Devoted to Managers and those that seek to improve their management skills

In his annual letter to Berkshire Hathaway shareholders, Warren Buffett gave out his usual advice that was simple, to-the-point and invaluable. This is what he had to say about maintaining a competitive position in the marketplace:

"Every day, in countless ways, the competitive position of each of our businesses grows either weaker or stronger. If we are delighting customers, eliminating unnecessary costs, and improving our products and services, we gain strength. But if we treat customers with indifference or tolerate bloat, our businesses will wither. On a daily basis, the effects of our actions are imperceptible; cumulatively, though, their consequences are enormous."

I want to focus on the last thing he says here, that it is not possible that you can measure effects on a daily basis; that you can't perceive them. Isn't that an interesting comment? Most people by what they write, say that everything must be measured. Is Buffett getting too old to understand the importance of testing and measuring?

It is my thought that we are being socialized into thinking that technology will answer all problems. It's interesting that this particular term isn't used by Buffett. Does that mean that the companies that are owned by Bershire don't use technology? Of course not. What it does mean though is that he understands that it is not the primary factor that motivates customers to do business with you. Anything that is technologically dependent can be copied and put into place rather quickly. That will never be the deciding factor in a successful business.

Even in a small company of a few workers, cumulative effects can have enormous consequences. Why do you think so many small businesses fail? The key according to Buffett is that those things that delight customers, eliminate costs and improve products and services are done on a level that is not easily seen or measured on a daily basis, rather it is those that do the little things well over a long period of time that are the truly successful companies.