Being the smartest person in the room makes everything easier. Unfortunately, most of us will never be the smartest person in the room or company. So how do you get ahead when you know there are other people around you who are smarter than you, or who simply know more?
Specialise. Learn what you need to know and then understand it completely. Make your knowledge matter. So much of management seems to forget what it’s like to be an employee working hourly and so they don’t know the struggles that job entails. Be the person who knows the company from the ground up. Say you’re managing a team of carpenters. What good is your managerial experience if you don’t know what a carpenter has to do day in and day out? How can you manage people you don’t understand? How can you make them successful?
Warren Buffett is one of the wealthiest men in the world, and is one of the most well regarded business mentors you can find. Forbes magazines considers his entire fortune to have been made through investment. While that’s not the whole story, it shows that Buffett knows what he’s doing in the business world. He didn’t become a billionaire by simply buying and selling stocks. He built Berkshire Hathaway into a wildly successful company and used its success to buy other companies. Warren Buffett doesn’t invest in stocks. He buys businesses. Because of that, he’s more interested in knowing how a business works and why it’s successful. He learns a business inside and out, to make sure he knows exactly what he’s getting and what he can do with it. I’ve collected some of his best business advice here.
1. Understand your business.
For your company to work, you need to understand it from the ground up, from the most basic to the most complex. If Buffett knows anything, he knows Berkshire Hathaway and that’s why he’s a success. He also never invests in a business he doesn’t understand. With your company, know it inside and out. If you become a success and come into the market for acquiring new companies, don’t just listen to advice or pitches. Make certain you understand how and why that company works or you’ll end up with a mess.
2. “Accounting is the language of business.”
Know your numbers. Everything a company does must be reflected by the accounting books. How well do you understand that end of business? How well do you understand that element of your ow company? Business is all about the numbers, and if you don’t know the numbers then you don’t know business. You don’t need to be your own accountant, but it’s absolutely imperative that you be financially literate.
3. Management is fundamental to success.
An entrepreneur can start a successful business, but it takes a great management team to sustain that company and make it grow. Buffett always pays a lot of attention to management because without good management, your business has nothing. Great management can turn a mediocre company into a great one, but bad management can take a hugely successful company and ruin it. This comes down to you as a hirer and owner. Management is there to take care of your business, and if they can’t do that, then you need to find someone who can.
4. Only work with people you trust.
Who is your partner? Who will you do business with? This is related to the previous one, but at a deeper level. You need to trust your employees, but you really need to trust and know your associates. Entering into a partnership is like a marriage. If things don’t go as planned, it will eat at that relationship, so pick a partner you have a long friendship with. Pick a partner with a positive outlook. Pick a partner who complements your abilities.
5. Think long term.
Today’s successes may be tomorrow’s failures. While there may be huge short term opportunities, be sure to understand where those lead. You need to look at your company and your interactions in terms of years, not in terms of months.
Warren Buffett won’t make you successful, but he gives you a roadmap. If you can follow his advice, you’ll be a step ahead of the competition. Know yourself. Know your business. Know your employees and partners and colleagues. Other CEOs may have flashier advice about success, but most of them aren’t the richest man in the world.