The Indispensable Warren Buffett

Is it surprising to anyone when the Wall Street Journal writes: “By many measures, Warren Buffett had a good financial crisis” (“Finding value in Berkshire after Buffett,”10/9/09, Section C1).  No matter the market, Buffett seems to prevail.  Berkshire Hathaway, his company, “didn’t suffer major blows, (and) Mr. Buffett used his vast cash stockpile to scoop up bargains, including a $5 billion investment in Goldman Sachs,” reports the article.  However, “Berkshire shares tumbled in 2008 with the rest of the market, and are up just 4% this year compared with the 12% gain by the Dow Jones Industrial Average.”  So what gives?  Well, could it be that Mr. Buffett is 79 years old?  Such an iconic figure is hard to imagine as replaceable, in my opinion.  However, an expert quoted in the piece thought that Buffett the financial analyst is replaceable, but that his “iconic status isn’t.”  I take issue with this point of view.  There is a reason that Warren Buffett is, well, Warren Buffett.  It is because he has an uncanny knack for dissecting companies, determining their profitability, and knowing when to invest in them.  If others knew how to do this, there would be lots of Warren Buffett’s in the world—but there isn’t. 

            All of this brings me to the topic of leadership.  What kind of leader is Warren Buffett?  This is hard to say.  Unlike Bill Gates, a much younger man who has effectively stepped away from the helm at Microsoft, Mr. Buffett continues to dominate Berkshire Hathaway.  This has investors questioning what the future will be like without him.  “Looming large is the leadership plan,” reports the Journal.  It goes on to say that Mr. Buffett, “continues to hold an iron grip on Berkshire, (and) has kept his succession plan close to the vest.”  Looking at these facts, I think there is reason for concern.  Mr. Buffett will not live forever, but in terms of how he is leading his company, he seems to be acting like it.  I believe that Mr. Buffett should do more prepare his company for that eventual time when it will be without him.