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The Warren Buffett CEO: Secrets of the Berkshire Hathaway Managers
"Everyone knows Warren is the greatest investor of our time. . . .This book for the first time captures his genius as a manager."
― Jack Welch The first book to reveal the investment and management strategies of the Berkshire Hathaway all-star management team. Much has been written about Warren Buffett and his investment philosophy; little has been made public about the inside management of Berkshire Hathaway. With a market cap exceeding 100 billion , Berkshire Hathaway has a market value surpassing many icons of American business such as Dell, AT&T, Disney, Ford, Gillette, American Express, and GM. Drawing on his personal experiences as well as those of Berkshire's chief executives, officers, and directors interviewed for this book, Berkshire insider Robert P. Miles provides a unique look at the Berkshire Hathaway culture and its management principles.
― Jack Welch The first book to reveal the investment and management strategies of the Berkshire Hathaway all-star management team. Much has been written about Warren Buffett and his investment philosophy; little has been made public about the inside management of Berkshire Hathaway. With a market cap exceeding 100 billion , Berkshire Hathaway has a market value surpassing many icons of American business such as Dell, AT&T, Disney, Ford, Gillette, American Express, and GM. Drawing on his personal experiences as well as those of Berkshire's chief executives, officers, and directors interviewed for this book, Berkshire insider Robert P. Miles provides a unique look at the Berkshire Hathaway culture and its management principles.
412 pages, Hardcover
First published October 15, 2001
About the author
Robert P. Miles
12 books5 followersRobert P. Miles is a professional speaker, author, and acclaimed Warren Buffett expert. Pursued by renowned journalists and media moguls on just about each and every move that Mr. Buffett makes, Robert has had the great honor of getting to know Warren Buffett, the man and the remarkable wealth-building strategist.
As the writer of the top-selling books 101 Reasons to Own the World's Greatest Investment: Warren Buffett's Berkshire Hathaway and The Warren Buffett CEO: Secrets from the Berkshire Hathaway Managers, Robert has relentlessly followed his passion and found great success in doing so. Known for his subtle wit and entertaining stories, he has shared his valuable insights, strategies, philosophies, and anecdotes with enthusiastic audiences throughout North America. His keynote address, Reflections of a Billionaire CEO: How to See "You" in the Image, has been heard in over 12 countries throughout the world.
As the writer of the top-selling books 101 Reasons to Own the World's Greatest Investment: Warren Buffett's Berkshire Hathaway and The Warren Buffett CEO: Secrets from the Berkshire Hathaway Managers, Robert has relentlessly followed his passion and found great success in doing so. Known for his subtle wit and entertaining stories, he has shared his valuable insights, strategies, philosophies, and anecdotes with enthusiastic audiences throughout North America. His keynote address, Reflections of a Billionaire CEO: How to See "You" in the Image, has been heard in over 12 countries throughout the world.
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Displaying 1 - 21 of 21 reviews
October 25, 2023
This was not a great book, because Miles is an unabashed Berkshire fanboy. The chapters quickly take on a repetitive feel — the first parts are always about the history of the business and the manager, but quickly give way to a lot of backslapping and gushing about Buffett and the awesomeness of being a part of Berkshire. That isn’t to say that Buffett and Berkshire aren’t great, but all the backslapping gets old after maybe five chapters.
I’m giving the book three stars because it’s still useful. I think three things stand out:
First, there aren’t that many books that profile Berkshire’s managers. You’re kinda stuck with this one, since so many of the CEOs are such low profile individuals.
Second, Buffett has a more fluid view of moats than I expected. If the business has good financials, is a leader in its market (by some definition of market) and is run by a top tier team, Buffett is perfectly happy to buy the company, even if its moats are mediocre (but still existent!). This was a surprise! Buffett essentially assumes that a top tier operational team that has been in charge of the business for decades is likely to maintain a small but meaningful competitive advantage in its (admittedly mature) market, even without structural advantages. And when he misjudges the management, he is basically stuck with the company, since his reputation is that he rarely meddles with management.
(To his credit, Buffett has only made this mistake ... twice? Not very often, for sure.)
Third, the book is useful as a source of clues as to how Buffett runs Berkshire in a decentralised manner. The real trick is to a) align incentives so that individual managers are incentivised to pass on excess cash to HQ; their bonuses are tied to ROIC, not pure growth. (Which also means they are incentivised to keep capital within the business, if they think they can generate more returns that way). Money may be borrowed from the HQ, but with an internal interest rate. Miles doesn’t mention how this interest rate is set (presumably equivalent to the risk-free rate? I don’t know. Update 2023: I realise they’ve talked about this in their annual shareholder meetings multiple times over the years: it’s 15-20% depending on the situation, and always custom to the specific ask).
Berkshire’s incentive system is helped by the fact that b) Buffett ensures that most owner-management teams keep 20% of the business; Berkshire owns 80% when dealing with family-owned businesses. It is also interesting that c) Buffett prefers to use cash to pay for companies, instead of Berkshire stock, even though stock purchases defer taxes for the seller. But d) when there is stock ownership as part of incentives, Berkshire gets managers to buy stock at market prices and never issues an option plan, for (and Munger and Buffett’s views on this are well known) option pools tend to be a hidden cost to shareholders. Finally, e) there are zero synergies between Berkshire subsidiaries — because (or so Buffett+Munger say) they’re too difficult to do. Miles notes that various CEOs he’s interviewed have reached out to the others within the conglomerate to talk and learn, but none have done anything substantive together.
I’m giving the book three stars because it’s still useful. I think three things stand out:
First, there aren’t that many books that profile Berkshire’s managers. You’re kinda stuck with this one, since so many of the CEOs are such low profile individuals.
Second, Buffett has a more fluid view of moats than I expected. If the business has good financials, is a leader in its market (by some definition of market) and is run by a top tier team, Buffett is perfectly happy to buy the company, even if its moats are mediocre (but still existent!). This was a surprise! Buffett essentially assumes that a top tier operational team that has been in charge of the business for decades is likely to maintain a small but meaningful competitive advantage in its (admittedly mature) market, even without structural advantages. And when he misjudges the management, he is basically stuck with the company, since his reputation is that he rarely meddles with management.
(To his credit, Buffett has only made this mistake ... twice? Not very often, for sure.)
Third, the book is useful as a source of clues as to how Buffett runs Berkshire in a decentralised manner. The real trick is to a) align incentives so that individual managers are incentivised to pass on excess cash to HQ; their bonuses are tied to ROIC, not pure growth. (Which also means they are incentivised to keep capital within the business, if they think they can generate more returns that way). Money may be borrowed from the HQ, but with an internal interest rate. Miles doesn’t mention how this interest rate is set (presumably equivalent to the risk-free rate? I don’t know. Update 2023: I realise they’ve talked about this in their annual shareholder meetings multiple times over the years: it’s 15-20% depending on the situation, and always custom to the specific ask).
Berkshire’s incentive system is helped by the fact that b) Buffett ensures that most owner-management teams keep 20% of the business; Berkshire owns 80% when dealing with family-owned businesses. It is also interesting that c) Buffett prefers to use cash to pay for companies, instead of Berkshire stock, even though stock purchases defer taxes for the seller. But d) when there is stock ownership as part of incentives, Berkshire gets managers to buy stock at market prices and never issues an option plan, for (and Munger and Buffett’s views on this are well known) option pools tend to be a hidden cost to shareholders. Finally, e) there are zero synergies between Berkshire subsidiaries — because (or so Buffett+Munger say) they’re too difficult to do. Miles notes that various CEOs he’s interviewed have reached out to the others within the conglomerate to talk and learn, but none have done anything substantive together.
July 15, 2008
In my opinion, this is a must read for any aspiring CEO, future business tycoon, investor or anyone interested in what makes successful businesses. The book profiles a small sub-section of the business leaders from some of the companies that Buffet, by way of his company Berkshire Hathaway acquired through the years. Don't believe me? Ok how about Warren himself: Warren Buffett's Recommended-Reading List (And no, he didn't write, or conceive this book, he just endorses it).
In this text, you get to hear from owners of well known giant's such as The Washington Post or Geico, down to lesser known 'little' Omaha natives like Nebraska Furniture Mart. From each of the CEO's you get a small bit of insight into how Warren values companies and what he deems most important. To me, it seems clear that above many other factors, Warren clearly values:
Honesty
Dedication
Integrity
History
Hard Work
Generosity
And many other key, and essentially obvious core values that you should expect in a friend, partner or manager.
Each manager, after talking a bit about themselves, and their business then talks briefly about Warren, his management style, and what they think of him, and how Berkshire will do once he moves on.
It's refreshing to hear that someone can run and acquire companies the way he does, in short he essentially buys a company, backs them financially and then lets them run it as they always have. If more businesses, and managers of businesses acted this way, I think we'd truly see what business and associates can do.
Some of the common thoughts about Warren from his managers are:
Intelligence
Trustworthiness
Ability to quickly understand a business
Approachability
And many other things you have been cultured to dis-believe possible in a business of such size, and a man of such wealth and power.
Reading this book will give you insights on how to build a business, how to run a business, how to manage and treat associates, and how to find, and eventually invest in other people's business.
This truly is one of the best books I've read in all of those categories.
In this text, you get to hear from owners of well known giant's such as The Washington Post or Geico, down to lesser known 'little' Omaha natives like Nebraska Furniture Mart. From each of the CEO's you get a small bit of insight into how Warren values companies and what he deems most important. To me, it seems clear that above many other factors, Warren clearly values:
Honesty
Dedication
Integrity
History
Hard Work
Generosity
And many other key, and essentially obvious core values that you should expect in a friend, partner or manager.
Each manager, after talking a bit about themselves, and their business then talks briefly about Warren, his management style, and what they think of him, and how Berkshire will do once he moves on.
It's refreshing to hear that someone can run and acquire companies the way he does, in short he essentially buys a company, backs them financially and then lets them run it as they always have. If more businesses, and managers of businesses acted this way, I think we'd truly see what business and associates can do.
Some of the common thoughts about Warren from his managers are:
Intelligence
Trustworthiness
Ability to quickly understand a business
Approachability
And many other things you have been cultured to dis-believe possible in a business of such size, and a man of such wealth and power.
Reading this book will give you insights on how to build a business, how to run a business, how to manage and treat associates, and how to find, and eventually invest in other people's business.
This truly is one of the best books I've read in all of those categories.
December 7, 2009
I love learning through the story of other people. Each chapter in this book was insightful in a different way, and helped demonstrate the values Berkshire is built on.
November 25, 2017
A decent book taking a more nuanced view of CEOs running major companies in the Berkshire Hathaway group. Each chapter devotes to each CEO, as well as Warren Buffet's rationale for making the purchase. The book got a bit repetitive in the latter half of the book, hence the four star. If you're really interested in Warren's investment philosophy, you should watch this HBO documentary-https://www.youtube.com/watch?v=ridk6...
March 4, 2022
If you’re interested in becoming or searching for the qualities in superb management this is a great book for you. My favorite aspect was seeing how Buffett found these men and women and his process of buying and how his analysis was conducted. As an investor looking to always find a company with great management this book had numerous insights. My top three (although their were many) are the following:
1. Prefer family run businesses. Multi generational means the business has been around for a long time and likely has a large moat keeping it running.
2. The Berkshire competitive advantage. Buffett gets first access to many of these companies because many of them are looking to be acquired by someone who will mainly be hands off, allow the company to retain all its employees, want to be long-term oriented rather than slaves to Wall Street.
3. Buffett has very specific qualities he looks for in the management running his acquisitions: integrity, love of their work, values, humility, tenure, owner oriented, motivated, energetic, inquisitiveness, and family oriented are a few that stood out to me.
1. Prefer family run businesses. Multi generational means the business has been around for a long time and likely has a large moat keeping it running.
2. The Berkshire competitive advantage. Buffett gets first access to many of these companies because many of them are looking to be acquired by someone who will mainly be hands off, allow the company to retain all its employees, want to be long-term oriented rather than slaves to Wall Street.
3. Buffett has very specific qualities he looks for in the management running his acquisitions: integrity, love of their work, values, humility, tenure, owner oriented, motivated, energetic, inquisitiveness, and family oriented are a few that stood out to me.
May 5, 2024
I did enjoy this book and thought it was an easy read but I feel like it was bit repetitive in the structure of the interviews and didn’t get to deeper insights into the management challenges of being in an autonomous organization.
June 2, 2019
Insightful book.
December 18, 2019
Waste of time.
August 14, 2020
This didn't quite answer the questions I hoped it would.
November 17, 2020
A deep and thorough analysis of which types of companies and their (business) leaders does the greatest investor, Warren Buffet, select. Anyone reading this book shall emerge a better investor.
Want to read
January 3, 2022Does this biz delights its customers? Is it customer centric?
Does the company have the kind of culture that I want to work in?
https://youtu.be/h89uOvUDVO4
Does the company have the kind of culture that I want to work in?
https://youtu.be/h89uOvUDVO4
February 8, 2022
Outstanding individuals who are led by an extraordinary man.
October 14, 2007
i can't tell it. it's the great book that i ever read.
March 16, 2014
This books makes you look at how you handle business and personal relationships. Great book and I will read it again.
November 6, 2013
It got much better toward the end of the book.
February 2, 2014
Good book and sound advice for life and money.
August 3, 2020
A clinical account of the trusted set of CEOs who make Berkshire Hathway the company it is! The Chapters on Ajit Jain and Charlie Munger make for some riveting reading!
January 18, 2019
Great book about what it is like to work for Mr. Buffett and gives insight into how to be a good manager.
January 3, 2022
เป็นหนังสือการลงทุนเล่มแรก ๆ ในชีวิตที่อ่านจบ ช่วงนั้นพยายามจะศึกษาการลงทุนแบบ value investment เล่มนี้เขียนสนุกดี
May 10, 2018
its great, you come to know about many different personalities from
Read
November 29, 2018一.波克夏資本來源：保險業三大CEO管理原則
1.蓋可保險的Louis Simpson
對於未來的策略就是繼續讓Geico繼續保持成長。單純的策略就是成為提供最佳服務的低成本業者，這自然會讓未來的市占率提高。
如果是個低成本營運業者，自然會提供最佳服務；反過來說，除非你是個長期的低成本業者，否則也不可能提供最佳服務，因為消費者會把兩者視為相同。
2.負責蓋可保險資本配置的Louis Simpson
(1)獨立思考，避開非理性行為與情緒。
(2)投資追求股東利益的高報酬事業。評估企業經營者時，思考下列問題：經營者是否持有公司的明顯股權？是否坦誠對待股東？經營者是否願意放棄不賺錢的業務？
最重要的問題則是經營者是否願利用超額現金買回自家股票？因賺錢事業的經營者經常運用超額現金擴張某些比較不賺錢的業務，很多情況下，剩餘資金運用於購回庫藏股，效率往往最高。
(3)即使是最優異的事業，其投資也只能支付合理價格
(4)長期投資。對於追求股東利益的優質企業，其股票很有機會創造平均水準以上的長期報酬。
(5)投資不可太過分散。買進代表整體市場的眾多股票，非常不可能創造突出的績效。
3.波克夏再保的Ajit Jain
(1)最簡單的決策就是對自己不喜歡的交易說不。最困難的決策則是對自己還在觀望的交易說Yes，因為如果還在觀望就應該說不，但每隔一陣子發現需要去做的種種理由而被捲入，這往往是相當主觀的取捨。
(2)避免發生愚蠢的錯誤，盡可能預先評估較易可能涉及的風險。最糟的情況就是根本沒想到的事情回頭糾纏。
二.三大傳奇創辦人CEO的經營宗旨
1.內布拉斯加家具商場的Rose Blumkin
-顧客優先，讓他們得到真正想要的，他們就會繼續回來。
2.飛安國際公司的A.L. Ueltschi
-必須對於其他東西有貢獻，不要只執著於銀行帳戶。個人所經營的事業必須對於其他人的福利有所貢獻
3.商務客機公司的Richard Santulli
-提供客戶難以抗拒的服務。
=>三人的特色都是讓公司對客戶提供有意義的服務，也就是創造卓越的價值給客戶，然後轉換為自身的卓越經濟價值。
三.波克夏六大家族企業繼承人CEO對於對手的看法
1.內布拉斯加家具商場的繼承人Irvin Blumkin對於未來競爭者的看法是「任何想要再可支配所得分逼杯羹的業者，不一定要來自家具、電器或家用品產業。威脅可能來自旅遊業、汽車經銷商或任何其他大型零售業者，都是潛在競爭對手」
因此他並不把自己侷限在家具零售產業。
2.喬登家具公司的艾略特則說「最大的競爭對手可能不是來自其他家具業者，而是來自販售各種消費產品的業者。汽車、電腦與其他商品，他們在很多方面都比家具更刺激、更具吸引力」
=>兩人對於競爭對手的看法顯示出他們經營的格局，而這策略也才是真正的回到顧客身上去思考。
四.波克夏六大家族企業經理人
賀茲伯格鑽石公司Jeff Comment
「對我來說，生命的意義就是留下成就，我經常告訴我的小孩，人生的意義是『你做了什麼事情讓這個世界變更好？』當你觀察人生想要遺留下來的成就，就能確定自己設定的優先順序是否正確。
。對於我來說，最優先者是信仰，其次是家庭，然後就是我如何對待那些我在人生旅途中曾經遇到的人們。」
五.Buffet看待波克夏執行長的報酬
(1)資金不是免費。當旗下企業使用大量資本投資時，波克夏會對其額外使用的資本收取較高的成本，而釋放出來的資本也同樣可以認列較高的績效，紅利計算是對等的。
(2)所有的薪酬方案，所謂的利益一致，是要同時涵蓋上檔和下檔，而不只是賺錢的時候。
1.蓋可保險的Louis Simpson
對於未來的策略就是繼續讓Geico繼續保持成長。單純的策略就是成為提供最佳服務的低成本業者，這自然會讓未來的市占率提高。
如果是個低成本營運業者，自然會提供最佳服務；反過來說，除非你是個長期的低成本業者，否則也不可能提供最佳服務，因為消費者會把兩者視為相同。
2.負責蓋可保險資本配置的Louis Simpson
(1)獨立思考，避開非理性行為與情緒。
(2)投資追求股東利益的高報酬事業。評估企業經營者時，思考下列問題：經營者是否持有公司的明顯股權？是否坦誠對待股東？經營者是否願意放棄不賺錢的業務？
最重要的問題則是經營者是否願利用超額現金買回自家股票？因賺錢事業的經營者經常運用超額現金擴張某些比較不賺錢的業務，很多情況下，剩餘資金運用於購回庫藏股，效率往往最高。
(3)即使是最優異的事業，其投資也只能支付合理價格
(4)長期投資。對於追求股東利益的優質企業，其股票很有機會創造平均水準以上的長期報酬。
(5)投資不可太過分散。買進代表整體市場的眾多股票，非常不可能創造突出的績效。
3.波克夏再保的Ajit Jain
(1)最簡單的決策就是對自己不喜歡的交易說不。最困難的決策則是對自己還在觀望的交易說Yes，因為如果還在觀望就應該說不，但每隔一陣子發現需要去做的種種理由而被捲入，這往往是相當主觀的取捨。
(2)避免發生愚蠢的錯誤，盡可能預先評估較易可能涉及的風險。最糟的情況就是根本沒想到的事情回頭糾纏。
二.三大傳奇創辦人CEO的經營宗旨
1.內布拉斯加家具商場的Rose Blumkin
-顧客優先，讓他們得到真正想要的，他們就會繼續回來。
2.飛安國際公司的A.L. Ueltschi
-必須對於其他東西有貢獻，不要只執著於銀行帳戶。個人所經營的事業必須對於其他人的福利有所貢獻
3.商務客機公司的Richard Santulli
-提供客戶難以抗拒的服務。
=>三人的特色都是讓公司對客戶提供有意義的服務，也就是創造卓越的價值給客戶，然後轉換為自身的卓越經濟價值。
三.波克夏六大家族企業繼承人CEO對於對手的看法
1.內布拉斯加家具商場的繼承人Irvin Blumkin對於未來競爭者的看法是「任何想要再可支配所得分逼杯羹的業者，不一定要來自家具、電器或家用品產業。威脅可能來自旅遊業、汽車經銷商或任何其他大型零售業者，都是潛在競爭對手」
因此他並不把自己侷限在家具零售產業。
2.喬登家具公司的艾略特則說「最大的競爭對手可能不是來自其他家具業者，而是來自販售各種消費產品的業者。汽車、電腦與其他商品，他們在很多方面都比家具更刺激、更具吸引力」
=>兩人對於競爭對手的看法顯示出他們經營的格局，而這策略也才是真正的回到顧客身上去思考。
四.波克夏六大家族企業經理人
賀茲伯格鑽石公司Jeff Comment
「對我來說，生命的意義就是留下成就，我經常告訴我的小孩，人生的意義是『你做了什麼事情讓這個世界變更好？』當你觀察人生想要遺留下來的成就，就能確定自己設定的優先順序是否正確。
。對於我來說，最優先者是信仰，其次是家庭，然後就是我如何對待那些我在人生旅途中曾經遇到的人們。」
五.Buffet看待波克夏執行長的報酬
(1)資金不是免費。當旗下企業使用大量資本投資時，波克夏會對其額外使用的資本收取較高的成本，而釋放出來的資本也同樣可以認列較高的績效，紅利計算是對等的。
(2)所有的薪酬方案，所謂的利益一致，是要同時涵蓋上檔和下檔，而不只是賺錢的時候。
Displaying 1 - 21 of 21 reviews