“A number of good things happened at Berkshire last year (including $24 billion in net gains), but let’s first get the bad news out of the way.” That’s how Buffett starts his 2012 annual letter to shareholders.
His top three language strategies for success:
1. Start with the bad (and be funny)
2. Point to the executives responsible for business growth (and praise them in a personal, funny, way)
3. Give specific examples (and make them funny)
4. Criticize leaders that focus on the short-term (but make it funny)
Some of the communication and business highlights for Berkshire Hathaway (BH) in 2012:
– BH bought Heinz with Brazilian investor Jorge Paulo Lemann from the Secretary of State Kerry and his wife for $28 billion, with the former CEO of Burger King slated to run it.
– BH flagship insurance companies (the “powerhouse five”) combined earned in excess of $10 billion in pre-tax profits. The Gecko and GEICO (along with CEO Nicely and 27,000 associates) led the way.
– Bolt-on acquisitions resulted in 26 companies integrated into existing businesses for about $2.3 billion.
Buffett always takes pleasure in pointing to the executives responsible for business growth. According to him, BH hit the jackpot with its new investment managers Todd Combs and Ted Weschler, who “left me in the dust”. As a result, each of them received an additional $5 billion to manage.
One of my favorites: “Berkshire’s yearend employment totaled a record 288,462, up 17,604 from last year. Our headquarters crew, however, remained unchanged at 24. No sense going crazy.”
Hilarious and effective.
How do you criticize the fundamental strategies other leaders follow, without looking bad? A masterclass paragraph:
“There was a lot of hand-wringing last year among CEOs who cried “uncertainty” when faced with capital allocation decisions (despite record levels of both earnings and cash). At Berkshire, we don’t share their fears…. Charlie and I love investing large sums in worthwhile projects, whatever the pundits are saying. We instead heed the words from Gary Allen’s new country song: “Every Storm Runs Out of Rain.” … Opportunities abound in America.
“crying uncertainty despite record earnings – invest large in worthy projects – country music – US opportunities”, all in one paragraph – communication masterclass.
He follows it with some advice to his fellow CEOs on thinking long-term: “The risks of being out of the game are huge compared to the risks of being in it”.
And a pinch of sarcasm: “If you are a CEO who has some large, profitable project you are shelving because of short-term worries, call Berkshire. Let us unburden you.”
Irrespective of industry or geography, most executives can learn some communication lessons from the sage of Omaha:
1. Start with the bad (and be funny)
2. Praise your team by name (and be funny)
3. Give specific examples (… and make them fun)
4. Criticize leaders that focus on the short-term (but make it funny)
Business should be fun… Thus, WarrenEnskat’s motto: “Leaders in Mutual Fun(ds)”
I invite you to follow me on twitter @danenskat
(c) Warren Enskat 2013
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