Warren Buffett Leadership Style

Warren Buffett Leadership Style: Warren Buffett is an investor, philanthropist, and CEO of Berkshire Hathaway, and is known to be one of the richest people on the planet. He is known as one of the most skilled investors of all time. But what are his leadership traits that have created so much success?

Warren Buffett Early Life

Buffett was born in Omaha, Nebraska on August 30th, 1930. As the second oldest child in his family, he had a strong personal interest in money and investing at an early age. Since childhood, Buffett has been able to calculate numbers easily. It’s a talent he possesses to this day – he still doesn’t use a computer or calculator!

As a six-year-old, Buffett bought Coca-Cola bottle packs of six for 25 cents each, and sold the bottles to his friends each for a nickel. Thus, he made a profit of five cents. Buffett had the uncanny interest in making money, and it had led him to a long life of success and money making.

Buffett has over 65 years of experience in investing, and with it, he has become one of the most powerful of leaders in the world. If you have been curious about how he has managed to get to the top and stay there for a long time, we will share with you how he leads by example at Berkshire Hathaway.

Warren Buffett Leadership Style

Buffett’s style of leadership is known as the Laissez-Faire, also known as “delegative leadership”, and this is known to lead to lower productivity levels, but also increases in other resources for employees and teams.

This style of leadership can work with employees who are skilled and motivated, but employees who aren’t as skilled can often fail and miss mandatory deadlines. Buffett in this cases selects workers who are motivated and have great skills, as he depends on results to be made.

The Laissez Faire consists of four key characteristics, they are as follows:

Leaders give employees little hand-holding. They leave workers to experiment and solve problems on their own so that they can figure out things that work and things that do not. This can give workers a better sense of accomplishment.

Leaders also give employees the power to make decisions. Employees don’t ask the leader what should be done, but the employees instead decide for themselves. Employees learn judgment this way, experimenting which decisions are good and which are not-as-good.

While leaders do not intervene with employees’ work, they still provide the resources so that employees are able to make results. Employees are tasked to use what they are given to the best of their abilities. Employees are encouraged to use and conserve resources to the best of their abilities.

And of course, employees are expected to solve problems by themselves. They do not get help from the leader or approval if they have made a good decision.

Is Warren Buffett A Transformational Leader?

Buffett is classified as a transformational leader.

Buffett has had a vision for his business to be successful, and was able to turn that vision into reality. By inspiring his employees to see the same vision and strive towards it, Buffett has been able to grow his business and make it flourish.

When Buffett took over Berkshire Hathaway initially, it had been deemed a failure, but he envisioned the potential in what his new company could have been.

He envisioned the ideal state of the company and set up a goal for the company to eventually get to that state. His transformational philosophies have helped him get Berkshire Hathaway from a failure to a success.

The success of Berkshire Hathaway is an example of why Buffett is an effective transformational leader. Buffett has learned that a CEO should be motivated by the success of a team or company rather than personal success.

How Does Warren Buffett Motivate His Employees?

Warren Buffett has given useful and wise advice for not just his employees but his followers, so that his skills and inspiration can rub off onto others.

Rather than give his employees a list or book of rules, he gives them what are called the “principles of behaviors”.

Instead of basing his employees on rules and judgement, he instead basing on his employees based on how much he can trust them to do a good job. When leaders put trust in employees, they have the chance to flourish.

As Buffett has learned, putting trust in workers without the correct corporate culture to support it can lead to lackluster results. The right culture must be adopted for workers to be productive, successful, and most of all, trustworthy.

As for rewarding team members who do good, he lets each of his team members know that their hard work is appreciated.

Leaders are encouraged to motivate and reward employees, even if it is just through compliments. Motivating employees causes their morale to rise, which in turn helps the company overall. Employees with high morale are happier, meaning they will be more productive.

What Kind of Company Is Berkshire Hathaway?

Berkshire Hathaway is a multinational holding company located in Omaha Nebraska.

The company has been able to grow due to hold controlling interests in numerous companies. The company first started out as a textile company in the 1800s, but today, they fully own numerous companies such as Geico, Fruit of the Loom, Duracell, and Dairy Queen among others.

It also has a part ownership of the Coca-Cola company[KO], Wells Fargo [WFC], Apple [AAPL], Goldman Sachs [GS], Procter & Gamble Co [PG]., and Bank Of America [BAC].

This company was founded by Buffett and had managed to grow dramatically in worth due to his strategies and control.

Berkshire Hathaway is the third largest public company and first largest financial service company on Earth.

With its controlled investment in numerous companies, Berkshire Hathaway has been able to contribute to many different services and products for consumers. These products range from insurance to computers, to food to everything in between.

What Made Warren Buffett A Great Leader?

Firstly, Buffett is an optimistic person, overall. Even as he is aging, he’s giving a noticeably jolly attitude. Optimistic leaders help teams through the struggles of reality and conflict. Buffett has been a leader known to look at positives through insight and statistics rather than what the negative stigma seems like.

Secondly, he mentors his workers so they can easily understand. It’s one thing to be able to trust a leader, but leaders are great when they can help translate tough jargon into words people can quickly comprehend. This is important, especially in the world of finance, where terms are too technical for most people to get behind. Buffett can easily make finance easy to follow for anyone, thus helping make work easier for his employees.

Thirdly, Buffett owns up to his mistakes and does not make excuses. He is not the perfect strategist, and he will openly acknowledge them. This helps employees understand that leaders like Buffett are humans, and that they are not on another level from them. Acknowledging mistakes is a way for leaders and workers to better relate with one another and improve their relationship.

Finally, Buffett assumes different roles in Berkshire Hathaway in order to keep learning and gaining abilities. Even in his late 80s, Buffett always finds opportunities to learn just as must as to teach. Learning is important to Buffett so that he can assist others and perform jobs in any ways that he can, and also encourages others in the company to do the same.

With an incredible history of leading and owning his company, Buffett has created a blueprint for leading for millions of business owners to follow. Buffett has a tremendous legacy of being a good boss just as he has being a good businessman.

---

The author has no position in any of the stocks mentioned. Financhill has a disclosure policy. This post may contain affiliate links or links from our sponsors.