When making an acquisition, what does Warren Buffett, widely considered the world’s most successful investor, want?

Consider the following true story: (We left out the CEO’s name because he told us the story, but we didn’t think to ask him if we could use it on our blog -rookie mistake. {face palm} ) 

A young man once inherited a small struggling retail furniture business. After decades of hard work, the furniture store became a huge regional success with many locations. Warren Buffett tracked this growing business and offered to buy it. The deal included one important agreement: The CEO who had built the company from its early years had to agree to stay on as CEO for several additional years, in spite of the substantial financial benefit he was about to realize. He agreed and the business continued to thrive.

What did Mr. Buffett want in buying the business?

The leader!

(And, of course, positive cash flow.)

Leadership matters to the world’s most successful investor. It should also matter to all top managers who have the responsibility of developing people.

Lominger, Inc., a leadership think tank, studies 67 leadership attributes. “Developing Their People” is rated as the 67th (lowest) attribute in terms of competence of managers nationally. What a sad commentary on our management skills in this great country. We must do better.

So how do you “develop your people”?  You learn how to be a good leader yourself.  Learn how to lead a team, how to juggle management responsibilities, how to do the “business” side of your business (i.e. accounting and financials), and how to make great business decisions!

Once you are a good leader, you can lead your team or business to success.

little tidbit:

Berkshire Hathaway’s (Buffett) central role: 1) motivate chairmen of our companies to work even though they are already very rich and 2) allocate capital.

Read more:

For Buffett fans: a fun quick read at www.Sherlockinvesting.com/ articles/ buffetteers.htm