Thought for New Year's Eve

Alice,

I hit the wrong button last night, so a mangled run-on of an incomplete comment may have accidentally gotten posted because I thought the "save" button saved merely a draft that I could come back to and clean up later. Hopefully you have comment monitoring capability and can monitor that mangled comment away. If not, so be it. Here's what I intended to say:

I'm new to your blog but not to your prior work as an insurance analyst and definitely not to your opus magnum. And I gotta tell ya, I'm more blown away by your blog postings (and your readers' incisive comments that go with them) than by the book or by your prior work as an analyst, both of which were already in the excellent category. Everything I have seen or read since then gives you a lot of street cred in my opinion because of your fierce objectivity. The Jeff Matthews interview confirmed that.

But the nice thing about blogs is that you can roam around and write down anything that strikes your fancy and then get feedback from people who take the time to comment. Case in point: your New Year's Eve posting on Peter Drucker's HBR article about "managing oneself" -- not to mention your own sad but true observation that what Drucker said then is truer today than it was when he wrote it.

The passage of time is proving that Peter Drucker may have been the greatest management consultant in modern business history. What he gives executives in the article you mention is not merely a lesson in time management. He gives us a practical ethical principle we should apply across our entire lives, not just our business management lives. And he delivers it in a straightforward and understandable manner, unlike, say, the brilliant Lord Moulton, who some hundred years earlier wrote an essay entitled "Obedience to the Unenforceable." Same concept, but managers don't read Lord Moulton. They read Drucker, and Drucker doesn't call it "obedience to the unenforceable." He just calls it "managing oneself," then lays it down on paper so well that busy executives can get to the heart of the matter quickly.

Drucker had (in my view) the clearest understanding of an executive's true place in society. He brings that out best in his small tome, THE EFFECTIVE EXECUTIVE, at the bottom of p.169--top of p.170 of the 2006 edition with the red and yellow jacket:

"There are surely higher goals for a man's life than to become an effective executive. But only because the goal is so modest can we hope at all to achieve it; that is, to have the large number of effective executives modern society and its organizations need. If we required saints, poets, or even first-rate scholars to staff our knowledge positions, the large-scale organization would simply be absurd and impossible. The needs of large-scale organization[s] have to be satisfied by common people achieving uncommon performance....Though this goal is a modest one, one that everyone should be able to reach if he works at it, the self-development of an effective executive is true development of the person. It goes from mechanics to attitudes, values and character, from procedure to commitment." Aristotle didn't say it any better in his NICOMACHEAN ETHICS, which most managers never will read anyway because managers don't get paid for deep thinking. They get paid -- or they're supposed to get paid -- for results.

Now, let's link your Drucker insight to Berkshire: Mr. Buffett has somehow managed to assemble a large and diverse group of hardworking managers. Some are just brilliant. Many, however, are "common people achieving uncommon performance." (Please note: By suggesting that some of Berkshire's managers are "common," I do not mean to insult but to compliment. Just stress the second half of that Drucker statement, "achieving uncommon performance.")

Large numbers of people spend large amounts of time and energy trying to handicap the odds as to who will succeed the subject of your biography whenever he dies, retires, or goes Lady GaGa. (I am glad you did not opine on Kass's recent prediction on CNBC that Mr. Buffett will retire in 2010. I consider it a low-probability event unless Kass knows something about Mr. Buffett's health that other people much closer to Mr. Buffett than Kass don't, which is also a low-probability event.)

Somewhere, maybe here, someone talked about institutionalizing the future manager of the managers at Berkshire once Mr. Buffett exits. I would find it interesting, now that you have introduced Drucker, to see you discuss the succession issue in terms of who of all the candidates is best at "managing oneself." You seem to suggest in your NetJets posting that, if Sokol turns NetJets around, "he's our man." Does that mean that the measure of who best "manages her- or himself" is demonstrated strictly by financial results? Or does "managing oneself" extend beyond business to include managing oneself so that e.g., family or faith or fitness are also in balance. I think you as Mr. Buffett's biographer might say that Mr. Buffett measures how his managers "manage themselves" strictly via their financial results. I'd like to hear what YOU have to say about it, not that you have the time. It is good enough that you brought up the concept of "managing oneself" and pointed us to Mr. Drucker's article in HBR. However, you discuss Buffett's singular focus as the key to his success so objectively that I'd like to see you reframe the question of succession in the context of what does it really mean to "manage oneself." Meanwhile, whatever is in the water you are drinking, keep on drinking it, because there's some good stuff here on your website. I think a lot of people are waiting for your NetJets #3 and beyond. Thanks for the Drucker one and the one before that....and the ones before that.

Thanks for sharing this Alice.

Wishing you and David and your loved ones a wonderful and healthy 2010!