VISIT ZEUSCOACHING.IN

GET YOUR PERFORMANCE METRICS RIGHT

Learn from the Oracle of Omaha

Warren Buffet, Chairman and CEO of Berkshire Hathway is widely accepted as one of the most savvy investors. Since 1977, he has been publishing an Annual Letter to all his shareholders. This letter is widely read by business leaders for its robust common sense and insights into the emerging future. Buffet has this to say in the opening part of his 2019 letter.

“Long-time readers of our annual reports will have spotted the different way in which I opened this letter. For nearly three decades, the initial paragraph featured the percentage change in Berkshire’s per-share book value. It’s now time to abandon that practice.

The fact is that the annual change in Berkshire’s book value – which makes its farewell appearance on page 2 – is a metric that has lost the relevance it once had.”

In subsequent paragraphs, he goes on to explain why the particular traditional metric is no longer relevant, citing changes within the business as well as in the external environment. The letter is in the public domain, and you could access it in the link provided below.

You are heading a large business, with many stakeholders. Your business too has gone through and is going through, many changes, both within and without. Wouldn’t it be useful to ask yourself the following questions?

  • Who are all our stakeholders?
  • What are the metrics by which they are measuring our performance today?
  • How many of them continue to be relevant?
  • What are the new metrics which are important today and going forward?
  • How do I persuade our stakeholders to shift to the more relevant metrics?

Do let us know what you think!

– by Ravi Santhanam for ZEUS

For more: http://fm.cnbc.com/applications/cnbc.com/resources/editorialfiles/2019/02/23/Berkshire%20Annual%20letter.pdf 

https://www.verizonconnect.com/resources/article/how-to-measure-business-success/

Next Week: Leadership lessons from Golf  1 of 3

More from Ravi Santhanam

2 Comments

  • MAHESH NANDURKAR

    August 8, 2018 at 7:26 am

    Absolutely agree….bag on target….Great enterprising leaders would indeed follow Lesson 2 to their heart ..”The leader / manager should be more like a film director than an army general. Cajole performance from talent rather than command”.

    Reply
    • Ravi Santhanam

      Ravi Santhanam

      August 24, 2018 at 3:18 pm

      Thanks, Mahesh. Great choice of words “Cajole Performance”! Is it ok if I were to post a blog with that title? Of course, I will give you credit for the wonderful title.

      Reply

Leave a comment