Warren Buffett’s Management Secrets – “Five Terrific Business Tools.”December 4, 2009
I read something in the first chapter of this little book that I have been thinking about for days: “Pick the right business to work for.” It seems simple, but means the difference between a high-paying career and a life of drudgery. Yet most of us, at least when the age we are first looking for a job, take anything. We don’t feel we deserve choice. In a nutshell, that is the most amazing quality of this compendium of five simple principles for personal and business success, it empowers the reader…
It gives us choice. It even allows us to fail…Management Secrets reminds me of another favorite of mine, The Actor’s Handbook by some of David Mamet’s former students at NYU. I’m a big fan of the playwright and have read his books, but there is something about getting the information from a second-party that is almost better. It’s as if they have taken the time and effort to assimilate a complex subject and put it in such a way that can implement it. That’s certainly true here. The two authors tell us how to determine the “right business to work for” in terms of per share earnings, debt and gross margin, and even follow these with a course of action for people who find themselves in the wrong choice, “So if you find yourself working for a company with poor inherent economics, it is better to get out now than it is to stick around year after year waiting for things to change.”
There are stages businesses go through and an entrepreneur may go against everything people advise to start a new enterprise, but he or she needs to turn around and delegate to others if the company is to ever reach the next level. That’s a challenge that leads to micro-managing or bureaucrats bending to the perceived wishes of their superiors. Buffett advises: “In the management of our lives, the rule is: Love what you do. In the management of our businesses, the rule is: Hire people who love what they do.” And, of course, let them do it. I agree, that the deepest principle in human nature is a need to be appreciated. Warren Buffett seems to be a genius at this, but a great thing about this book is that reading it we are convinced we can be good at doing this too. There are some basics, like “if you must criticize someone personally, praise them first,” that sound a little too Dale Carnegie simplistic to me (Buffett is a great follower of Carnegie), but for success we should think of what others want instead of what we want, and how to encourage others to come up with bright ideas instead of following ours. Chapter 21, “Hidden Dangers of Making a Living on Borrowed Money” is as good an explanation as you’ll find anywhere on our present financial quagmire.
But I love the candor with which this wisdom is presented, “Hire an adviser and his job likely becomes to advise you to do what you wanted to do in the first place. Advisers who voice dissent too often are soon out of a job. Most people don’t keep ‘no men’ around.” And perhaps that’s the beauty of this book. It doesn’t tell us we are wrong or right, but reminds us of some things we may have forgotten in our day-by-day. Things that make us better managers, but also allow us to love what we are doing more. You can read Warren Buffett’s Management Secrets in a couple hours, but my guess is that, once you do you will keep it handy and read it again, often.
Buy this directly from amazon for $13.75.
Click on the title to the right: Warren Buffett’s Management Secrets: Proven Tools for Personal and Business Success