An Analysis of Warren Buffett's Leadership Principles and Styles

This essay delves into the leadership principles of Warren Buffett, the renowned investor and chairman of Berkshire Hathaway. It explores his influence on others, highlighting his skills and leadership qualities that have contributed to his success. The essay examines various leadership styles adopted by Buffett, including servant, democratic, and self-empowered leadership, providing insights into his approach to motivating employees and achieving organizational goals. It discusses essential principles for effective leadership, such as self-discipline, communication, and time management. The analysis also considers events that shaped Buffett's leadership approach and acknowledges potential negative aspects. This paper offers a comprehensive overview of Buffett's leadership, providing valuable lessons for aspiring leaders.

Running Head Leadership Principles 0
Leadership principles of
Warren Edward Buffett

Leadership principles 1
Abstract
Leadership is the skills that are used to organize other people to achieve set goals and
objectives. Whether you are in management or leading any project, leadership plays an essential
role in motivating the employees and preparing them for completing the task effectively and
efficiently. Warren Buffett is a legendary investor and chairman of Berkshire Hathaway and one
of the wealthiest people in the world. He influences people with his skills and leadership
qualities. As every person have their own skills which influence people to follow them and learn
their strategies to get success and achieving the set goals. In business, every manager needs to
know how to deal with the employees so that they will work efficiently and do hard work in
achieving the objectives. Various leadership styles of Warren Buffett will be discussed and also
some negative aspects of him will be highlighted.

Leadership principles 2
Introduction
Leadership is a conceptual quality in a human being to influence others to do whatever
they are asked to do with the confidence to accomplish the goal. It is an important part of
management which helps in maximizing the efficiency and achieving the organizational goal. A
leader takes the initiative to lead the team and motivates them to work better. Leadership skills
are required in a person to get the job done efficiently and effectively1. There are different types
of leadership styles and their effect depends on the attitude, beliefs and the values of the person
who is involved in leadership. We are going to study the leadership principles of popular investor
Warren Buffett. He is the Chairman, CEO and the largest shareholder of Berkshire Hathaway,
which holds further 60 subsidiaries. He started investing when he was 11 in the New York stock
exchange. He had grown his own investing principles which helped him to get a lot of wealth.
He has set certain values that he uses to invest and make the decisions of his life. We will study
the various leadership skills which he adopted in his life as he is a leader of those who want to
earn profit from investing. He is often been called the “Oracle of Omaha” where he was born on
August 30, 19302.
The objective of this writing is to know about the warren buffet and the leadership
principles which every leader should know. The discussion will also make the focus on the
leadership styles and qualities which Warren Buffett adopted in his life. Various events that
shaped their leadership approach will also be discussed. Also, some negative aspects of Warren
Buffett leadership will be highlighted in the study.
Leadership Skills: Principles Every Leader Should Know
There are various principles every leader should know in order to lead the team in the
organization. For the competitive advantage in the business, leadership skills are essential and
required at each level of the business. It is the potential of a leader to influence the behavior of
the other3. A leader has to influence the group to work and mold the behavior of the group to
accomplish the objective of the organization. Effective leadership requires the courage to
1 Zehndorfer, E. (2013). Leadership: A critical introduction. Rout-ledge.
2, Finkle, T. (2010). WARREN E. BUFFETT AND BERKSHIRE HATHAWAY, INC
3 Pearce, C, & Manz, C. (2005). The new silver bullets of leadership

Leadership principles 3
influence team. The team will be influenced when the team leader makes them understand how
to work effectively and efficiently and explain the whole process of the work to be done. There
should be openness will interacting with the team as what are their point of view and
understanding of the point we want to communicate, that will help in making them understand
what you want to convey4. As we know great leadership begins with the person, not with the
position which they are holding in the organization. It is important to manage yourself before
leading the team. A leader should be self-discipline before managing the team. It will help in
making the discipline in employees. Also, the level of authority should not be higher than the
level of influence, so the leader must be like that other people want to follow you in every aspect.
People want their leaders who listen to them and understand them. It is not necessary to agree
their point but they should listen and understand their point of view to be a good leader5. It is
about paying attention to them and how much you respect them and their understandings. It is
about how you care for them.
The leader should build a work environment for employees as management is getting the
things done by people but the work environment is also necessary which helps in the stable
growth of the business. A leader should treat employees on humanitarian terms. The healthy
work environment should be provided to the employees to work in an efficient manner6. A leader
must be able to understand the value of time and how to manage the time. He has to ensure the
timely completion of the activities which is to be done by the team. Time management is
important to get the work done on time and helping the team in achieving the same.
Warren Buffett as a Leader
Warren Buffett is goal oriented and hardworking person who is very dedicated toward
work. He always focuses on his long term goals along with the short run goals. When he set the
goals he starts working to achieve his objectives. He is someone who works very hard to achieve
his goals and for that he makes every possible plan to implement and make the best of use of his
knowledge. As an investor, he is very careful while doing his work. He is an influencer of many
4 Mumford, M, & Marks, M. (2000). Development of leadership skills: Experience and timing. The Leadership Quarterly, 11(1).
5 Morgeson, F., DeRue, D., & Karam, E. (2010). Leadership in teams: A functional approach to understanding leadership
structures and processes. Journal of management, 36(1), 5-39.
6 Zaccaro, S. J., Rittman, A. L., & Marks, M. A. (2001). Team leadership. The leadership quarterly, 12(4), 451-483.

Leadership principles 4
as to how he started earning at the age of 5 and he is the one who started investing in the stock
market at the age of 11. When we talk about Warren Buffett he is good in making money than
how to make money by investing in a proper manner and building company. In his life, he
countersigns how to make efficient and effective use of capital7. As a leader, Buffett has a
relatively high level of confidence in himself, whatever he does in his life he do with all
confidence that he is doing right. He had extensive knowledge of bonds and stocks of the market
which he got after reading so many books and investing from an early age which helped him in
gaining confidence and shareholder's trust8.
Buffett has been ambitious since he was young; he did whatever he wanted to do as when
he was eleven he decided that he would be a millionaire by age of thirty and that happened by
investing regularly efficiently and effectively9. He always tried to overcome the things that he
had feared him like public speaking so he took the coaching to overcome and made it possible.
Buffett is competitive in nature as he never wants to lose and he prefers to make the deals which
ensure that he will win without any risk-taking. In influencing the people he does a great job as
he is a storyteller. He is always able to influence his audition as he thinks it is important and he
knows how to make audition comfortable with his skills He always tries to talk on the subject
which the audience wants to listen that helps in attracting people without any effort. He always
wants to share his take to the world; he usually tells the stories of his real-time experience with
an audition to listen with interest10. He helps the followers to become more innovative and
creative by trusting oneself rather than follow analysis and predictions of others, he asks them to
their own research while investing and make your own decision and he let people choose their
own stocks to but rather to tell them which stock to buy.
As a leader, he always considers every individual as important and supports them in
development. He did not want to make his employees do their only work which is required
7 Connors, R. (2010). Warren Buffett on Business: Principles the saga of Omaha. John Wiley & Sons.
8 O'Loughlin, J. (2011). The real Warren Buffett: Managing capital, leading people. Hachette UK.
9 Miles, R. (2004). Warren Buffett Wealth: principles and practical methods used by the world's greatest investor. John Wiles &
Sons.
10 Miles, R. (2003). The Warren Buffett CEO: Secrets from the Berkshire Hathaway Managers. John Wiley & Sons.

Leadership principles 5
instead he insists them to learn and improve more, and we were always there with employees to
make sure they have a share of insights11. He always believes in developing his followers and
trusts them that they have an ability to learn from their own. He had always motivated his
managers by giving the authority to make the decision and lead the team on their own.
Leadership style
Every leader does not have the same attitude and perspective. Every leader has a different
style of influencing and dealing with the people. The work done by the leader varies because it
depends on the thinking of the leader and with whom he is dealing, it depends on the kind of
people the leader interacts. A perfect leadership style is adopted by the leader to bring the best
out of the people who follow him12. Warren Buffett also adopted the leadership styles in his life
to influence people with his work and motivates them to invest in the share market. We will
discuss the leadership styles which are adopted by Warren Buffett. Leadership styles which his
personality and work reflect are Servant leadership, democratic leadership and self-empowered
leadership.
Democratic leadership is when the leader keeps the employees on priority and encourages
them to play an important role in decision making, he listens to their suggestions and then taking
the decision as the decision making power is with the leader13. Warren Buffett always discusses
the topics and work assignments with the employees that need to be accomplished, he shows the
significant focus in involving the employees and make the communication in two way where he
listens to them while making any decision and this will increase the motivation and satisfaction
level of employees.
Servant leadership is when an individual interacts with others to serve them. It is a very
powerful style in management. When the leader focuses on the growth and well-being of
11 Page, V. (n.d.). Warren Buffett: Success Story. Retrieved from Investopedia: https://www.investopedia.com/university/warren-
buffett-biography/warren-buffett-success-story.asp
12 Rubin, E. (2013). Assessing your leadership style to achieve organizational objectives. Global Business and Organizational
Excellence, 32(6), 55-66.
13 Woods, P. (2004). Democratic leadership: drawing distinctions with distributed leadership. International journal of leadership
in education, 7(1), 3-26.

Leadership principles 6
individuals and also the community to which they belong is focused to become an effective
leader14. Warren Buffett always empathizes his employees to grow personally. He never judged
any employee as a person as he may judge an individual on the basis of the mistakes and fault he
has done, this motivates a person as he is not judged for his community or any other aspect.
Self-empowered leadership in which the leader is involved in getting the things done with
the team. The leader gets involved in every aspect with the team to achieve the objective and
involves developing the self-confidence and strength to set the goals and fulfill the potentials.
Warren Buffett as he is a self-empowered leader because of his loyalty, for achievement he plans
the strategy that how to achieve it, when he makes the commitment he will always pursue till the
end to achieve the goal which he had set for himself. Warren Buffett leadership style is very
effective as he focuses in leading and engaging his employees and this will help in increasing the
motivation and satisfaction level of the employees and he also engages the employees in his
decision so that will help in understanding the employees so that we will be motivated to do the
work effectively. It is essential for every leader that they should follow the qualities and features
of a good leader that will help in leading the employees easily like Warren Buffett is a
committed and effective leader.
Events which shaped the leadership approach of Warren Buffett.
Warren Buffett has made his accomplishment by stabbing to his ethics and financing
money in the share market. In 2017, according to Forbes, he was 2nd richest person whose
holding was estimated about $75 billion. While investing he always keeps in mind that he will go
against the gain. People follow his investing strategies which he talks in public speaking. In
1972, Berkshire Hathaway bought a candy store for 25$ million when its net income is $4.2
million per year and it was not great for the economy. Warren Buffett applied his leadership
skills and knowledge for growing the company and since then the company is earning 1.5 billion
dollar profit every year15. This makes followers to get attracted towards him in making the
14 Farling, M., Stone, A., & Winston. B. (1999). Servant leadership: Setting the stage for empirical research. Journal of
Leadership Studies, 6(1-2), 49-72.
15 Cunningham, L. (2002). The Essays of Warren Buffett. Wiley.

Leadership principles 7
strategies like him in achieving the objective of the organization. His investments focus on
intrinsic value and simplicity.
Warren Buffett started earning at a very young age. He has learned and understood the
importance of being calm while investing. At the age of 13, he started the recording of his
income and also started filing taxes from the money he earned after distributing newspapers
every morning almost 500 newspapers were delivered by him16.Warren Buffett who acted as a
financier and facilitator for many as he helped in many businesses when the recession happened,
he financed and borrowed amount to other firms who were facing financial tragedy in their
business.
Buffett acquired the Berkshire Hathaway we wanted the employees to act as owners and
did not controlled them in how they are working. He states his rules and principles in the
Owner's manual which is provided to guide the employees and giving the right direction to
employees. This helped the managers to work in their own manner towards achieving the
objective of Berkshire Hathaway17. When we talk about the charity, in 2018 roughly $3.4 billion
of company stock are given by him to 5 charities, which is the billionaire’s largest donation has
been made. He has made more than $30.9 billion in donations to charities. He has supported
many charities like Bill and Melinda Foundation, Animal Rescue Foundation and many more.
Negative Aspect of Warren Buffett
Every person has something negative aspects and had some failures also before reaching
and accomplishing the objectives. Warren Buffett’s who is billionaire also has negative aspects
in his life. In life, he is very slow in making personnel changes like in his subsidiaries he is not
bothered that managers are doing work correctly or not and if they are not performing,
sometimes he is very slow in making the change as he waits too long on one manger. As one of
the blunders made in Apple shares when one of the investment managers in the office sold three
million shares of apples without his consent18. Also, he never keeps track on how much money
16, Kelly. (2011). Exercising Leadership Power: Warren Buffett and the Integration of Integrity, Mutuality, and Sustainability.
From Critique to Action: The Practical Ethics of the Organizational World, 295(316), 295-316.
17 Hagstrom, R. (2013). The Warren Buffett Way. John Wiley & Sons.
18 Schilling, J. (2009). From ineffectiveness to destruction: A qualitative study on the meaning of negative leadership.
Leadership, 5(1), 102-128.

Leadership principles 8
he sends to subsidiaries as he trusts blindly on the companies CEOs, even he is not bothered to
double check that a company exists or not and never makes any visit to his subsidiaries. He itself
acknowledges that when he leaves companies on the manager to run, in that situation something
may go wrong. So, it is necessary for the leader to overview the business and employees on a
regular basis.
To conclude the discussion, it is stated that leadership plays a major role in business so it
should be adopted by every organization to run the business smoothly. The leader must follow
the leadership skills to meet the employee's expectation and that will help in achieving the
objective of the organization. Warren Buffett fulfills all the qualities of being a good leader
whether by motivating their employees in every possible way or to stay calm in a stressful
situation. He is a very humble man which makes him achieve success. He has very good people
management skills as he knows how to influence and empower them. He is very efficient in
making a decision and also considers the employees in making a decision after taking the
employees views.
He has a personality to whom people trust and see him as confident, motivated, and calm.
We had studied his leadership style of servant leadership, democratic leadership, and self-
empowered leadership. He always wants to reach to the society by public speaking and doing
charity to various foundations. Also, Warren Buffett negative aspects as in business he is least
bothered in getting into his subsidiaries that even they exist or not. We got to know about Warren
Buffett as a leader and how much he is dedicated towards his work.
Reference
Cunningham, L. (2002). The Essays of Warren Buffett. Wiley.

Leadership principles 9
Finkle, T. (2010). WARREN E. BUFFETT AND BERKSHIRE HATHAWAY, INC. Journal of
the International Academy for Case Studies, 16(5).
Zaccaro, S., Rittman, A., & Marks, M. (2001). Team Leadership. The leadership quarterly,
12(4).
Connors, R. (2010). Warren Buffett on Business: Principles the saga of Omha. John Wiley &
Sons.
Farling, M., Stone, A., & Winston., B. (1999). Servant leadership: Setting the stage for empirical
research. Journal of Leadership Studies, 6(1-2), 49-72.
Hagstrom, R. (2013). The Warren Buffett Way. John Wiley & Sons.
Kelly, (2011). Exercising Leadership Power: Warren Buffett and the Integration of Integrity,
Mutuality, and Sustainability. From Critique to Action: The Practical Ethics of the
Organizational World, 295(316), 295-316.
Miles, R. (2003). The Warren Buffett CEO: Secrets from the Berkshire Hathaway Managers.
John Wiley & Sons.
Miles, R. (2004). Warren Buffett Wealth: principles and practical methods used by the world's
greatest investor. John Wiles & Sons.
Morgeson, F., DeRue, D., & Karam, E. (2010). Leadership in teams: A functional approach to
understanding leadership structures and processes. Journal of management, 36(1), 5-39.
Mumford, M., & Marks, M. (2000). Development of leadership skills: Experience and timing.
The Leadership Quarterly, 11(1).
O'Loughlin, J. (2011). The real Warren Buffett: Managing capital, leading people. Hachette UK.
Page, V. (2019). Warren Buffett: Success Story. Retrieved from Investopedia:
https://www.investopedia.com/university/warren-buffett-biography/warren-buffett-
success-story.asp
Pearce, C., & Manz, C. (2005). The new silver bullets of leadership: The importance of self-and
shared leadership in knowledge work.
Rubin, E. (2013). Assessing your leadership style to achieve organizational objectives. Global
Business and Organizational Excellence, 32(6), 55-66.
Schilling, J. (2009). From effectiveness to destruction: A qualitative study on the meaning of
negative leadership. Leadership, 5(1), 102-128.

Leadership principles 10
Woods, P. (2004). Democratic leadership: drawing distinctions with distributed leadership.
International journal of leadership in education, 7(1), 3-26.
Zehndorfer, E. (2013). Leadership: A critical introduction. Routledge.