Behind the Berkshire Hathaway Curtain: Lessons from Warren Buffett’s Top Business Leaders
Ronald W. Chan
John Wiley & Sons (2010)

A chorus of eloquent voices that suggest “a sense of what life is, can be, or should be”

Prior to reading this book, I had already read two biographies of Warren Buffett, Roger Lowenstein’s Buffett: The Making of an American Capitalist and then Alice Schroeder’s The Snowball: Warren Buffett and the Business of Life as well as The Essays of Warren Buffet, brilliantly edited by Lawrence A. Cunningham. In the Introduction to that anthology, Cunningham observes: Lawrence A. Cunningham observes, “The CEOs of Berkshire’s various operating companies enjoy a unique position in corporate America. They are given a simple set of commands: to run their business as if (1) they are its sole owner, (2) it is the only asset they hold, and (3) they can never sell or merge it for a hundred years.” With regard to investment thinking, “one must guard against what Buffett calls the `institutional imperative.’ It is a pervasive force in which institutional dynamics produce resistance to change, absorption of available corporate funds, and reflexive approval of suboptimal CEO strategies by subordinates. Contrary to what is often taught in business and law schools, this powerful force often interferes with rational business decision-making. The ultimate result of the institutional imperative is a follow-the-pack mentality producing industry imitators, rather than industry leaders – what Buffett calls a lemming-like approach to business.”

In this volume, Ronald W. Chan shares what he learned during interviews of nine executives who head companies owned by Berkshire Hathaway: Business Wire, Justin Brands, Buffalo News, Jordan’s Furniture, Acme Brick Company, See’s Candies, The Pampered Chef, and Mid American Energy Holdings Company. He devotes a separate chapter to nine executives and focuses on a valuable lesson he learned from each that provides “a sense of what life is, can be, or should be.” For example, in Chapters 1, 3, and 7:

“Teaming Up with Randy Watson”
Justin Brands
Watson Quotation: “My job is to make sure that I have the right people in the right place, and then stay out of their way.”
Chan Selection: “There is no limit go what a man can do or how far he can go if he doesn’t mind who gets the credit.” Ronald Reagan”

“Taking Action with Stanford Lipsey”
Buffalo News
Lipsey Quotation: “I thrive on the satisfaction of accomplishment…the feeling of getting things done gives me passion in life and in business.”
Chan Selection: “Never mistake motion for action.” Ernest Hemingway

“Look Forward with Marla Gottschalk”
The Pampered Chef
Gottsckalk Quotation: I am willing to take on less glamorous assignments if I thought I could learn from them and be recognized for my contributions.”
Chan Selection: “I am a slow walker, but I never walk backwards.” Abraham Lincoln

Unlike the situation in L. Frank Baum’s classic, The Wizard of Oz, when Dorothy and her valiant companions are shocked to discover that “The Great Oz” behind the curtain is a fraud, those who read this book will soon realize that behind the BH curtain, there are no frauds. On the contrary, they are wholly authentic, immensely talented and decent men and women who head its companies. The confidence that Warren Buffett’s has in them and his deference to them (as indicated in Cunningham’s comments) are wholly understandable.

Buffett is of course a financial genius but it must also be said that he is a world-class judge of character as well as talent. He once observed, “In looking for someone to hire, you look for three qualities: integrity, intelligence and energy. But the most important is integrity, because if they don’t have that, the other two qualities, intelligence and energy, are going to kill you.”