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What makes people want to work for Buffett?


Cevian
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Just wanted to start a general discussion on, in my opinion, one of Buffett's strongest Assets. There are so many investment books out there trying to teach people how to "invest like Warren Buffett" but I don't see many addressing the question of why people work for Buffett in the first place. Prem also has this similar draw.

 

I see two categories of individuals that perplex me:

 

Category 1: Wealthy individuals who sell their business to Buffett and then remain and work even harder after the fact. This is usually very uncommon in practice since individuals who have built their business and decide to sell, then to want to be done with the business and will definitely not work harder post-sale.

 

Category 2: Top performers who have intelligence, integrity and energy but decide to work for Buffett as opposed to going out on their own. Again I have seen this to be uncommon, especially with the newer generation who doesn't want to work for anyone but themselves.

 

Does anyone have any valuable insight as to why these two categories of people work for Buffett as opposed to the alternative?

 

 

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cevian,

 

in regards to Cat 1. I think you are making assumptions here, typically sellers sell because they want to be done with the biz. But i believe in this case that is probably not the case. I imagine it is more like 1)  liquidity 2) under a large umbrella were you can concentrate on doing what you love, running the biz vs deally with all the outside crap. selling to brk gives you both 1 and 2.

 

as for cat 2 I'll let other answer

 

hy

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Category 2: Top performers who have intelligence, integrity and energy but decide to work for Buffett as opposed to going out on their own. Again I have seen this to be uncommon, especially with the newer generation who doesn't want to work for anyone but themselves.

 

Can't comment on 1. It mostly perplexes me too (which means that I am definitely not sell-my-business-to-Berkshire material :) )

 

Regarding 2, I understand it more. There are people who like to be a part of larger whole and/or don't want to spend their time on things Buffett takes care of: publicity, marketing, public appearances, etc. Not everyone wants to be top dog even if they have intelligence/integrity/energy, etc. Of course, every situation is different: someone like Todd and Ted might be fine with publicity, marketing, public appearances, but want to be a part of Berkshire for other reasons.

 

Also when you say "uncommon", you have to realize that there is a pool of millions of smart people and only one Berkshire. So the fact that 20-100 of these people go to work for Buffett is not that amazing. I am sure even Sardar Biglari can find 10 or so great people who would like his mojo and would work for him. ;)

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I think there are multiple reasons, but the most important one imo is because he is very bright at allocating capital.

Generally, people are not. Even very successful people who excel in their field of endeavor. And when they meet someone who is as capable as Buffett at allocating capital, they gladly follow him/her.

Furthermore, Buffett is intelligent enough to give them complete freedom in whatever they do best, he says: do whatever you feel is right to achieve great results, then when it comes to capital allocation just leave it to me.

Why not?

 

Cheers,

 

Gio

 

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Guest longinvestor

cevian,

 

........under a large umbrella were you can concentrate on doing what you love, running the biz vs deally with all the outside crap....,

hy

+1

Thanks to the OP for this thread.

 

"Outside crap". There is so much of this shit that original business owner-operators have carefully kept out of the businesses in their entire lifetime that they don't want to change past their own lifetime. They just simply find enough common cause with WEB's Berkshire system. And the contrary is so pervasive all around us, yet for these OO's, Berkshire is the home of choice. What's amazing is that the alternative exit strategies pay instantly and pay big, often far more than BRK; At least at the outset.  To shun this instant gratification is nothing short of stunning.

 

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The HR theory I learned in business school teaches that there are 4 drivers of employee motivation.  They are the drive to Acquire, Bond, Comprehend, and Defend.  Do a google search and you can read all about them.

 

Obviously the drive to acquire is generally not an issue, but Bond (belong), Comprehend (challenge), and Defend (security) are all important aspects to what is driving Buffett's top performers.  Few companies are good at offering the later three drives and people will generally work at companies for less money where those are met.  Southwest airlines is perhaps the best example.  Money isn't everything, and if you can provide a workplace that helps employees meet their needs, self actualization will follow. 

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