Customer Reviews

The Warren Buffett CEO: Secrets from the Berkshire Hathaway Managers

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I have always had a strong passion for reading biographies. I think what attracts me to them is the lessons that the reader can take away and apply to their own lives. With this interest in mind, combined with my strong interest in Berkshire Hathaway, I eagerly awaited the publication of The Warren Buffett CEO. I was anxious to see what lessons and insights I could learn and apply to my own path through life.

I found the book to be an extremely enjoyable read. It provides a richness of detail and previously unavailable insight on the mangers that make the subsidiaries of Berkshire Hathaway such a remarkable group of exceptional performers. It was also refreshing to see Mr. Buffett receive credit for being the outstanding manager he truly is. Almost all of the attention he receives focuses on his investment prowess and disregards completely his abilities as a manager. As this book will show you he is simply a tremendous manager who is able to inspire his mangers to continue working to produce results that will make him, and Berkshire shareholders, proud. He is able to achieve this even when the majority of the managers certainly no longer have a financial need to continue working.

Mr. Miles has grown as a writer and has given us all an excellent tool that provides many insights into what it takes to be a good manager, the dedication and drive it takes to succeed, and what to focus on when trying to create, and grow, an enduring customer centered business.

Skim through the back of the 2002 annual report, and you'll see a list of the dozens of operating subsidiary companies within Berkshire. To my knowledge, this book covers the managers of these companies in more depth than any other book. It is essential to learn about these managers because among them will be chosen the successors of Mr. Buffett. Personally, reading this book gives me confidence in the future of Berkshire in the post-Buffett/Munger era. I especially liked the chapter on Ajit Jain, who has not been covered by other books. This book is an absolute must read for those planning on holding their Berkshire shares forever.

Robert Miles knows Warren Buffett, and it's clear that he also knows a thing or two about the people who run the companies in Buffett's Berkshire Hathaway. Armed with information gleaned from eight months of intensive interviews, Miles uncovers what makes a Berkshire manager tick, and covers the workings of Berkshire, itself, as well. Writing through the voices of the CEOs he portrays, Miles skillfully weaves the colorful histories of 18 firms into a revealing set of success stories. Many tales are similar - the CEOs love their companies; they worked hard to build solid businesses and no one regrets selling his firm to Berkshire. They all sound genuinely happier than you might possibly believe, and each chapter has business models you shouldn't miss. We invite any executive to enter these pages for an insider's view (still, it doesn't hurt to remember, they all knew Warren was gonna read it).

Miles is obviously a bad writer, evincing the linguistic grasp of a C- ninth grader, and his substance suggests he's a lousy investor as well. It is a good idea to ask whether the managers of Berkshire Hathaway companies share unifying traits and it would be nice to evaluate the lessons to be drawn from whatever answer the question yields. That inquiry, which I thought this book would pursue, is lost in this numb writing, muddled in the poor execution. Too bad.

From the outset I had the feeling that this book would be something special. In a typical Buffett book the author sits back in his armchair, reads some historical Berkshire annual reports and then attempts to rehash and paraphrase the words of Buffett. Miles has taken the effort to physically travel across the country to interview some of Berkshire's finest managers. If Buffett is the brains of the organisation, then his managers are its heartbeat. They keep its lifeblood, namely cash, pumping through the organisation on a daily basis. This book provides some penetrating insight into one of the most important yet arcane aspects of company valuation, which is evaluating quality of management. Some of my notes on the CEOs follow:

Tony Nicely, head of operations at GEICO - The most striking thing about Tony is that he treats GEICO as his company even with no direct share ownership. The company forms an integral part of his life and when that type of manager is combined with a high quality business the results are very potent

Lou Simpson, investment manager at GEICO - Lou has an edge because he is able to obtain differential insight into a company which has not yet been factored into the share price. He maintains this edge by thinking and reading voraciously. He is in the office by 6am and stays until 7:30pm - that is a lot of reading and thinking, almost certainly more than his competitors. He evaluates companies both qualitatively and quantitatively, he is interested in both the business and the people

Ajit Jain - Ajit is obviously a very intelligent man since he is charged with pricing super catastrophe insurance. Yet he says "I can take a deal that I've spent 10 days trying to analyse and give it to him, and in 5 minutes he's two steps ahead of me...Warren is a lot smarter, he has a lot more experience and he can make judgement calls. There is no dimension I can think of where I am anywhere close to where he is"

Rose Blumkin - Once again the incredible work ethic shines through and it is emphasised that Buffett invests in people first and businesses second

Frank Rooney, CEO of H. H. Brown - When acquiring the business, Buffett said "Don't any of that stuff from Goldman Sachs, just send me the audited numbers for the last couple of years". Rooney says "Warren hadn't seen a factory and he hadn't met any of the people. Why the hell did he buy a shoe company". Warren subsequently said "Much of my enthusiasm for this purchase came from Frank's willingness to continue as CEO. Like most of our managers, he has no financial need to work but does so because he loves the game and likes to excel"

Melvyn Wolff, Star Furniture - This interview illustrates Buffett's meticulous eye for detail. In examining three years of financial statements he observed and queried a slightly different wording of a footnote between one year and the next. This shows his incredible memory and recall. The interview also provides some insight into his valuation methods. Regarding the furniture business, the author mentions that Buffett purchases the company valued "at its current annual sales"

Susan Jacques, Borsheim's - Buffett needed only 10 minutes and five questions to determine his purchase price "What are sales? What are gross profits? What are expenses? What's in inventory? Are you willing to stay on?"

My primary criticism is that the book seems unbalanced. Not one negative thing was said and although working for Berkshire must be very good I can't imagine it is perfect. I think a review of mistakes can be just as insightful as review of the wonderful aspects and I'm disappointed that this was not present. Overall a recommended read.

The book has a lot of interesting stories about managers at Berkshire Hathaway. It's not much about Warren Buffett. And it has nothing to do with investment.

Robert Miles has gifted us with a tremendously rich and well researched book on the management genius of both Buffett and his organization. This book is best described as a study case of high grade management teams and the business tenets they live by to succeed. Investors will better understand the intangible benefits of good operating managers and the very tangible rewards they produce for businesses. For students and lovers of business: It's a treasure map to success! I'd give it 10 stars if I could... Lots of new material not covered before by other authors including a super rare interview with Lou Simpson of GEICO! WOW!

Not too many secrets are revealed in this book as the title implies. The chapter on Lou Simpson is great! The rest of the book is only mildly interesting. This book is worth reading but probably only for Berkshire enthusiasts.

If you own Berkshire Hathaway, it is worthwhile to buy this book. After reading it, you will be incredibly impressed by the all star managers (business boy scouts) Buffett has working for him. And you will never have to worry again about what happens after Buffett (may this not happen during my lifetime).

By piecing together the various aspects of the individuals, you'll begin to understand the type of people Buffett finds "honest and competent." One of the harder aspects of investing is evaluating management--this is an insight into how Buffett thinks about business people.

For the investor, the section on Lou Simpson (since so little is written) might be worth the price of admission.

However, there are many investment books I'd read before this one.

Many books have been written on Warren Buffett's equity investment style. This book takes a different approach and describes Warren Buffett as a manager. Berkshire Hathaway is nothing but a holding company or an investment vehicle. The success of Berkshire Hathaway, and therefore, its shareholders is directly tied to the success of the underlying companies. The author did an excellent job of sharing the story of Berkshire Hathaway from the eyes of the CEOs and managers of its underlying companies. Whether you are an investor or manager, you will learn plenty from this book. I wish that more CEOs learned at least some of the lessons from Warren Buffett. He truly is an inspiration.

- Mariusz Skonieczny, author of Why Are We So Clueless about the Stock Market? Learn how to invest your money, how to pick stocks, and how to make money in the stock market