What Warren Buffett Can Teach You About Leading A Tech Company
Steve Taplin is the CEO and cofounder of Sonatafy Technology, providing experienced nearshore software developers and engineers.
Some people seem to be born leaders. Others struggle to get people to follow them, regardless of their knowledge and competence. I am often asked by up-and-coming managers at my company what it takes to get to the CEO spot. I always give the same reply. Listen to the words of Warren Buffett.
Buffett passionately believes that success comes from identifying and excelling at a few critical activities rather than spreading yourself thin and that good leaders are willing to learn from their mistakes. That is something he teaches both for general business and for leadership.
In fact, he once famously said: “You only have to do very few things right in your life so long as you don’t do too many things wrong.”
It is simple advice, yet so few leaders live by it. It is all too easy to let ego get in the way as a manager.
The Difference Between A Great Leader And A Bad One
When Buffett was recruiting for his own businesses, the people he would choose for leadership positions were those he considered trustworthy. Buffett once wrote a letter to his shareholders stating: “After some other mistakes, I learned to go into business only with people whom I like, trust, and admire.” He also noted, “We’ve never succeeded in making a good deal with a bad person.”
Buffett has several qualities that he looks for in the people he is hiring:
• Intelligence.
• Energy.
• Integrity.
Integrity is so important to him that he says he would rather hire someone lazy and dumb than someone without integrity. A highly motivated or intelligent person without integrity can be more damaging to the business. Good leaders are humble and are willing to admit their mistakes.
But what if you are someone honest, reliable and hardworking, but you are struggling as a leader or feeling overwhelmed? Well, it could be that you are missing one other incredibly important attribute. An attribute that Buffett considers to be the hallmark of the highest achievers.
The Ability To Say No
Buffett does not just understand the value of money; he also understands the value of time. His famous quote about the importance of saying no goes: “The difference between successful people and really successful people is that really successful people say no to almost everything.”
When he said those words, Buffett was talking about investments, but the same thing applies to leadership. People pleasers take on every task they are asked to do, which burns them out and leads to them making mistakes.
By learning to say “No” and value your time, you are putting yourself in a position where you can focus on the really important things. You will have more time for yourself and more time to do the few things you do take on correctly. This means fewer mistakes and more successes.
Good Leaders Are Always Learning
When you first graduated with your MBA, you probably felt you could take on the world. But if you think back to that time, you probably realize that you did not know everything. The people at the top of the leadership ladder have decades of experience, and that experience is not just a form of “serving your time” or “waiting your turn.” It is time to learn from their mistakes and the mistakes of others.
Buffett places a lot of value on having the ability to acknowledge, learn from and rectify mistakes. Good leaders not only do that with their own mistakes, but they also create an environment where their teams can do that too.
When you show that you have the ability to admit to your mistakes and focus on moving forward, putting things right, you create an environment where your team feels safe doing that with their work. This reduces the risk of people trying to hide mistakes or sweep them under the rug.
A safe, constructive learning environment leads to happier and more loyal employees—ones you can trust to do their jobs well. This is in the same vein as a piece of advice Buffett picked up from Tom Murphy of Capital Cities Communications: “Don’t hire a dog and try to do the barking.”
This can be condensed to “hire well, manage little.” If you are paying someone to do a job, let them do it. Do not micromanage, and do not let your ego and desire to be hands-on erode your trust in your employees.
A well-run company should operate on a seamless web of deserved trust. If you know you have good people, and you are willing to listen, let them get their jobs done. And if you’re even willing to take correction from them if they say that you have made a mistake, you will build a strong, resilient and productive company.
For The Good Of The Business
Nobody likes to be wrong about things. Making mistakes can be embarrassing, but it is something that happens to everyone. The hallmark of a good leader is the ability to focus on the mission and consider what needs to be done to achieve that mission.
Take mistakes as a learning opportunity. Accept correction with humility and aim to learn something new every time you head into the office or hop onto a call. If you can hold that positive, knowledge-hungry outlook throughout your working career, then you will have the best chance of success as a leader and for your business.
I do not always get it right in my software development business, but I’m proud of the fact that I learn something every day, and my employees trust me.
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