Casey Lichtendahl / Darden
Proposal – Lead a student trip to Berkshire Hathaway’s 2010 Annual Meeting.
Student Selection – Three Darden first-year students will be selected to attend by John Colley and Casey Lichtendahl. Selection criteria will be based on the student’s organizational leadership potential.
Learning Objective – To gain first-hand insights into the methods of Warren Buffett, chairman of Berkshire Hathaway and one of the world’s leading conglomerate managers.
Preparation – Attending students will be asked to read Warren Buffett’s five most recent Letters to Shareholders and other selected Buffett writings.
Deliverables – Upon their return, attending students will be asked to co-write an article about their trip in Darden’s student newspaper.
Time, Location, and Events – First weekend in May of 2010 in Omaha, Nebraska. Reception on Friday evening, chairman’s presentation and subsidiary exhibits on Saturday, and shopping day on Sunday.
Projected Expenses – Airfare and lodging: 4 people x $499/person = $1,996. Food: 4 people x 3 days x $35/person-day = $420. Projected total trip expenses = $2,416.
Motivation – Although Warren Buffett has been known as one of the world’s greatest investors throughout most of his life, the motivation for this trip is to study his more recent successes in organizational leadership. To this point, Warren Buffett wrote in his 2006 Letter to Shareholders:
Charlie Munger – my partner and Berkshire’s vice chairman – and I run what has turned out to be a big business, one with 217,000 employees and annual revenues approaching $100 billion. We certainly didn’t plan it that way. Charlie began as a lawyer, and I thought of myself as a security analyst. Sitting in those seats, we both grew skeptical about the ability of big entities of any type to function well. Size seems to make many organizations slow-thinking, resistant to change and smug. In Churchill’s words: “We shape our buildings, and afterwards our buildings shape us.” Here’s a telling fact: Of the ten non-oil companies having the largest market capitalization in 1965 – titans such as General Motors, Sears, DuPont and Eastman Kodak – only one made the 2006 list.
In fairness, we’ve seen plenty of successes as well, some truly outstanding. There are many giant company managers whom I greatly admire; Ken Chenault of American Express, Jeff Immelt of G.E. and Dick Kovacevich of Wells Fargo come quickly to mind. But I don’t think I could do the management job they do. And I know I wouldn’t enjoy many of the duties that come with their positions – meetings, speeches, foreign travel, the charity circuit and governmental relations. For me, Ronald Reagan had it right: “It’s probably true that hard work never killed anyone – but why take the chance?”
So I’ve taken the easy route, just sitting back and working through great managers who run their own shows. My only tasks are to cheer them on, sculpt and harden our corporate culture, and make major capital-allocation decisions. Our managers have returned this trust by working hard and effectively.
For their performance over the last 42 years – and particularly for 2006 – Charlie and I thank them.
The second to last paragraph above is where students on this trip will be asked to focus their attention.