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The Four States of Warren Buffett

by Alex Malley: It is my belief that the fanfare and fuss surrounding a leader’s achievements often overshadows how they reached and maintained their position at the summit of success…


There is a cult of personality around Warren Buffett, the revered, even fabled chairman and chief executive of Berkshire Hathaway. It is not something he has cultivated, but his billions of dollars no doubt fuel a large measure of interest. If you fall for all the hoopla, you miss the real Warren Buffett – a leader in business and the community virtually without peer.

The tens of thousands of shareholders in his company, attending their annual meeting at CenturyLink Center in Omaha, Nebraska, are not fooled. They all know about what I like to describe as A.I.L.C. – or the four states of Warren Buffett.


People respond to authenticity: they need to know that a leader is everything they seem to be. They recoil from baseless bravado and overblown promise. In today’s society, all leaders are on a watching brief.

So, in our era of suspicion and scepticism, that there is a competitive process for the 30,000 places at the Berkshire Hathaway annual shareholder meeting is clear evidence of Warren Buffett’s genuine, real connection with the people and of the high regard in which he is held.

Executive management and directors tend to approach these meetings as highly scripted and defensive affairs, with questions and answers anticipating every possible shareholder accusation or complaint.

In contrast, Warren Buffett hires an entire stadium and conference centre for three days. There is a steak night at his favourite restaurant, picnics and shopping days. And when it comes to engagement with shareholders, there is six hours of unscripted, nothing off-limits interaction. It is the definition of a positive conversation between management and shareholders. It is a celebration rather than an interrogation. It is interaction at a human level.


When it comes to making the big decisions, some leaders listen to their natural instinct, whereas others ignore it, consistently deferring to advisers or the safest option to steer their decision.

It is obvious that Warren Buffett sits in the former category. Famously he bought his first stock when he was just 11 years old. He also started a newspaper delivery business which allowed him to buy a farm at the age of 14. How is that for natural instinct?

And it has never left him. He has always had an instinct for value and innately known that it comes with time, not in the moment.

He places a premium on tangible value, trusts his instincts and, with enviable patience, stays the course. Not for Warren Buffett the shifting trends and fashions of Wall Street.


One of the biggest lessons in leadership is learning how to let go. This is why recruiting the right people to take with you on your leadership journey is essential. You are looking for authentic, loyal people you can trust and, simply put, that you like being around. Only then can a leader confidently empower their staff with responsibility and delegate decision-making.

Warren Buffett HQ is just 24 people. He has complete trust in operating managers to run the companies in which he buys large stakes. He has worked with his partner Charlie Munger for 54 years. This says a lot about Warren Buffett’s ability to surround himself with people that he believes in.

Empowering staff and delegating decision-making are the hallmarks of great leadership. With confidence and trust comes an ability to invest in your staff, to give them freedom of movement to make their own decisions and accept the risks that come with that.


Real leaders are not takers. For them, success is not about accumulation, it is about how you made your community a better place. How you stimulated positive views, encouraged people to be better and supported those who needed it.

It is clear to me that the essence of Warren Buffett is not money. Whether he is lobbying President Obama to change unfair tax laws that see him paying only 19 per cent tax, when his staff are paying more than 30 per cent, or committing 85 per cent of his fortune to support the lifesaving research and biotechnology work of the Bill and Melinda Gates Foundation, the essence of Warren Buffett is giving back to the community.

So the shareholders of Berkshire Hathaway are not taken in by the fanfare that accompanies one of the world’s richest people. Sure, like him, they are about returns, but they know he is no different now to when he was a boy building his first business. They respect and accept his thinking, and his trust in and his delegation to others.

It appears to me, that money is a by-product of his passion, rather than the core of his focus. Therein lies an extraordinary lesson for those young and ambitious people who are at that stage perhaps of being blinded by “success”. It comes with passion and focus, not from a quick trade.

Old fashioned values of loyalty, decency and trust – so much a part of my grandfather’s era – are worth more today than ever before and I suspect are the true source of Warren Buffett’s wealth.

At a time where the United States appears to live in the moment, when once it had the vision to land on the moon, it prompts me to consider Warren Buffett – not the billionaire, but the man who built a culture that will be his succession plan. He reminds the world, and the United States in particular, that traditional values build hard working and big thinking economies. It is time we paused to reflect on this.

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