Warren Buffett’s current exit as CEO of Berkshire Hathaway is being widely known not just for its affect on Wall Avenue but additionally as a masterclass in selfless management. Carolyn Dewar, senior companion and co-leader of McKinsey’s CEO Follow, one of many agency’s vaunted “CEO whisperers” describes Buffett’s handover as “leadership at its most selfless”—a quiet however highly effective lesson for leaders in every single place.
Dewar, who has talked to a whole lot of CEOs and leaders for her function, together with for her just lately co-authored work, A CEO For All Seasons, wrote on LinkedIn that Buffett’s closing letter to Berkshire shareholders is so typical of the person they name the “Oracle of Omaha.” As an example, when he reminds readers that “the cleaning lady is as much a human being as the Chairman,” Dewar writes that it sums up his entire management philosophy. “Decency is not decorative. Respect is what sustains loyalty, trust, and long-term success.”
In dialog with Fortune, Dewar emphasised that Buffett’s exit is itself an instance of management. Buffett’s choice was not solely private however deeply organizational, reflecting the significance of choosing the proper second to make sure a thriving future for Berkshire Hathaway. Leaders should ask themselves whether or not they would choose themselves for the evolving wants of their firm—a not often practiced however essential reflection. “For any leader, really saying from a company point of view … given the kind of skills we’ll need in our next leader, am I the right person to take us on that next journey?”
She additionally referred again to her current ebook, together with analysis on former Intuit CEO Brad Smith, who had impressed her along with his personal succession mindset. He was CEO for 11 years and mentioned succession along with his board 44 occasions: each single quarter. Lots of his deputies went on to achieve success CEOs at different corporations, she mentioned, itself a illustration of Smith’s legacy. She informed Fortune that there was a becoming sports activities metaphor within the succession from one Corridor of Fame quarterback to a different.
The Steve Younger drawback—and alternative
Earlier than Intuit’s Brad Smith stepped down as CEO, he recommended that he and his successor, Sasan Goodarzi, discuss to Steve Younger, who succeeded the enduring Joe Montana because the playcaller for the San Francisco 49ers. “He talked to us about how for part of his first year he tried to be Joe Montana,” Smith informed Dewar. “He grew his hair out like Joe and began to dress like Joe. He even tried to change his throwing mechanics like Joe. And he had the worst half year ever.”
The lesson, Dewar recounted, is that finally, Steve stopped making an attempt to be like Joe and had an incredible profession. “Steve looked right at Sasan and said, ‘You need to be the best Sasan Goodarzi in the world.’” Buffett passing the torch to his longtime deputy Greg Abel reminded her of this, she added. “How do you give the person the confidence and space to be themselves? There’s a reason they were picked, right? They shouldn’t be trying to be their predecessor.”
As Dewar defined, “once it’s clear what that timing is…have you done all the things to get your successor ready?” Buffett’s preparation for Greg Abel as his successor was methodical and beneficiant. Dewar emphasised the distinctive nature of the CEO function and the way efficient leaders create alternatives for potential successors to expertise the scope of govt duty earlier than taking the job. Buffett’s heat public handoff—accompanied by confidence and supportive messaging—not solely impressed belief, however strengthened the worth of organising successors for achievement, permitting the brand new chief to “find their voice and be seen as the CEO” with out interference from predecessors.
The fantastic thing about ‘going quiet’
Dewar was significantly struck by Buffett’s intention to “go quiet for a while.” It is a uncommon and swish transfer amongst iconic leaders, making certain the brand new CEO will get the house to steer authentically: to be Steve Younger, in different phrases. Profitable transitions happen when the outgoing CEO avoids “chipping in from the cheap seats” and helps the brand new chief from a respectful distance, recognizing the necessity to “give the person the confidence and space to be themselves.” Including that she was not near the story straight, she mentioned the present succession at Walmart appeared comparable, with Doug McMillon passing the torch to John Furner, who was in a deputy function similar to Abel.
Dewar added that, regardless that Buffett could also be going quiet and making fewer headlines along with his smart pronouncements going ahead, “he’s done so much writing and going back and reading all of his letters to shareholders, I think is a gift that he’s left behind, that all of us can read and learn from.” Clearly, she added, “whenever there’s an incredible leader, you’re going to miss them. And I think the key for everyone then is to distill, well, what are those lessons learned? What are the things we admire, and how do this next generation of leaders embody that and take it forward in a way that works for them?”
To her level, Buffett’s well-known quotes are legion, practically all of them simpler mentioned than finished. “Rule No. 1 is never lose money. Rule No. 2 is never forget Rule No. 1,” he mentioned in his folksy fashion, a usually deceptively easy quote. One other is to “Be fearful when others are greedy and greedy only when others are fearful.” Lastly, there’s the well-known quote that refers to bubbles as the nice exposer of true buyers and poseurs: “Only when the tide goes out do you discover who’s been swimming naked.”
Dewar mentioned the fourth season in A CEO For All Seasons is “not talked about enough.” What we’re seeing with Walmart and Berkshire Hathaway, she mentioned, is that “how you finish strong not only sets your successor up for success, but it sets the organization up to thrive beyond you. And that should be the goal, that should be the legacy.” She added that “it’s nice to feel like you’re going to be missed, but honestly, your real legacy is when you’ve left the next generation in such a great place that they’re going to do even better than when you were there.”
