Replacing Warren Buffett: Four Things Greg Abel Got Right In His First 10 Minutes
WASHINGTON, DC – OCTOBER 13: Warren Buffett stepped down as CEO and named Greg Abel as his replacement (Photo by Paul Morigi/Getty Images for Fortune/Time Inc)
getty
Greg Abel’s first 10 minutes in the spotlight as Berkshire Hathaway’s new CEO and Warren Buffett’s successor offer a playbook any leader can follow to win trust in a transition.
Abel took to the stage on Saturday to kick off the now legendary annual conference that made Buffett an investing icon. It was the first Berkshire shareholders’ meeting without Buffett taking questions on the main stage.
It wasn’t Abel’s first meeting—he’s been seated next to Buffett for the better part of a decade, walking shareholders through Berkshire’s non-insurance business operations. This time, it was Abel’s first opportunity to build trust and confidence among Berkshire’s hundreds of thousands of shareholders.
Most leaders won’t replace an icon like Warren Buffett. But almost every leader, by definition, will walk into a room as the new person in charge. Abel understood the stakes and knew what he had to do.
In the first t10 minutes of the conference, Abel made four smart moves that provide a template for a high-stakes handoff.
MORE FOR YOU
1. Talk to stakeholders as owners, not observers.
After saying “Good morning,” Abel’s very next sentence made it clear that he’d be adopting Buffett’s philosophy and language. “I want to welcome all our owners,” he said. He even called the gathering “owner’s day.”
Buffett has long reminded shareholders to think of themselves as “long-term owners,” and not traders who go in and out of stocks to make a quick profit. When leaders talk about stakeholders as partners or owners, they’re inviting the audience to play a starring role in the company’s story.
2. Use symbols to honor the past.
Abel surprised Warren Buffett, who was sitting in the audience, by “retiring” a giant jersey with Buffett’s name on the back and the number 60. It was lifted to the rafters alongside Charlie Munger’s jersey with the number 45, representing the number of years the two partners served as Berkshire’s leaders.
They weren’t real jerseys, of course, but the symbolism was clear. Retiring a jersey in sports means no one wears the jersey again. At Berkshire, the jerseys served as a symbol that the Buffett and Munger era will always be honored and never forgotten.
3. Let the legend pass the torch.
In one of the most notable exchanges, Abel introduced Buffett, who, instead of sitting on the stage, was watching from the front row.
Buffett took the microphone and said, “Greg is doing everything I did—and then some. And he’s doing it better in all cases.” He added that the board’s decision to make Abel his replacement was “100 percent successful.”
Buffett didn’t end there. He, in turn, introduced Apple CEO Tim Cook, who recently announced his retirement. First, he explained that, under Cook’s management, Berkshire’s investment in Apple grew from $35 billion to $185 billion. Buffett then reminded the audience that Cook, too, was largely unknown to the broader business community when he replaced another legend, Steve Jobs.
Without saying a word, Abel inherited the trust and confidence Buffett had built with his shareholders. What he did next was all class.
4. Anchor yourself in the company’s values.
Abel didn’t start talking about himself after Buffett’s setup. Instead, he showed a video clip he called the start of “Berkshire’s Anthem.”
The video showed Buffett testifying before Congress in 1991. A scandal had damaged the reputation of one of Berkshire’s financial companies—Salomon Brothers investment bank. Buffett had stepped in as the interim CEO. Even though he wasn’t involved, Buffett apologized to lawmakers and the public. He then delivered the line that Abel said would be Berkshire’s anthem, it’s North Star.
Buffett issued the following directive, aimed at Salomon’s employees: “Lose money for the firm and I will be understanding. Lose a shred of reputation for the firm, and I will be ruthless.”
Once again, without saying it directly, Abel reminded Berkshire’s owners that he would not rewrite the company’s moral code. Instead, he would enforce it.
You might not be following a legend, but you’ll likely step into another person’s story at some point in your career. Build trust, not by rewriting the story, but by embracing its best parts.