asked on his many CEOs different challenges in their respective industries, Warren demonstrated his deep understanding of what keep CEOs “awake at night”. They are similar- how to grow/expand, investing in growth regions in Asia, India, Latin America, etc., maintain/grow margins, costs, innovation challenges, competition, and succession planning. A great learning impact for me indeed, Since I became an Executive and CEO coach 5 years ago, I applied his concepts and it is clear that Warren fully understands what drives business success, and what to focus on.

7.       On his expectation of profitable growth, a business leader asked if we can go for bigger revenue growth with lower margins but still resulting in higher overall profit. Warren’s reply is clear on accountability from Lubrizol. He is respectful, encourages us to set and achieve clear goals to continue to maintain our current level of profitability, not to reduce it. He reiterated that we have to continue our technology innovation which is the driving force of our strategy, and value delivery to our customers to differentiate from the big commodity chemicals companies. A great learning for me on mission, vision, purpose and accountable on returns.

In summary, Warren Buffett is a financial investor, not someone running a global business. However, during his town hall, Warren demonstrated his coach-like leadership and wisdom.  

With coaching and mentoring in my heart, I reflected on the town hall. Warren has several core leadership and coaching competencies intertwined when he talks and discuss with people:

• Strong business acumen. He delegate/empower his CEOs fully with the 70 companies owned by him, He simply focused on the 3 to 5 most critical issues his CEOs have and guide them accordingly.

• Hold you accountable for expected results. On profitability and revenue, he is firm and assertive but not aggressive or abrasive.

• Humility. Warren was open and has the courage to say that he doesn’t know the business dynamics of Lubrizol and most of his companies.

• Communicate clearly with simple, clear, concise words.

  
  

• Listen actively. He gave people his full attention, empathetic listening to understand the questions before he gave a reply.

  
  

• Respectful. He is professional, treated everyone with respect and dignity. I will share more on how he treated me with respect in the next article on my 10-minute 1 on 1 conversation with Warren after his town hall.

Since 2012, I consciously apply the learnings I gained from Warren’s above 6 wisdoms on leadership with a coach-like approach on business and life. For Lubrizol in Asia, this benefited my team and business, and also in developing future leaders. And for the last 5 years, I continue to utilise Warren’s wisdom and at the same time, deepening my coaching knowledge and skills as an executive and CEO coach. I am able to coach successful CEOs and senior leaders to be more effective and more successful in business and in their personal life.

About the Blog Contributor : Mr Bernard Wong

Bernard is an experienced business leader with over 30 years of experience in Asia Pacific. Bernard posses strong, proven track record as a business leader, having successfully led two businesses in China and one business for the Asia Pacific over 17 years. Currently an executive coach, Bernard help elevate his coachee, learners strengthen their leadership perspectives and drive sustainable business success. For queries on his work and training, do write to enquiries@odctraining.com.sg to request for an appointment.