Taking Time to Think

Bless the Buffett Buffet of Business Common Sense

December 2006 By Denny Hatch

multipage

After his paper route, Jack grabs a quick coffee and heads for the post office where he works full-time as a letter carrier. He thrives on work. The time that Jack puts into these two jobs have enabled him to pay off the mortgage on his house—with a swimming pool in New Jersey—and have also allowed him to take his wife and kids on a vacation to Disney World.

It doesn’t matter how tired Jack is during the day. His two jobs don’t require much thinking. The fate of a company and its stock doesn’t hang on Jack’s decisions. If he burns out, he’s the only one hurt. He works like hell and lives the American Dream.

Extreme Jobs
“The American Dream on Steroids” is how Catherine Orenstein describes the lives of a new breed of crazed executives and salesmen. Sylvia Ann Hewlett and Carolyn Buck Luce chronicle this trend in a horrifying study in the December 2006 issue of the Harvard Business Review titled “EXTREME JOBS: The Dangerous Allure of the 70-Hour Workweek.”

What drives these maniacs to push themselves to the point of perpetual exhaustion? The five top reasons:

1. Stimulating/challenging/gives adrenaline rush
2. High-quality colleagues
3. High compensation
4. Receive recognition for work
5. Power/status

“They brag about pulling all-nighters and about flying 300,000 miles a year,” the authors write. “To them, a 70-hour workweek is about proving their worth. It’s akin to going up against the elements.”

This isn’t a small fringe group. The authors’ “data reveal that 62% of high-earning individuals work more than 50 hours a week, 35% work more than 60 hours a week and 10% work more than 80 hours a week and 42% take 10 or less vacation days a year.”

The Backlash
Yes, they get a lot done. But at what cost? They admit that these extreme schedules seriously interfere with four elements of their personal lives:

1. Being able to maintain their home
2. Having a strong relationship with their children
3. Having a strong relationship with their spouse/partner
4. Having a satisfying sex life

The study fails to include information about the possible harm to the business based on decisions made by employees when they’re suffering from conditions of perpetual sleep deprivation and jetlag.

For example, when I was running Target Marketing—even after a good night’s sleep and nothing stronger to drink than coffee or Coke at lunch—I would sometimes be hit with a wave of tiredness to the point of being desperate for a nap. Since I worked in an open office, twenty minutes of zzzz’s weren’t possible. So I would get up and wander through the office trying to look busy. I would check in with the art department, schmooze with the sales people, make small talk with the editors or go into the lavatory to splash some cold water on my face.

When I’m dog tired, the computer keyboard is my enemy and I dare not make any decision more important than how much milk to put in my coffee.

Working at home, I can crash for a half-hour, which fixes me up for another five hours at the computer.

I remember reading about one of the Hollywood studio chiefs—I think it was Louis B. Mayer, but maybe Harry Cohn—who had a bedroom behind his office. Every day after lunch he would don pajamas and have a good long afternoon snooze after exercising his droit de seigneur with a starlet or minor contract player.

How to Turn Employees Into Extreme Workers
“Middle Class in Turmoil” is a study by the Center for American Progress. One of the findings in this study revealed that workers in the $18,000 to $88,000 income range are “less prepared for an economic emergency, such as losing a job or visiting an emergency room, than at any time since the late 1970s,” writes Debora Vrana on MSN’s “Money Central.”

In short, people are terrified of losing their jobs. Management knows this but frequently forces workers to take on more and more. They dare not say no.

In the Nov. 28, 2006 issue of The Wall Street Journal, Erin White wrote in her article titled: “CULTURE SHOCK: Learning Customs of a New Office:”

For six months after starting a new job a few years ago, project-management executive Lyria Charles didn’t check her email over the weekend. Finally, a colleague explained that employees were expected to read email over the weekend. “I didn’t know,” she says. “No one told me.”

Is this not the first step in turning an employee into a BlackBerry slave?

How Warren Buffett Keeps Me Sane
Every time Warren Buffett comes into my life—in print or on television (I’ve never met him in person)—he inspires me with a feast of useable tips, information and old-fashioned business common sense.

In the July 6, 2006 issue of this e-zine, guest columnist David Garfinkel wrote “Warren Buffett’s Five Secrets of Success.” It is loaded with insights and pithy quotes—many of them funny as hell as well as self-deprecating.

Buffett knew and admired the work of CNBC’s “Morning Call” co-anchor Liz Claman and invited her to bring a camera crew for a full-day tour of Omaha, Nebraska. The result was a splendid one-hour special on Nov. 20, 2006: “Warren Buffett: The Billionaire Next Door.” Viewers were treated to an hour with this affable, avuncular gentleman who clearly enjoys life to the fullest. Included were a private visit to his office and his house—purchased in 1958 for $31,500—as well as to two of the local retailers he owns: the Nebraska Furniture Mart and Bosheim’s jewelry megastore.

Buffett’s business and personal style is 180-degrees from the manic madness of the people described in the Harvard Business Review. We never saw him thumbing a BlackBerry or with a cellphone glued to his ear. Amazingly, no computer was on the desk in his office.

Buffett is the polar opposite of the hotshot moguls that make a production out of lunch by arriving with an entourage at New York’s Four Seasons restaurant in a limo and then are seated where they can see and be seen by other nabobs—all while savoring a $56 Dover sole.

Instead, Buffett drives his 2001 Lincoln Town Car to McDonald’s for a Big Mac, fries and a Cherry Coke, or heads to Gorat’s Steak House for a $24.95 T-bone—the most expensive item on the dinner menu. By the way, Gorat’s is where he entertains his most favored investors.

Nuggets from Buffett on the CNBC-TV special:

On acquiring companies: “I look for a business that I can understand. It must have a durable competitive advantage—a business that is hard to replicate, a business that has a moat around it.”

On relationships with his CEOs: “All Berkshire Hathaway CEOs own their own business. I do not communicate often, so when I do communicate, they know I mean business.”

“They are my partners and I am managing partner.”

“The only thing I demand is a confidential letter that tells me what to do if they die.”

On management style: “I have no meetings. Zero.”

On happiness: “I like the way I was living when I was in my 20’s. I still like that way … I like to go home and put on a sweat suit.” Buffett told Claman and the viewing audience that he’s happy eating popcorn and watching a Nebraska game on the big screen TV.

On success: “Success is doing what you love and doing it well.”

I came away from Claman’s CNBC documentary with a great feeling for the “Sage of Omaha.” His life and work are all about excellence—about acquiring companies that range in size from a small, Omaha retailer to GEICO—with the single intent of helping them grow and flourish. His corporate philosophy and culture is hands-off management, letting his partners and associates own their jobs.

How different this is from the great corporate raiders and riverboat gamblers like Carl Icahn, Kirk Kerkorian, Sumner Redstone and the Wall Street hotshots, who buy companies in order to flip them for a quick buck or fold them for tax write-offs or to eliminate competition, throwing hundreds of loyal, suddenly very scared and hurt employees out into the streets.

And how different is the life and philosophy of Buffett from the self-absorbed, extreme jobsters whose 100-hour work weeks aren’t about the company, not about excellence, not about the customers, but all about themselves—their schedules, their endurance, their money, their travel and their sick craving for affirmation, power and status. May God protect and love their children, because they don’t.

What shines through here is that Buffett—this innately decent, caring human being, with his simple lifestyle and dry sense of humor—takes a lot of time out of every day to follow Thomas J. Watson’s dictum: “THINK.”

Although he pays himself a modest salary of $100,000 a year, the good guy is worth an estimated $46 billion, which is more money than the entire GDP of Luxembourg and Panama combined.

And he’s using his smarts and his money to make the planet a better place than when he found it. Not only is Buffett enhancing the lives of 192,000 Berkshire Hathaway employees, but the world’s second richest man announced that he’ll be handing over his fortune to the world’s richest couple, Bill and Melinda Gates, whose foundation is on track to change the world for the better.

Will any of these 100-hour-a-week wonders—on their treadmills to oblivion—come anywhere close to matching Buffett’s achievements?

Hardly.

In the long run, will their lives matter at all?

You be the judge.

We can only hope that Buffett, now 76, will go on forever, which isn’t as far-fetched as it sounds. Here’s how he ended his annual letter to stockholders last year:

Lest we end on a morbid note, I also want to assure you that I have never felt better. I love running Berkshire, and if enjoying life promotes longevity, Methuselah’s record is in jeopardy.

In the immortal word of sportscaster Marv Albert, “Yessss!”

P.S. I urge every reader to invest $6 and download the Harvard Business Review article by Sylvia Ann Hewlett and Carolyn Buck Luce, “EXTREME JOBS: The Dangerous Allure of the 70-Hour Workweek.” Then visit the Berkshire Hathaway Web site and read Buffett’s letters to stockholders.