warren buffet is looking at your company’s culture
By christina chau in Culture and Leadership
Imagine Warren Buffet (or your favorite investor) is looking at your company, trying to determine if he wants to buy your stock or invest in you. What is he looking for? Your carefully crafted business plan? Your performance over the past 10 years? What customers are saying about you on your Twitter feed?
No, Warren Buffet is looking at your workplace culture.
How your executives lead. How your people are treated. How much greatness is happening in your organization. In fact, according to the Berkshire Hathaway 2014 annual report, Buffet’s formula for choosing companies to invest in is this:
Culture + Leadership + Trust = Wealth
Laura Rittenhouse, author of Investing Between the Lines: How to Make Smarter Decisions by Decoding CEO Communications, has read and analyzed over 2,000 shareholder letters of more than 150 publicly traded companies. After reading these words from various CEO’s, Rittenhouse encourages investors to “grow by acquiring businesses that share these values and are led by trustworthy founders and entrepreneurs who love their businesses and treat employees fairly.”
And it’s not just investors. Boards of Directors for major Fortune 500 companies are starting to take a deeper look at the cultures of their companies. A panel of independent board directors said, “Oversight of corporate culture should be among the top governance imperatives for every board. A strong culture offers a powerful source of competitive advantage.’’ (Wall Street Journal, After Uber Boards Wake Up to Company Culture). After the scandals of companies like Uber and recent Hollywood studios’ sexual harassment fiascos, lapses in workplace culture can bring entire companies crumbling down, and shareholders are paying attention.
If you want your company to grow, if you want to attract the best talent, if you want to stay in business, pay attention to your workplace culture. Your company’s culture can damage your organization or lead you to greatness. Just ask Warren Buffet.