Excellent article from the Wall Street Journal that extrapolates a portion of Berkshire-Hatheway’s conference call (link below). This portion of the call is where Warren Buffet calls out companies that have poor leaders and how that is a danger. I know this is a sensitive topic because, well, let’s face it: only 1 in 10 of corporations have solid leadership up and down the hierarchy.
“You get a guy or a woman in charge of it—they’re personable, the directors like ’em—they don’t know what they’re doing. But they know how to put on an appearance. That’s the biggest single danger,” Warren Buffett
I must admit that I am not a big fanboy of Warren Buffet or Charlie Munger. They might be the largest ‘rent seekers’ in America, but they are shrewd in business and I have a lot of respect for them.
Many companies survive due to their product or the current market, not due to great leaders. When assessing companies, sourcing professionals have to be keen to this. Hiccups in the supply chain is not the time to find out there is poor leadership at your supplier. It is especially important when making an investment in a company. I often say I don’t do miracles, nor do I have silver bullets or magic dust. Often though I feel compelled to make a miracle happen, sometimes it does! I see so many companies sprouting up in emerging markets but I can’t make out what they really do, or are going to do. I wonder what will eventually happen to them. We all learned that 1 in 10 companies will survive, but for how long?
As we break through this pandemic (see below for my sentiment on the pandemic), every company needs to take its own inventory, assess internally what are the strengths and where are the weaknesses. As a CEO you have to ask: Why are my managers tasking employees to be advanced with MySQL when their job is in documentation or planning. These things would be considered waste if we applied Six Sigma principles to our internal processes. As you should know, waste is throwing money out the window.
There are so many companies out there that have great products and I can see them going to the next level. It is sad watching them implode due to poor leadership. Then again, that is how strong companies scrape up great technology for pennies on the dollar. This cycle of technology might be far wider and greater than any before, and more damaging.
*My take on the pandemic: Any leader worth their salt will make a statement in writing to their employees that “The pandemic is real, we need to get vaccinated and work together to come through this stronger than we were”.
Mark says:
Thanks for your blog, nice to read. Do not stop.