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Turns out, Charlie Munger was no sidekick after all.
That's the message Berkshire Hathaway CEO Warren Buffett sent, loud and clear, in his new letter to shareholders. The letter begins with a tribute to Munger, who served as vice chairman at Berkshire Hathaway for decades before passing away a few months ago.
But while the media often portrayed Munger as playing second fiddle, and Munger himself often deferred to Buffett publicly, Buffett used his letter to set the record straight.
"Charlie never sought to take credit for his role as creator but instead let me take the bows and receive the accolades," writes Buffett.
"In the physical world, great buildings are linked to their architect while those who had poured the concrete or installed the windows are soon forgotten," Buffett continued. "Berkshire has become a great company. Though I have long been in charge of the construction crew, Charlie should forever be credited with being the architect."
Charlie should forever be credited with being the architect.
With those nine words, Buffett not only honors his friend and business partner, he teaches a powerful lesson in emotionally intelligent leadership--both on his part, and the part of Munger. Let's take a closer look at the lessons revealed by Buffett's tribute, and see how you can apply them to your own business. (If you find value in this lesson, you might be interested in my free emotional intelligence course, which provides a new tip for building emotional intelligence every day for a week.)
Buffett and Munger met in 1959 when they both attended the same dinner.
"I think Warren felt that Charlie was the smartest person he'd ever met, and I think Charlie felt Warren was the smartest person he had ever met," Buffett's first wife, Susan, said when recalling that dinner.
They became fast friends, often talking multiple times a day over the phone. When Buffett bought a controlling share in Berkshire Hathaway, which was a rundown textile manufacturer at the time, Munger told Buffett it was a dumb decision.
"But, he assured me, since I had already made the move, he would tell me how to correct the mistake," Buffett relates.
And correct it they did. Buffett's investing philosophy, which he learned from his hero, investor Ben Graham, was to buy "fair businesses at wonderful prices." But Munger advised Buffett that strategy wouldn't work at scale, and recommended he instead "add to it wonderful businesses purchased at fair prices."
Some years later, Munger joined Buffett at Berkshire. Together, they grew the company's portfolio to billions of dollars in value.
This story illustrates the power of humility in business.
Buffett was humble enough to listen to a man six years his senior, who had used this strategy to grow his own investment portfolio--even though Munger's investments only slightly outperformed Buffett's, according to The Wall Street Journal.
Additionally, Buffett has long credited Munger for shaping his own philosophy, as well as creating the blueprint for Berkshire. But in his newest shareholder letter, Buffett honors Munger further, fully crediting him as the architect and imploring readers to remember Munger as a major reason for the company's success.
At the same time, though, Munger's humility shines through. Throughout his years with Berkshire, although Munger played such a large role behind the scenes, he was happy to let Buffett receive the credit and take the limelight--and he did so for decades.
So, what's the lesson for you?
Whether you're a founder or a co-founder, the boss or the adviser, the architect or the contractor, take a lesson from both Warren Buffett and Charlie Munger:
Speak openly and respectfully with each other, but don't get caught up in who gets the credit. Instead, figure out your role and strive to fill it. Then, find a partner who complements your strengths and mitigates your weaknesses.
Find your Charlie Munger. And when that person speaks, be darn sure to listen.
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A refreshed look at leadership from the desk of CEO and chief content officer Stephanie Mehta
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