Warren Buffett and Secrets of Management - 55
An interesting thing that Buffett said a number of times over the years has been that he never looks at the broad stock market when considering investing in a company. Even when he looks at a stock price, other than if it's low enough to invest in, he only sees a business.
Whether you're a manager of an entire company, or a division or unit within a company, there's a way that you look at your area of responsibility.
What is it you 'see' when you look at your company? How do you 'see' it?
What's Buffett saying when he says what he says here? He looks at a company as it stands alone. He doesn't look at it as a part of some type of mythical whole. In other words, he doesn't look at it as part of a sector.
Think of retail. There will always be performers that grow yearly because they're companies that know their purpose and within those confines, are able to improve and grow consistently. Just because you're a retail company doesn't guarantee that you will grow. The same goes for any business sector.
Even with competitors, we still stand or fall as a company that executes its mission and purpose. We need to see our business as a business. It may sound strange, but people get sidetracked on all sorts of things that get them to take their eyes off of who they are and where they're going.
How are we to look at our business? As an entity that stands alone. Even though it's connected to the world at large, it can't be looked upon in that way.
One example with Buffett is his recent announcement about giving billions to the Gates Foundation. Now if he would have looked at Berkshire Hathaway (BRK-A) as a company built to make a lot of money to give to charity, he may not have made it. It was his focus on the purpose of Berkshire that created the wealth that he is now able to give away to profit many.
We must 'see' our company and its purpose without distraction. The rest will come out of that.
Other Buffett Resources:
Warren Buffett: The trouble with being a legend
Warren Buffett: 'I told you so'
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