We Study Billionaires - The Investor’s Podcast Network

TIP697: The Secret to Buffett’s Business Success w/ Lawrence Cunningham

45 snips

Feb 7, 2025

Lawrence Cunningham, a renowned author and Director at the University of Delaware's Weinberg Center for Corporate Governance, dives into the essence of trust in organizational cultures. He shares insights on how Warren Buffett has cultivated trust at Berkshire Hathaway, revealing key traits of successful organizations. The discussion highlights the critical role of board governance, the consequences of trust breaches, exemplified by David Sokol, and the significance of adaptability in quality investing. Cunningham's perspective offers a fresh look at building robust, innovative corporate ecosystems.

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ADVICE

Buffett's CEO Advice

Hire outstanding CEOs.
Stay out of their way.

ADVICE

The Trust Test for CEOs

Find a CEO you can deeply trust.
Use the "son-in-law/daughter-in-law" test.

INSIGHT

Board Member Value

Be a sounding board and offer advice to the CEO.
Remind the company of shareholder interests.

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The essays of Warren Buffett

Lessons for Corporate America

Warren Buffett

This book is a comprehensive collection of Warren Buffett's annual letters to Berkshire Hathaway shareholders, edited by Lawrence A. Cunningham. It provides valuable insights into Buffett's investment philosophy, corporate management, and business strategies. The letters are organized into thematic chapters, making it easier for readers to understand Buffett's views on various topics such as value investing, executive compensation, and market fluctuations. The book is praised for its clarity, wisdom, and practical advice, making it a definitive source for understanding Buffett's approach to business and investing.

The Power Law

Venture Capital and the Making of the New Future

Sebastian Mallaby

In 'The Power Law', Sebastian Mallaby provides a riveting and meticulously researched account of the venture capital industry. The book delves into the history of tech incubation in Silicon Valley and worldwide, featuring key figures from firms like Sequoia, Kleiner Perkins, Accel, Benchmark, and Andreessen Horowitz. It covers iconic successes and failures, such as the birth of Apple and the rise and fall of WeWork and Uber. Mallaby also examines the 'power law' that drives the VC business, where a few massive successes compensate for numerous failures. The book highlights the industry's influence on innovation, its biases, and the rising competition from China's venture capital sector[1][3][5].

Margin of Trust

The Berkshire Business Model

Lawrence Cunningham

Stephanie Cuba

This book provides a comprehensive account of how Berkshire Hathaway operates, emphasizing the central role of trust in its managerial practices and organizational structure. Cunningham and Cuba detail the autonomy and decentralization that are core to Berkshire's culture, offer examples of how this model has been adapted by other companies, and discuss the risks and benefits of a trust-based approach. The book also explores Buffett's views on trust in business agreements, his criteria for great corporate boards, and the future of Berkshire after his leadership.