A few months ago a wealthy Chinese businessman secretly traveled to Oklahoma to pay a visit to Warren Buffet, the richest man in the world, according to some experts. And pay he did…nearly 2.6 million dollars to sit at the feet of Warren Buffet, head of the Berkshire Hathaway group and perhaps the most successful investment group in modern times.
The secret visit was repaid by Buffet with a public trip to China this week along with Bill Gates, co-founder of Microsoft and Bridge playing partner of the Oracle of Omaha. Together they talked about philosophies of life with the 40 richest people in China. Buffet saw his role as a teacher. He said that money does not make people happy. It is friends and the love of family that constitutes true wealth. He said that he enjoys making money but that in the end if he were given a choice of 20 billion dollars more or 20 new friends he would pick the friends.
Bill Gates did not really want to meet Warren Buffet for the first time about 10 years ago. He scheduled only a half an hour for him. The meeting lasted 10 hours and Gates has been sitting at his feet ever since.
I am slogging my way through Confucius’ Analects. I am reading it in the original Chinese. Although it is hard work and I am only managing to read a chapter a week, it is one of the most enjoyable exercises I have ever performed. These saying remind me so much of what Buffet has been talking about this week on China television.
Like Confucius Buffet believes in honesty and virtue.
“Virtue is more to man than either water or fire. I have seen men die from treading on water and fire, but I have never seen a man die from treading the course of virtue.”
One of Confucius’ most important principles is the supremacy of virtue. He argues that acting ethically in all transactions is is paramount, more important than striving to make money. Like most Americans, Confucius would be pro-business. He would simply insist that it be done ethically. The recent collapse of the economy is due to unethical behavior of mortgage resellers who had no interest in the lives they were destroying.
Warren Buffett has made more money investing than any hedge fund manager. The Oracle of Omaha is seen as following a virtuous path in his dealings and as remaining humble in how he lives. He is a man who prefers Cherry Coke, popcorn, and a comfortable couch. Business leaders need to heed Confucius. Acting virtuously is always absolutely necessary. Not only is it right; it is, in the long run, the way to wealth.
Speaking about the Emperor Confucius said
“Let him preside over them with gravity; then they will reverence him. Let him be final and kind to all; then they will be faithful to him. Let him advance the good and teach the incompetent; then they will eagerly seek to be virtuous.”
Confucius laments throughout the Analects that too often leaders forget to take care of those under them. They spend too much time trying to grab glory and riches for themselves without thinking about others. In a time of crisis they behave even worse, fighting to preserve their positions at all costs. That is exactly the opposite of what they should do, for themselves and for their organizations.
Buffet still lives in the same house he bought 50 years ago. He drives his own car and flies commercial even though he owns the world’s largest private jet company.
Jim Collins, in his new book, How the Mighty Fall, identifies basic problems that plague companies that succumb to mediocrity. One is managers seeking to grab all the credit for themselves without a care for their colleagues and subordinates.
The Chinese search engine giant Baidu tried to save costs by cutting salaries while insisting on unattainable sales quotas. The combination not only destroyed morale and spurred anger; it also became a public relations disaster when employees protested publicly. Baidu will have to invest a lot of resources in undoing the stigma it earned of being bad place to work.
Measure Three times then act with Double Force
Chi Wan thought three times before taking action. When the Master was informed of it, he said, “Twice will do.”
Confucius insists that thinking three times before action is smart. Look before you leap, but don’t look for so long that you succumb to indecision.
Weighing options is important but you need to be decisive and in tune with market demands. A commanding lead disappears fast if you let another company do a better job of providing for your customers.
A reading of Confucius reminds us that virtue, looking out for those around us and taking calculated but decisive action are all essential behaviors that we cannot ever do without. Buffet will not buy a company unless it is ten years old. He looks at the longterm and never at the stockmarket. When he acts he makes a major move such as when he bought a stake in the railroads of America. Here in China he drove up to BYP, a Chinese company that started only 12 years ago with $300,000, in an electric car. Today BYP is the biggest and best energy company in the world. It is building e-cars, electric storage systems, and solar panels. Confucius says…I mean Buffet says that they will shape the future of the world.
One of the reasons Buffet came to China, other than to repay a favor to a Chinese businessman, was to encourage people who are wealthy beyond imagination is to give away most of their money.
A Chinese reporter asked Buffet why make money if you are only going to give it away. Buffet shot back “Because money will not provide you happiness.” Still like Confucius Buffet is not against making money. He said that he enjoys working at age 80 just as much as age 26 when he started Berkshire-Hathaway Investments. Buffet has provided for his family and grandchildren but only modesty. He said there is not point to leaving them with an inheritance beyond imagination or ability to spend in a hundred lifetimes.
Buffet will have a huge impact on China which may stretch beyond the lifetimes of his grandchildren. It is hard to predict the future but thel Chinese are listening