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

Warren Buffett and Secrets of Management - 3

When Buffett assesses a company, one of the chief criteria he uses to measure a company is that the management in place be honest. To me this is one of the most underrated aspects of someone in management. Sometimes you hear it repeated so much that you can be lulled to sleep and be convinced that other things are much more important. That idea is just plain wrong.

Now telling the truth is part of honesty, but honesty entails more than that. Let me mention something about being honest that goes beyond simply telling the truth.

Honesty also involves the ability to see things as they really are. Have you ever worked in a place where upper management is the last to hear the truth about what's really happening in the trenches? So have I ... just about every company that exists.

This has to do with people only reporting the good news, or what news "they" think the boss wants to hear. So honesty involves the ability and insight into getting past the hyped reports and thoughts and seeing things as they really are. To not see things as they are is to be dishonest. Dishonest in that the reality of what's happening doesn't line up with what the company represents or is really at.

It can also be broken down into specific projects or events as well. The way to battle this is to reward openness and honesty on all fronts of the business. The business needs to have a culture of honesty; both in telling the truth, and in seeing things as they really are. If they both don't exist, the business will suffer greatly.

The same goes for management in relationship to their employees. There should never be a holding back of what's really happening in the company. Once things are understood, whether they're positive or negative, get the news out there to your people. They'll hear about it one way or the other. It's better for you to do it so that you can prevent all the ensuing rumors that come if you don't. It will get worse before it gets better if you aren't the one to let important good or bad news out of the bag.

Don't ever underestimate the power of honesty to be a huge differentiator in a company. Few get or do it very well.

Other Buffett Resources:

“Everybody Else is Doing it”

MSU students have special visit with billionaire Warren Buffett

WARREN BUFFETT PHILOSOPHY II

Sticking to what you know - Core businesses

Buffett: Portrait of an Artist as a Young Man