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

Warren Buffett and Secrets of Management - 42

The recent departure of Robert Nardelli from Home Depot underscores an important insight into the way Warren Buffett regards stockholders, and how he expects his managers to view them.

One of the things he insists upon is for managers to look upon stockholders as partners and not adversaries. I think this is shown clearly with the popularity of his annual meetings. It isn't just that he has so much wisdom to dispense - which he does. It's that he doesn't take himself too seriously and when he's challenged he always responds with a lot of humor that helps to defuse potential difficult situations.

The other side of it is that in starting there, this filters down to his employees and consumers as well.

Nardelli had an extremely difficult time handling things in this way; one of the reasons he left Home Depot. For example, when he conducted annual shareholder meetings, he did it autocratically and many times wouldn't even let some people speak or wouldn't answer questions - simply dismissing them. This infuriated the shareholders.

Of course when you treat people like this in one area, it will also filter down through the company, as others have said happened with Nardelli.

When you consider everyone connected to the business as partners, and not adversaries, the whole tone of the company takes on a certain culture and way of doing things. It is far superior to command-and-control cultures.

We as managers need to understand that a business is like a community that entails and incorporates everyone that has a connection to it. It starts at the bottom and goes all the way up to the top. No one should be considered an adversary within the community that is our businesses. Embracing this attitude will change any business from the top to the bottom.

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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