“Warren Buffett and the Business of Life”

Leadership Biography

Total Leadership

Spring 2013

George Schultz

The Real Warren Buffett…“I offer you the real Warren Buffett. A manger of capital. And a

leader of people.” - James O’Loughlin

Born in 1930 (currently 82) in Omaha, Nebraska – two siblings Father (Howard Buffett) was US Representative Attended Wharton before transferring to University of Nebraska–Lincoln. Received MBA

from Columbia Business School. Joined Graham-Newman (1954-56) to work for his idol, Ben Graham. Moved back to Omaha to start the Buffett Partnership (1956-1969) Unintentionally took over Berkshire Hathaway Inc. (“BRK”), a textile manufacturer, in

1970. Became CEO and Chairman. Later partnered with friend Charlie Munger. Through investments (both public and private) Buffett grew BRK into a $250 billion

company…earning the nickname, “The Oracle of Omaha.” $10,000 invested with Buffett at the start of his tenure would be worth somewhere in the

neighborhood of $500 million (before taxes) today Currently the 3rd wealthiest person in the world, and one of the most influential people.

Pledged 99% of his fortune for philanthropy.

Much can be learned from studying Buffett – both about investing and, more importantly, about life…

The Four Domains Buffett at Work…

Found his passion (very) early “We’ve been deploying capital since I

was 11. That’s our business.” Does what he loves

“I enjoy the process far more then the proceeds, though I have learned to live with those as well.”

“If we were not paid at all, Charlie and I would be delighted with the cushy jobs we hold.”

Very good at motivating people “He has a way of motivating you. He

trusts you so much that you just want to perform.” – Bill Child, R.C. Willey Home Furnishings

The Four Domains Buffett in the Community…

Makes time for friends (plays bridge 12 hours/week!) “He’s just my best friend. He’s

changed my life. I’m the luckiest human being in the world.” -Sharon Osberg (Bridge Partner)

Gives back “If you’re in the luckiest 1 per cent

of humanity, you owe it to the rest of humanity to think about the other 99 per cent.” – Warren Buffett

Views himself as a teacher Bases his life on “deserved

trust” “It’s a new concept in business. It’s

called trust.” – Barry Tatelman, Jordan’s Furniture

The Four Domains Buffett on Self…

Keeps an internal scorecard “The big question about how people behave is

whether they’ve got an Inner Scorecard or an Outer Scorecard. It helps if you can be satisfied with an Inner Scorecard.

Does what makes him happy “I really like my life. I arranged my life and so

that I can do what I want… I tap dance to work, and when I get there, I think I’m supposed to lie on my back and paint the ceiling.”

Is a continuous learner “Warren Buffett is one of the best learning

machines on this earth. The turtles which outrun the hares are learning machines. If you stop learning in this world, the world rushes right by you.” – Charlie Munger

Instills good habits “Chains of habit are too light to be felt until they

are too heavy to be broken”

The Four Domains Buffett with Family…

Recognizes the importance of family “(LTCM) was a major deal…but it could not

have come at a worse time. Buffett was trying to leave his office to get to a granddaughter's birthday party.” - Fortune

Integrates Buffett brought along and reread (to his

wife) Security Analysis during their honeymoon

Son, Howard, is a board member of BRK Experiments

“Eventually, Warren Buffett bought his son a farm. However, he charged Howard rent based on his son's body weight”

Wants his children to find their passion “A very rich person should leave his kids

enough to do anything but not enough to do nothing.”

ConclusionClassic Buffett Question: Imagine that you may choose one other student in your class, and thereafter be entitled to 10 percent of that student’s earnings for life. Who would you choose?

“The interesting thing is, when you think about what’s going through your mind, you’re not thinking about things that are impossible for you to achieve yourself. You’re not thinking about who can jump 7 feet, who can throw a football 65 feet, who can recite pi to 300 digits, or whatever it might be. You’re thinking about a whole lot of qualities of character. The truth is, that every one of those qualities is obtainable. They are largely a matter of habit. My old boss, Ben Graham, when he was 12 years old, wrote down all of the qualities that he admired in other people and all the qualities he found objectionable. And he looked at that list and there wasn’t anything about being able to run the 100 yard dash in 9.6 or jumping 7 feet. They were all things that were simply a matter of deciding whether you were going to be that kind of person or not.”

The lesson of Warren Buffett: Warren has been incredibly proactive throughout his life at forming the qualities of character that he admires. He doesn’t do things he doesn’t want to do. He says no. He integrates. He experiments. He makes time for himself, his family and friends. He does what he loves. He operates in a web of trust. Potentially most instructive though he wasn’t always a personal success. Warren’s life is fascinating to study because he has continually improved.