投资管理公司Gardner Russo & Gardner合伙人汤姆•拉索在斯坦福拿到了法学博士/MBA双学位。他回忆了1982年巴菲特教他们投资课程时说过的话。“沃伦在班上反复说的那些和他现在的发言内容一模一样。他先介绍了投资方面的常规内容，然后又说，‘进行投资时你必须知道一点，那就是不可能跟坏人做成好生意’。”
的确，伯克希尔-哈撒韦几乎没有违背过职业道德，仅有的几次例外则验证了这条原则。乔治城大学法学教授劳伦斯•坎宁安著有《后巴菲特时代的伯克希尔》（Berkshire Beyond Buffett）一书。他举了本杰明摩尔涂料的例子。巴菲特在2000年收购了这家涂料生产和零售商。当时，他向经销商承诺，本杰明摩尔涂料将继续跟他们合作。这些经销商都是遍布美国的夫妻店，而非家得宝和劳氏公司这样的仓储型零售企业。坎宁安指出：“考虑到那些大型零售商的实力，在那段时间维持这种业务模式非常困难。”
How do you replace the irreplaceable?
It’s an especially salient question for Berkshire Hathaway and its 84-year-old Chairman and CEO Warren Buffett. Speculation about the company’s succession plan and what a post-Buffett Berkshire Hathaway will look like is mounting in advance of the company’s annual letter to shareholders, due in February, in which Buffett has promised to reveal his vision for the company’s future.
A panel of speakers, all intimately familiar with the company and its iconic leader, convened at Stanford’s Rock Center for Corporate Governance for a discussion titled “Berkshire Beyond Buffett: The Enduring Value of Values.” The panelists homed in on three core values that Buffett has used to guide his company: integrity, autonomy, and permanence.
In addition to Buffett’s unparalleled mix of investment savvy and business acumen, an unswerving commitment to these three values helped make Berkshire Hathaway one of the most successful companies in history, with a market capitalization of around $355 billion. And, the panelists agreed, by embedding those values deep into every level of his company from the beginning, Buffett has put Berkshire Hathaway in the best position to thrive after he hands off the reins — so long as any successor holds true to them.
A Reputation for Integrity
Tom Russo, partner at Gardner Russo & Gardner and a JD/MBA graduate of Stanford, remembers when Buffett spoke to his investing class in 1982. “The refrains that Warren touched upon in class are really the same things he talks about today,” Russo says. “He said all the standard investment stuff, but then he said, ‘When you’re making an investment, you have to understand one thing: You can’t make a good deal with a bad person.’”
Indeed, while Berkshire Hathaway is a vast conglomerate of 60-plus businesses of different sizes, in different sectors, and founded at different times, the subsidiaries are united by a commitment to conduct their business in an ethical manner, says Brad Kinstler, CEO of See’s Candies, one of the first companies bought by Berkshire Hathaway.
The right way to do things, Kinstler explains, is to imagine a football field, where if you go outside the lines, you are in the wrong. “Warren’s philosophy would be, ‘We want to play down the center of the field. We don’t want to get anywhere close to the out-of-bounds lines. We simply don’t need to, and for our reputation, it’s best that we don’t.’”
Indeed, the rare ethical breaches at Berkshire Hathaway are exceptions that prove the rule. Consider the example of Benjamin Moore Paint, says Lawrence Cunningham, author of Berkshire Beyond Buffett and a professor of law at Georgetown University. When Berkshire acquired the paint manufacturer and retailer in 2000, Buffett promised the company’s distributors that it would continue to work with them. These were mom-and-pop shops across the country, rather than big-box retailers like Home Depot and Lowe’s. “That’s a very difficult business model to sustain these days, given the power of those big retailers,” Cunningham notes.
So difficult that Denis Abrams, who took over as CEO of Benjamin Moore in 2007, was nearing a deal with Lowe’s in 2012 — until Buffett found out about it and fired him. “Now the current CEO, Mike Searles, is committed to that model and committed to keeping that Berkshire promise, which is so valuable. And he’s turned it into a competitive advantage, saying ‘We’re the only big paint manufacturer and retailer that’s selling through those old-fashioned distributors,’” Cunningham says.
The Power of Autonomy
While more than 300,000 people work for Berkshire Hathaway in its various subsidiaries, they are overseen by a mere 25 people — including Buffett and Vice-Chairman Charlie Munger — from corporate headquarters. This ratio of corporate overhead to company assets is almost unheard of in any business setting. What makes it possible?
As stated in the Owner’s Manual distributed to Berkshire Hathaway shareholders, when it comes to business decisions, “We delegate almost to the point of abdication.” This belief in autonomy has become one of the hallmarks of the Berkshire Hathaway brand.
“I think we’re successful not because he tells the managers what to do, but it’s what he allows us to do,” Kinstler says. “He allows us to make the decisions to run the businesses and develop that business as we see fit.”
This conviction from early on to let companies retain their identity and independence is a large part of what has made Berkshire Hathaway, as Russo calls it, “a virtuous home for people selling great businesses.”
Cunningham says that commitment to autonomy has been central to the company’s efforts to invite sellers. One example: After the 2008 financial collapse, companies like Goldman Sachs looked to Berkshire Hathaway for a stabilizing investment.
“Weren’t they going to Warren Buffett rather than going to Berkshire Hathaway? I think there’s obviously a huge amount to that,” Cunningham says. “But I think they went to him for reasons that are now identified as Berkshire culture: that autonomy.”
“In some ways,” Berkshire board member Sue Decker added, “the harder question is not so much the replication of the businesses themselves, but getting someone who can attract sellers in the same way that Warren has.”
The Promise of Permanence
One of the most powerfully communicated values of Berkshire Hathaway, the panel agreed, is a commitment to the long haul. In fact, Berkshire Hathaway has never, in its nearly 50-year history under Buffett, sold a subsidiary it acquired.
“That commitment of permanence is I think the single central value of Berkshire Hathaway. It’s one of the reasons why I argue the company’s built to last,” says Cunningham. “Sellers of businesses to Berkshire find that commitment extremely attractive, especially families who have built up a legacy and want to preserve the identity and entrepreneurs who are seeking security in the operation of their businesses through thick and thin.”
Cunningham also highlights the true strength of building a confederation of companies that share those core values of integrity, autonomy, and permanence. “Through a process of selective acquisitions of companies that have cultures that fit in with this family,” he says, “there’s an iterative reinforcing process of cultural sustenance. So long as everybody in the family embraces these values, and doesn’t deviate from them, it’s almost self-sustaining. People can screw it up, but the culture itself is surprisingly strong and durable.”
“The real danger,” Cunningham adds, “is activist shareholders who will pressure those successors to change that, to sell this subsidiary because it’s struggling, to tell this CEO to do better on this, that, or the other thing. He’s done everything you can possibly do to create an enduring company, but there will be pressures in the future.”