Warren Buffett is among the top most successful and influential people in today’s world. Warren Buffett is an investor a philanthropist as well as one of the richest and most respected individuals in the world. He is currently the C.E.O of Berkshire Hathaway Inc. As of 2016, Warren Buffett has a net worth of $66.7 Billion; he is the second richest man in America as well as the 4th richest man in the world (Hagstrong, 2016). Buffett was always a bright child from an early age. He had an inbuilt thirst for business, and his early life shows just how determined he was to make it in the world of business. Warren Buffett showed a keen interest in business when he was still in his early teens. He had a knack for numbers, and that made him a guru in mathematics. He possessed a unique talent of accurately calculating large numbers in his head (Warren Buffett, 2016). This made him a respected individual in his class. Buffett took an early interest in stock markets, as a schoolboy, he often spent time in a regional stock brokerage just near his father’s office. One of his many businesses as a child included; selling Coca-Cola bottles, chewing gum as well as weekly magazines.
During his high school years, Buffett saw a potential business venture, together with his friend, they purchased an old but functioning pinball machine for $25 and set it up in one of the many barber shops in his hometown (Hagstrong, 2016). Within a couple of months, business was booming; it is then that they decide to purchase three other machines and set them up in 3 different barber shops. The business was later sold to a war veteran for $1,200. At the age of 20, Buffet had a saved up some cash amounting to $9,800. During this period is when he met with Lorimer Davidson, the vice president GEICO Insurance, who would later become one of his long-time friends after Buffett left a lasting impression. During that meeting, the two discussed indulged in a discussion about insurance for hours on end. Buffett later returned to his hometown and took a job as a stockbroker at the same time taking a public speaking course lectured by Dale Carnegie. It was during this time that he gained the title Wizard of Omaha (Hom, 2013).
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Warren Buffett is a true example of a great leader. In order for an individual to attain such vast amount of wealth requires a smart workforce. And to lead such a smart workforce requires a leader with an in-depth knowledge of leadership skills necessary in leading the workforce. Buffett has without a doubt portrayed that he has the skills needed and with times has earned the title of a leader. His work so far speaks for itself. His annual letters to the shareholders reflect on just how he has perfected the art of leadership. His letters contain words full of grace and wisdom (Truesdell, 2011). In order to be as great, powerful and successful as Warren Buffett, one needs to have proper leadership skills. This is because being the chief executive of such a large corporation the employees needed a leader. Warren Buffett knew just that. So many different people all over the world consider him a role model. Not only for his philanthropic ways but also because he started his journey at a very young age and that over the years, he has nurtured his leadership skill. He is now offering tips on how to be an effective leader.
The Leadership Challenge, a book by James M Kouzes and Barry Z Posner serves as a leaders resource, be it a university student or a Chief Executive Officer of a fortune 500 company (Truesdell, 2011). Kouzes and Posner’s book contains a series of chapters that help clarify their suggested “five practises of exemplary leadership.” The book was written in order to assist leaders in engaging in these practices. This will help them strengthen their leadership skills as well as abilities. According to Truesdell (2011), these five practises include “model the way, inspire a shared vision, challenge the process, enable others to act and encourage the heart” (2011)
These practices are described, not as constituents of a leader's disposition but rather as behaviours that are existing in any individual who shows a commitment in practising them (Truesdell, 2011). Becoming an effective leader is a learning process, anyone can lead, but not can do it effectively and in the right way.
Model the Way
Practising the “model of the way” entails clarifying values as well as setting examples for your followers. In order to do this, the author suggests that an individual must find his/her voice and affirm shared values. If an individual fails to find his/her voice, Kouzes and Posner say they may end up being a reflection of someone else thus never gaining the integrity they need to lead (p. 49). Warren Buffett’s sentiments also echo the same thing. According to him, he had a hard time making speeches back when he was young. It was so bad that he had to enrol himself in a public speaking course in order to overcome this fear. He understood the power of clear communication skills, thus needed to do whatever possible to gain this attribute. One cannot be a leader if they are shy of making speeches that involve standing over huge crowds. Proper leadership cannot be done under the shadows. People need to see who is leader them; they need to hear him speak, state out his views as well as provide a clear path for others to follow (Truesdell, 2011). Shared values help in promoting loyalty; teamwork as well provides a strong sense of what needs to be done in order to realize the set objectives. In order for leaders to set proper examples, the personification of shared values is paramount. Some of the important aspects of leadership are to ensure that whatever you say or do align with the way you act. An individual can only be a leader if they practise what they preach. Their words need to mean something in order for them to be effective. A leader who is only words but no action can never be taken seriously. Thus, the workforce may not be committed to the job as expected.
Inspire a Shared Vision
According to the author, in order to envision the future, it is important for a leader to visualise his/her team’s possibilities as well as finding common ground. This helps in realising where they have come from as well as where they are heading. In order to properly move forward, a glimpse of the past occurrences needs to be consulted in order to project a clear path for the future. Putting into consideration the nature of one’s role as a leader, one may need to put his/her focus on the future. This can be done by finding a common ground formed by effectively listening to others, as a leader it is then your responsibility to sift out what is important for your team. Only then is true leadership portrayed (Truesdell, 2011).
Buffett has inspired his workforce into building a multibillion-dollar company, and it is still growing. Thanks to his steadfast thinking as well as analysing each and every opinion laid out to him, he has successfully created a name for himself. He had a vision and through the recruitment of a reliable workforce and displaying proper leadership skills, he created a multibillion-dollar company. In order for the vision to be animated, leaders must fully fathom how their workforce’s interests, as well as aspirations, are properly aligned with theirs. The leaders who show their humane side in terms of expressing their emotions as well as speaking from the heart are the only ones who can accomplish this. Being open and true also goes a long way in helping inspire a shared vision (Morison et al., 2013).
Challenge the Process
Challenge the Process entails looking for opportunities as well as experimenting and taking risks (Byrne & Rees, 2006). According to Warren Buffett’s leadership skill, he believed that in order to learn, one had to take risks at some point in time. His journey to where he is now was not that smooth. He admits to making a lot of mistakes, but through the mistakes came to a learning process, which helped him to become the man he is today. Leaders must learn how to seize the initiative as well as practise outright leadership in order to search for opportunities. Their group must be permitted to communicate freely with the outside world. Limiting such communications may result in a lack of new ideas being formulated. In order for the team to be improved, Kouzes and Posner stipulate that leaders need to facilitate an environment whereby experiments and risk-taking are encouraged. This will create a good environment for trial and error thus giving the workforce confidence to try out new ideas (Shoemaker et al., 2013). It is crucial for leaders to understand that failure is often attributed as an invaluable component of success and that in order to progress, they must learn from both their workforce’s failures and successes.
Enabling others to Act
Creating a climate of trust between the leaders and the workforce is paramount to the success of any company. Without trust among the workforce, it is very difficult for a team to realise maximum potential. Trust is considered to be contagious therefore if the leader portrays such an attribute towards his/her team members, others will definitely follow suit. Face to face communication can positively facilitate relationships as well as encourage teamwork on projects. The enhancement of self-determination, as well as competence development, goes a long way in strengthening others. In order for self-determination to be enhanced, leaders must fathom that great power is derived from giving power away (p. 251). Buffett shares the same sentiments; he believes that in order for a company to prosper greatly, its leader needs to give power to its workforce and trust that they will do what is needed of them. That is called trust, a crucial component in a company’s success.
Encouraging the Heart
This final leadership skill encompasses the last commitments. Recognizing contributions include executing the best result from one’s workforce as well as implementing personalized recognition. When a leader displays very high expectations, it automatically portrays that he/she believes in their abilities of his/her workgroup. This, in turn, increases the chances of the team doing an exemplary job (p 282). Encouraging feedback creates a sense of value among the team members, thus their commitment to the task at hand increases. Giving personalized recognition shows that you fathom each and every individual contribution and that you appreciate their commitment and hard work. As a leader, it is vital that you understand as well as notice when employees are giving it their all. This assures them that their hard work did not go unnoticed; this creates a positive impact on the team and thus motivates them to do even more (Ciulla, 2013).
Creating a community spirit can effectively do celebrating both, the values as well as victories of the team; this can be effective if the leader himself is personally involved. Warren Buffett always took the time to compliment his workers when he felt they were doing everything in their power to obtain a positive result. His policy was always simple, to treat others the same way you would want to be treated. One of his letters addressed to the investors; Buffett once praised his managers for a successful year. He did not just address them in general; he mentioned the individuals by name. He even went, as far praising a former secretary who was the organizer of the company’s annual meetings (Truesdell, 2011). This just goes to show how humble and understanding Warren Buffett is. A leader should never judge or discriminate; every individual deserves praise when he/she has delivered exemplary work no matter his or her rank or status. Such public display of recognition for a team member by the leader helps people reminisce why they are part and parcel of the organisation. A constant celebration of accomplishments gives them the feeling you value their commitment to the task. Such appraisals go a long way in keeping the workforce dedicated to their work. When a leader is personally involved, it portrays a sense of care and respect for them, which in turn enhances the leader’s credibility.
References
Schoemaker, P. J., Krupp, S., & Howland, S. (2013). Strategic leadership: The essential skills. Harvard business review, 91 (1), 131-134.
Morison, S., & McMullan, C. (2013). Preparing for the future : challenges and opportunities for management and leadership skills. British dental journal , 214 (1), E2-E2.
Warren Buffett. (2016). The Famous People website. Retrieved from //www.thefamouspeople.com/profiles/warren-edward-buffett-3160.php .
Hagstrong, G., R. (2016). The Warren Buffett Way. Retrieved from http://eu.wiley.com/wileyCDA/section/id-817934.html
Hom, J., E. (2013). “Warren Buffett Biography”. Business news daily contributor. Retrieved from http://businessnewsdaily.com/4211-business-profile-warren-buffett.html
Ciulla, J. B. (2013). Leadership ethics . New York: Blackwell Publishing Ltd.
Kouzes, J. M., & Posner, B. Z. (2007). The Leadership Challenge: The no-fads, heart-of-thematter facts you need to know. (4th ed. ). San Francisco, CA: Jossey-Bass
Truesdell, C. (2011). The leadership Challenge Review . Retrieved from https://nclp.umd.edu/resources/bookreviews/BookReview-The%20_Leadership_Challenge-Truesdell-2011.pdf
Byrne, J. C., & Rees, R. T. (2006). The successful leadership development program: How to build it and how to keep it going . San Francisco, CA: Pfeiffer.
