He set out to understand everything about both himself and the business he was venturing into before making a move.
The idea of understanding a business we're looking at running, buying or managing within may sound obvious, but in reality, very few take the effort and time to do this before making a decision on what to do.
Usually the reason is they make an emotional rather than rational decision, undercutting their ability and will to look under the hood at what's really there.
While performing due diligence when looking at buying a business should be standard operating procedure for all of us, it's surprising how many people don't think this way when looking at being hired for managing within a company. Even what category of business you enter into has a great impact on your career. Many people wanting to be business leaders don't understand this.
Sometimes choosing the wrong field in business already sets you up for failure, regardless of how good you may be, or potentially may be in leadership.
Buffett has mentioned this in any business. He says great managers in a bad business will eventually take on the reputation of the business they enter into. If you manage a terrible business category, no amount of leadership skills can change the results.
So before making a decision, consider the consequences of that decision. You need to ask yourself questions like: Is the industry a mature industry? What are its long-term prospects? How is it positioned against its competitors? It it a commodity?
When questions like these are researched and answers found, it'll definitely give you some insight into whether you should enter a certain type of business; either as an owner or a manager.
You're entire managment and business career can be decided by this one decision. Don't underestimate its importance. Warren Buffett won't invest in it through Berkshire Hathaway (BRK-A) without knowing the answers to these types of questions, neither should we invest ourselves in a business without knowing the same answers.
Other Buffett Resources:
MSU students have special visit with billionaire Warren Buffett
Sticking to what you know Core businesses
Remember to Sign up for my feed
Sponsored link: The outsourcing every manager requires - Tampa Locksmith
Comment Preview