Examining an Icon
I have had the great pleasure of interviewing Lawrence Cunningham, the world’s foremost expert on Warren Buffett. Lawrence is also an exclusive speaker with Gravity Speakers and has authored 3 books on Warren Buffett aside from many other successful books on investing and law. His list of accomplishments is impressive, and he was recently honored with the NACD B. Kenneth West Lifetime Achievement Award. His books have given him a unique perspective on Warren Buffett, Berkshire Hathaway, and the real factors of long-term business success. I really appreciate his ability to extract the principles and mechanics that drive people and outcomes.
The 3 Pillars of Business Success
As I researched his books I recognized a natural flow in his journey to examine, understand, and explain what made Warren Buffett so successful. His initial book focused on the practices and philosophies of Warren Buffett. As he continued his journey and looked at Berkshire Hathaway to contemplate a post-Buffett future, his search took him to a question of leadership vs. culture. What would Berkshire Hathaway do after Warren Buffett is gone, and is company culture enough to replace a great leader? His final book recognized the value and unique traits of Warren Buffett Shareholders and how they played a role in the continued success of both Warren Buffett and Berkshire Hathaway. What he ended up outlining by looking at Warren Buffett, his company, and the shareholders is what I believe are the 3 pillars of business success: leadership, culture, and stakeholders.
Leadership Comes and Goes
Great business leaders come and go leaving behind legacies, products, and brands that stir the imagination. When the impact of the leader is so strong, people want to know what it is that makes them so incredible. This is the case with Warren Buffett. Evan Carmichael does a great Youtube series called, the 10 Rules of Success, where he highlights the principles of top icons.
Lawrence’s first book, The Essays of Warren Buffett, gives you an organized look into the principles and philosophies of Warren Buffett. Lawrence’s unique ability to looking beyond the person and focus instead on formulating and extracting the principles behind success is a passion I share and admire.
Leadership is powerful, and an entire organization can feel the impact of a great leader like Warren Buffett or Steve Jobs. Business leaders are often the face of success for a brand and the obvious place to look for business success formulas, but if you stop at the individual you will miss the other pillars of success. Since leadership can come and go, you simply can’t put all your eggs in one basket and hope that your company will have great leadership or that amazing leadership will stay. Leadership can shape the direction and success of a company but it is only one pillar of business success.
Transferring Leadership to Culture
Culture can be the gas or brakes of an organization. Leadership is powerful, but culture can either amplify that power or diffuse it. As traditional businesses move to digital transformation to take advantage of changing technology, what hinders them the majority of the time is company culture. The world is changing fast and the business environment is as well. To stay agile and to thrive, companies can no longer count on leadership or even technology alone to save them. Business volatility can happen from outside factors or changes in leadership. In Lawrence’s second book, Berkshire Beyond Buffett, Lawrence looks deep into Berkshire Hathaway to see if they can survive and thrive when a great leader leaves. What he found was the DNA of the leader can be transferred and reside in the company culture. If the company actually contains the same core set of values and the talent to exercise those values, then you can insulate against the loss of a great leader.
Turning the Spotlight Into a Floodlight
Great leaders inspire and develop great people. The high bar for organizations is to not only have a great leader but to have an organization so finely in sync from top to bottom that if the leader stepped away you wouldn’t notice. This requires holistic business practices from HR to breaking down silos and communication. Instead of leaders planning for quarterly goals, or possible exits, they need to plan for long-horizon people development and transference of leadership to every part of the organization. The power and influence of great leaders can and should be transferred into the culture for both business agility and continuity.
Delivering Value to Stakeholders
Stakeholders need to be shareholders. The third pillar of business success requires the inclusion and delivery of value to all your stakeholders. This includes customers, vendors, partners, and anyone who comes in contact with your brand. When organizations deliver value to some but not all of their stakeholders they create weaknesses in their organization that reduces their ability for long-term success. Warren always thinks long-horizon when it comes to making decisions. By taking a holistic approach to your business, you ultimately move into big-picture and long-horizon thinking.
Business success is becoming more elusive every day as markets become competitive, change becomes commonplace, and technology creates high-velocity disruption. Lawrence’s 3 books on Buffett take us on a journey from leadership, to culture, to shareholders and make us think about the longevity of greatness. For me, his books outlined a strategy for organizations to take a hard look at their business and consider the strength of their continuity. Whether you are at the top of your industry or you want to get there, mastering these three pillars of business success can take you there.
I appreciate the time I was able to spend with Lawrence and the incredible work he has done studying one of the greatest investors and businessmen of our time. If you want a fresh take on business success and what it takes to get and stay ahead in a world of change, book Lawrence Cunningham to speak at your next event.
Lawrence Cunningham was recently honored with the National Association of Corporate Director’s 2018 Lifetime Achievement award. You can watch his acceptance speech here.