If you think investing and leadership do not have anything in common, then think again. Warren Buffet, known worldwide as the ‘most successful investor of the 20th century,’ knows a thing or two about how to become a great leader in the business world. He is also one of the richest people in the world, and pledged to donate 99% of his wealth to charity. From selling newspapers at the age of 11 to where he is now at 86-years-old, he’s living proof that sometimes old-school techniques work. Currently, Buffet is in great demand as a speaker educating entrepreneurs on leadership and business. Here are some of the lessons you can take away from the ‘Oracle of Omaha’:
1. Communicate openly and effectively
Buffett is a firm believer that you should always present non-technical, clear thoughts that gets the message across to your peers. He also believes that “If you can’t communicate and talk to other people and get across your ideas, you’re giving up your potential.” Buffett’s intimate knowledge of the business world along with his effective communication skills warrant him his success in the industry.
Terrified of public speaking? You’re not alone. Even successful personalities had to break down those boundaries to be able to achieve success. Buffett had to enroll in a communication course to overcome his fear of speaking in public.
2. Pick your allies wisely
If you believe in the famous idiom ‘Birds of the same feather, flock together,’ then you’re not yet ready to be a mentor just yet. Buffett suggests that you should surround yourself with better people that will inspire you to improve yourself. He said: “It’s better to hang out with people better than you. Pick out associates whose behavior is better than yours and you’ll drift in that direction.”
Zurich-based author and investor Guy Spier paid $650,000 just to have lunch with Buffett. In his article on Marketwatch, he documented how he was utterly inspired by the extraordinary entrepreneur. Of course, the money spent for the lunch went to charity, but the lesson learnt with live on forever.
3. Be prepared for any risks
If there’s anything that the business world has taught Buffett, it’s the art of facing risk. He believes that “risk comes from not knowing what you’re doing.” There are two sides of the coin here – either you become a risk taker or you learn how to minimize your risks. Of course, the latter would be the best approach, but it does not offer instant gratification.
Nowadays, there are tools that can help minimize risk and assist investors in making the most educated moves, such as a market scanner. FXCM explained that a market scanner as a research tool for investors gives indicators and timeframes on when to buy or sell. In terms of leadership, there’s no technical tool as such. However, there are basic principles to abide by in hedging losses and by learning from your mistakes. Buffett said: “I make plenty of mistakes and I’ll make plenty more mistakes, too. That’s part of the game. You’ve just got to make sure that the right things overcome the wrong ones.”
These three important leadership lessons embody Warren Buffett’s decades of experience, which has included both success and failure. To follow Buffet’s example, it’s worth considering these tidbits as a guide to good practice. If it worked for Buffett, we hope it works for you, too.