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

Warren Buffett and Secrets of Management - 61

Warren Buffett will only abandon an investment he makes when he knows that he has good managment in place and the business still isn't successful. I remember him saying one time that when good management meets a poor business, the reputation of the business will win out in the end. The original Berkshire (BRK-A) textile company is an example.

What he was saying that great management in some cases can't do anything in a poor business. A poor business could be defined as those offering commodity products or in fading industries.

Now in reference to managing our businesses or departments, we need to keep this principle in mind. We need to ask ourselves concerning what we're doing if it's working. Are we trying to push a product that simply isn't taking and isn't being embraced by consumers. Is the team in place a quality team? How long should we hang on before letting it go?

Many times in business people get stubborn because they have an emotional attachement to something that they simply won't let go of even when everything points to it not going anywhere.

There are times when we simply need to let go of projects and products. To know when and when not to is a key to doing this. I don't think that managers alone should necessarily make this decision. Let the people working on it tell you. Sure the numbers will tell you the story, but there could be things not known to you that could make a difference in whether the project goes on or ends.

If we hold on to projects that aren't working for too long, it can be disheartening to our people when the failure of it stretches out over a long period of time. It's better to cut the strings and let it go, then to keep on pushing something that never has had a chance of making it.

What makes this work is knowing that you have great people working on something that gives you confidence that there's something wrong with what you're working on, rather than your people failing. Don't be afraid to shut down things not working and go on to the next project. Linger too long and it could seriously hurt your business.

Other Buffett Resources:

Wisdom of Warren Buffett

Warren Buffett, investor

Warren Buffett: The trouble with being a legend

Warren Buffett: 'I told you so'

Company growth

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