One of the most important things any business leader can do for their business longevity, is to establish the principles by which they and their business will operate.
These principles form the foundation on which trust and relationships are built with all of the stakeholders of the business; shareholders, employees, customers, and suppliers.
Berkshire Hathaway is an example of a highly successful business from pretty much all perspectives. They are a solid company with decades of successful and profitable operations.
In 1983, Warren Buffett established 13 principles that defined how Berkshire Hathaway was to operate. He first published these in what he called Berkshire’s “An Owner’s Manual.” These 13 ideologies are still valid today at Berkshire and followed closely in all the business that they conduct.
Many of these are directly applicable to any business. We can all benefit from reviewing them and perhaps implementing them in our own businesses!
Berkshire’s “An Owners Manual”
I have highlighted seven of the thirteen principles below:
This week’s book summary is Principles by Ray Dalio.
Dalio, founder of Bridgewater Associates, the fifth most important private company in the United States (according to Forbes), does a stellar job in laying out his Personal History (for context), Life Principles, and Work Principles. I highly recommend this book to all business leaders. It is full of great business advice, leadership advice, personal advice, and practical application.
My takeaway from this book are the 16 Work Principles that Dalio describes in detail in the book (listed below for your reference):
Many business leaders overlook leadership lessons from the military because we don’t think they cross the chasm between the harsh realities of war and the world of business.
I would argue that, regardless of the differences in operating environments, the same leadership principles do apply. In fact, the leadership principles tried and tested in the most extreme combat conditions must be applied in the world of business! If business leaders are not leveraging leadership lessons from the military then we are doing ourselves and our organizations a great disservice.
For example, how many times have we seen a power struggle between two mid-level business unit managers while the leader of these managers is too scared or preoccupied to take action to resolve the situation. When the lack of action by the leader allows the squabbling to continue, inevitably the whole business suffers. Morale drops, production and sales fall, customer relations are hurt and eventually the bottom line of the business feels the impact. The inability of a leader to take decisive action to resolve internal strife will damage your business.
This inaction and lack of decisiveness is not tolerated in military leadership. Lack of decisiveness costs lives in combat. Plain and simple.
It seems pretty easy to transfer this lesson from the military arena to the world of business but what about other leadership lessons?
What important principles have you discovered this past year that can make a dramatic impact on your life and business in the future?
I know it can seem cliché at the end of the year to reflect on the past year and set goals for the next year. However, it is critical to our businesses and to each of us individually to stop, take a moment and reflect on the year that has just past and determine the things that have made the biggest impact on us, our business and our family.
- What are those things?
- Have you learned from them?
- Are you making changes in your life or business to leverage these important things?
The book review for this week is The New Gold Standard by Joseph A. Michelli
Michelli provides a very detailed history and study of the Ritz Carlton business. The book documents the culture, business practices and the five leadership principles of the Ritz Carlton;