Manage Diverse: Hanging World, Essay Example

There are individuals we admire because of their accomplishments such as Muhammad Ali and Albert Einstein and there are also those who are particularly admired for their leadership skills such as GE’s legendary Jack Welch and Wal-Mart’s Sam Walton. But there are very few individuals who are not only admired for their leadership skills and accomplishments but also for their ethics and principles and Warren Buffet is one of them. I do not know any other leader in modern times whose character and business conduct has never been questioned. Warren Buffet is the epitome of an ideal leader because he doesn’t only lead but also helps his followers realize their true potential.

I have selected Warren Buffet because even though his primary source of popularity is his investment record, Buffet’s success has as much to do with his leadership skills and ethical conduct as it has to do with his investment acumen. Like any great leader, Buffet understands his own strengths and weaknesses and do not try to venture out of his expertise. A great example is Buffett’s conduct during the internet bubble when he refused to invest in internet stocks because he didn’t understand the business models of the internet companies (Arends). I also admire Buffet because he understands the value of reputation as well as setting examples for his subordinates. He didn’t even hesitate from letting go his heir apparent David Sokol (Ng, Ovide and Holm) because not doing so would have hurt the company’s reputation for business integrity and ethical conduct.

Of the four managerial tasks, Warren Buffet is probably best at leading. Buffet realizes he cannot be best at everything so one of his keys to success is acquiring or buying stakes in companies that are run by efficient people and grant them the freedom to continue running things as they see fit. Buffet understands that people show their true potential when they are motivated and given freedom to make decisions. Buffet has maintained that his successor will also ensure that the key managers in companies owned by Berkshire Hathaway will continue to operate their companies independently. Buffet also understands that people do well when they love work and many of Buffet’s managers do not work for money but because they love what they do (Seattle Pi). This may also be the reason why Berkshire Hathaway has a history of acquiring companies for the cheap and many owners desire to sell their companies to Buffet even if they may get more elsewhere. This is because they know Buffet trusts the management in the companies he acquires and one of the factors he looks for in potential acquisitions is a capable management.

One of the leadership tasks that has come to define Warren Buffet’s leadership style is delegation. Buffet focuses on identifying investment opportunities as well as portfolio management while leaves the operations of Berkshire Hathaway’s subsidiaries to his managers many of whom have been working for Berkshire for many years now. This shows Buffet’s trust in his managers. This may also be the reason why managers have been working for Buffet for so long because they are given an opportunity to grow and make decisions which results in high levels of motivation and job satisfaction.

References

Arends, Brett. Buffett’s tips for new investors. 11 November 2010. 1 August 2012 <http://money.msn.com/how-to-invest/buffetts-tips-for-new-investors-wsj.aspx>.

Ng, Serena, Shira Ovide and Erik Holm. Buffett Calls Sokol Stock Purchases ‘Inexcusable’. 1 May 2011. 1 August 2012 <http://online.wsj.com/article/SB10001424052748704167404576295031517957882.html>.

Seattle Pi. Buffett says his successor will run Berkshire well. 5 May 2012. 1 August 2012 <http://www.seattlepi.com/news/article/Buffett-says-his-successor-will-run-Berkshire-well-3536875.php>.