When I began my career, there were two gurus I wanted to work with, once I had made enough money — the 20th century’s most influential thinker and writer on management Peter F Drucker, and the world’s most influential writer, thinker and creator of wealth, Warren E Buffett. Since then, I’ve realised that ‘enough’ is a stretchable term, increasing faster than a growing teenager.
Last week, over a press conference and a subsequent meeting, I found that more than Buffett’s views on wealth creation, it was his insights on how people behave that gripped. (I was never interested in wealth per se, only the process of its creation, in how he identifies opportunities that others can’t, and how over 35 years he has been able to deliver a return of 20% per annum.)
Since June 2006, when he announced that he was going to give his most of wealth back to society — and not to his children — largely through the medium of the Bill and Melinda Gates Foundation, I found that in his giving, like in his investments, Buffett was able to go beyond his ego and take the best decision possible. He hasn’t even named a foundation after him, and has given in a spirit that’s so true to the process of philanthropy.
I had a question on the process of his giving, however. The structure he envisaged is that every July 5% of his shares in Berkshire Hathaway would go to the Foundation. But when the value of the company is growing by 20%, this amounts to a charity till perpetuity — every year, the value of the balance 95% will grow faster than the 5% outgo of shares.
Wasn’t this a contradiction? “More than 99% of my wealth will go to philanthropy during my lifetime or at death,” he said in his Giving Pledge. “You’ve got your numbers right,” he told me over a pre-lunch meeting, looking pleased and speaking with large doses of enthusiasm. “But according to my will, all my wealth should be given to the Foundation during my lifetime or within 10 years of my death.”
In his February 2007 letter to shareholders, he at 76, announced that he was looking for a successor for the long term, and had a plan. “I intend to hire a younger man or woman with the potential to manage a very large portfolio, who we hope will succeed me as Berkshire’s chief investment officer... We may in fact take on several candidates.”
I had thought of applying, but since I didn’t have any record, leave alone impressive, in managing money, I held back. Among the rest, that younger person could be Ajit Jain, who manages the insurance business of the group. Like Buffett, I found Jain to be as humble as him with one difference — apart from his humility, Jain is extremely low profile. He meets you with a smile in his eyes and warmth in his handshake.
So, more than making money, I learnt one bigger lesson from Buffett. Find people you enjoy being with or whose qualities you admire. Then go and work with them. In philanthropy, he’s found Gates, who is delivering efficient health solutions with passion. In Jain, he’s probably found a man who he enjoys spending time with “every day” and who will probably keep the company growing the way he has. “It’s as simple as that,” he said.
Yes — and like his investment philosophy, it’s as difficult to implement.