“Don’t hire a dog and try to do the barking." - Warren Buffett
One of the most effective and efficient management philosophies consistently employed is the trust-based, decentralized structure Buffett has famously used for decades. His approach emphasizes hiring competent people, rippling decision-making accountability down in the organization, trusting his leaders, and measuring performance. His goal is to instill an “owner-oriented attitude”.
Buffett’s brand of autonomy leadership has resulted in the Berkshire Hathaway family of firms enjoying less turnover, overall better decisions, stronger performance, and fewer layers of management than their peers on average. The results are fewer mistakes, more loyal people, healthier financials, and happier stockholders. In fact, his company posted $36B in profits last quarter!
Could it work in your environment? Yes. It begins with the leaders.
Whether you lead a large organization, own a startup, work in an environment littered with command-and-control types, or your organization has a large contingent of junior professionals whose decision-making and competency are formative, it can be achieved. Here’s how:
#1. Commitment is key. Leaders across the organization and in the various tiers must buy into this style of leadership. It will be unsettling and uncomfortable for some and a few may leave. That’s ok. For others, this change will be liberating and thrilling – those are your valuable change agents. Tap into their enthusiasm to create a contagion in the org. If yours is a new company or one in which high growth is driving an uptick in hiring, screen for people who demonstrate this style or who are open to it.
#2. Communicate the expectations and support the conditions that reinforce the delegation style. This is not a one-and-done. Depending on your organization, this may require routinely repeating the goals and how people operate for several weeks or even months. Stick with it.
#3. Insist on mentoring and reject the impulse to interfere. Teammates will need guidance, especially in the beginning. Spend time mentoring and coaching, but resist the impulse to make decisions for them or tell them what to do. Remind them they have the capacity and authority to solve their problems and make decisions.
#4. Invest as needed. Whether formal skills training, outside consultants to ignite the change, or other supportive means are necessary to make this a success, invest as necessary. Most of the spend will be early on.
#5. Focus on results. Meet with your leaders regularly to discuss their performance metrics and creatively explore new ideas, options for expansion, improvement, etc. This is where, as a leader, you get a chance to model your own owner orientation and motivate the same in them.
If you are interested in learning more about how to affect this change in your firm, please reach out.
Speaking of dogs...taking the opportunity to show off my sweet duo.