Warren Buffet Leadership style

Warren Buffet Leadership style: Script

Warren Buffet Background

Warren buffet was born on 30th August 1930, in Omaha, Nebraska in the US. His father was a businessperson and politician. He started developing his entrepreneurship skills at a young age, selling chewing gum, Coca-Cola, magazines, and owning pinball machines while in elementary school. Warren attended University of Pennsylvania, Columbia University, and University of Nebraska. While at Columbia University, he continued honing his entrepreneurship skills. In 1962, he started buying Berkshire Hathaway stocks and, by 1965, he took over management and control of the company. With dedication and patients, he has built the company into an American multinational conglomerate holding entity. Berkshire Hathaway, in which he leads as a chairperson and CEO, is an umbrella organisation to several businesses that include Duracell, GEICO, and NetJets, and own shares in American Express (17.6%), Well Fargo (9.9%), Apple Inc. (5.4%), Bank of America (11.5%), and the Coca Cola (9.32%). Berkshire Hathaway listed as eighth largest public company globally, registering an annual growth rate of 19.0% averagely since 1960. The consistent growth has been attributed to his control and vision for long-term investment approach.

Leadership traits and theory

Despite being worth more than $66 billion in 2017 and 3rd richest person at that time, Warren has maintained his lifestyle and basic salary (approximately $100,000 a year). He lives simple lifestyle driven by accumulating wealth rather than being complacent to riches and spending frugally. His goals in life and business remain clear and not distracted by material possessions and wanting to standout, being recognised, or attaining social status. In additional to having a modest lifestyle, living in same 3-bedroom house in Omaha for more than 50 years, Warren owned and drove same care everywhere. He lives with the model ‘you are what you are’. Warren is a philanthropic and has pledged 99% of his material wealth to charity aimed at positively changing the community. As of 2020, he has donated $41 billion (Berger, 2020). He is also referred as the ‘Oracle of Omaha’ in reference to his place of birth and success in business world. Warren is a firm believer of effective communication. He puts emphasis on expressing oneself in a manner that passes the idea to peers and colleagues clearly, that include using non-technical approach in getting the ideas and messages across. He holds a view that ‘if you can’t communicate and talk to other people and get across your ideas, you’re giving up your potential.’ Theoretically, effective communication aids in raising questions and pointing out concerns that needs address in addition to building trust and increase value among colleagues as well as across management levels. As a leader, Warren has emphasised the value of sharing information and pushing communication among colleagues and team members as a driving factors of attaining intended objectives but also connectedness within an organisation. The communication style is rooted on clarity, consistency, coherence, being direct, and creativity. Warren holds firmly the concept of vision, character, and discipline as governing principles of leadership and management approach. In addition to being a risk taker leading to being considered most successful investor of all time, he is a believer that if someone else if better in something than he is, he let them do it. Additionally, he models himself to getting things done through other people, particularly those qualified within their respective fields. Investment approach, he has deployed an approach characterised under ‘founder centrism’ where managers and followers follow his directions while buying in to the shared goals of exponential value collection. He lets the managers under him to manage and run the business operations autonomously. As such, under hands-off approach, managers are given liberty to formulate business strategic planning and solving problems faced while trusting they will complete their tasks effectively and efficiently. The approach empowers his management team as well as enhancing trust and confidence on abilities and capabilities on individual manager and employee. George’s concept of authentic leadership under having purpose, being self-disciplined, connecting with followers, and holding individual value in what one does, Warren holds this attributes. One can argue, these attributes is what makes him a great leader. Although several theories explaining leadership approach exist currently, Laissez-Faire argues on putting trust and reliance on others that include management and employees. The theory argues that people should be given a place to develop and being creative, while using available resources and experiences to achieve individual and collective goals.

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References

Berger, S. (2020). Warren Buffett has been making the same salary for decades — and it’s surprisingly low. CNBC.com. Retrieved 16 December 2020, from https://www.cnbc.com/2018/03/19/warren-buffetts-berkshire-hathaway-salary.html.

Buch, R., Martinsen, Ø.L. and Kuvaas, B., 2015. The destructiveness of laissez-faire leadership behavior: The mediating role of economic leader–member exchange relationships. Journal of Leadership & Organizational Studies, 22(1), pp.115-124.

Covelli, B.J. and Mason, I., 2017. Linking theory to practice: Authentic leadership. Academy of Strategic Management Journal, 16(3), pp.1-10.

Forbes. (2020). Warren Buffett. Forbes. Retrieved 15 December 2020, from https://www.forbes.com/profile/warren-buffett/?sh=244ae15f4639.

McGregor, J. (2015). The leadership wisdom of Warren Buffett. www.washingtonpost.com. Retrieved 16 December 2020, from https://www.washingtonpost.com/news/on-leadership/wp/2015/03/02/the-leadership-wisdom-in-warren-buffetts-letter/.

Yang, I., 2015. Positive effects of laissez-faire leadership: conceptual exploration. Journal of Management Development.

Zubair, A., 2015. Authentic leadership and creativity: Mediating role of work-related flow and psychological capital. Journal of Behavioural Sciences, 25(1), p.150.