One lady or gentleman is about to walk the suspension bridge in the world of investing. In Omaha, Nebraska, the headquarters of one particular investment firm is buzzing. The alpha male, having valiantly grown his pride, is on the way out.

This is no ordinary investment firm. This particular one started out with the merging of two manufacturing companies, and at the wane of this industry’s era in 1964, a man stepped in to purchase control of the company. By 1967 he expanded it’s operations into insurance and other investments and by 1984 the last of the manufacturing plants were closed down. In 2006 it’s shares closed at a record $150,000 per share (partially because they never split shares as they want to attract long term investors, not speculators). In 2007 it was voted the most respected company in the world based on a survey by American money managers. They have moved from investments into buying whole companies. Currently, they own 63 companies in the insurance, energy, utilities, retail, manufacturing and finance industries. AGMs attract 20 000 shareholders on average. The outgoing CEO receives a salary of $100,000 with no stock options – one of the lowest amongst large companies in the US. By 2008, 47 books with his name in the title were in print, topped only by the Dalai Lama.

One could argue that Warren Buffett has done all he could for Berkshire Hathaway, in ensuring it remains financially viable and ethically sustainable. What is left then for Warren Buffett? Or more accurately, has Warren Buffett passed his tests or is the real test about to be taken?

John R Ryan in a recent post in Business Week discusses 3 keys to a great legacy of leadership. He argues firstly for how little we actually pause to think about our legacy. Edward Gibbon once said, “Truth, naked, unblushing truth, the first virtue of all serious history, must be the sole recommendation of a personal narrative.” What Ryan hints at is your corporate epitaph.

“Here lies John Reed. His poor communication and lack of interest in middle management will stay with us forever. May whoever he was trying to be at this company quickly fade away.”

“Here lies Nancy Brown. What a marvellous example of half heartedness she was. May whatever she wanted to achieve be achieved by someone else soon. Maybe even by one of our competitors.”

“This was Brendan Klein. Tragically forced to operate without a spine. Sheer inability to follow through on promises rests fondly in our hearts. A less committed leader we are unlikely to find.”

“Graham White rests here. A true beacon of soullessness. His stunning display of tactical disengagement will stay with us for…hopefully not too long.”

“Sarah Bryan: Wonderfully inadequate in seeing her team through in tough times. A woman with handsomely shut ears, long will she be remembered, somewhere, not in this company.”

“Here lies The Head. We imagine he could have been a fantastic leader, but al we ever saw of him was his well crafted nose in the air.”

Ryan addresses three main principles to leaving a legacy: Understanding and grace, determination and embracing critical mirrors. He sums up legacy as “not what we wish it to be or what we insist it is but the sum of how others work and live because of the behavior they saw us exhibit”.  Legacy is not a series of business principles passed over. Nor is it a state of mind you are born into, or a shiny farewell present on your last board meeting.

Buffett himself has mentioned that he is ‘unsure whether once they’ve inherited the earth, the meek will stay meek.’ What Berkshire Hathaway, and the rest of the investment world in awe of him, will discover in the coming few years is how much of a legacy Buffett has. He has managed to not only swim upstream through various recessions, but also turned ‘upstream’ into a desired art form, defying textbooks along the way. When his success cannot be measured in the same way, his persona not admired in the same way, his skill not be drawn from in the same way, and all the Buffett rules of engagement are beyond grasp, a lasting legacy will either manifest or fade into temporary existence for both his peers and company.

Buffett has submitted his final paper. The Legacy Test has no room for sicknotes, it cannot be postponed and cannot be written in pencil. It passes no-one over and every corporate leader registers for it by default. Nor is this a time to fear, it is a time to make it count.

 

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