Working for Warren Buffett isn’t just about reporting to a fun-loving billionaire who loves soft drinks and ice cream. Rather, it’s about having a career where the boss gives you the one thing you really need to be successful: time to do the job.
“I would say that we might very well free up at least 20% of the time of a CEO in the normal public,” Buffett said at this year’s Berkshire Hathaway shareholder meeting. “In terms of meeting with analysts, and the calls, and dealing with banks, and all kinds of things… we relieve them of [that] so that they can spend all of their time figuring out the best way to run their business.”
At Berkshire’s meeting, a shareholder questioned the value that Buffett and vice chairman Charlie Munger brought to the subsidiaries, especially since they practice “delegation short of abdication.”
Buffett made an argument that his hands-off style adds significant value.
“[I] would argue that abdication actually, in many cases, will enable those businesses to be run better than they would if they were part of the S&P 500 and the target, perhaps, of activists, or somebody that wants to get some kind of a jiggle in the short term,” Buffett said.
And this isn’t just about CEOs of Berkshire subsidiaries. Even at Berkshire Hathaway’s corporate offices, there are very few meetings or phone calls interrupting the workflow. Buffett’s investment deputies, Ted Weschler and Todd Combs, told Yahoo Finance’s editor-in-chief that they spend most of their days reading, which is critical for professionals in the business of buying companies. Combs said that Buffett has done “a great job of removing all the friction costs.”
“There’s very, very few interruptions,” Combs said.
The Berkshire Hathaway (BRK-A, BRK-B) empire consists of businesses such as See’s Candies, Benjamin Moore Paints, Fruit of the Loom, Borsheim’s Fine Jewelry, Brooks Sports, BNSF Railway, GEICO, NetJets, and The Pampered Chef just to name a few.
“We certainly don’t add to value by calling them up and saying that we’ve developed a better system for turning out additives at Lubrizol or running GEICO better than Tony Nicely can run it or anything of the sort,” Buffett said.
Of course, a precursor to all of this is employing great people. Buffett regularly emphasizes that he seeks companies that already have great management in place. Beyond that, it’s about giving people time to succeed.
Julia La Roche is a finance reporter at Yahoo Finance. Follow her on Twitter.