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Warren Buffett shares this thought exercise with students at the Terry College of Business:
“Pretend I’ve made you a great offer: You can pick any one of your classmates, and you get 10% of their earnings for the rest of their lives. What goes through your mind in deciding who to pick?”
He continues:
“You probably wouldn’t choose the person with the highest grades in the class. There’s nothing wrong with getting the highest grades, but that’s not the quality that sets apart a big winner from the rest. I think you’ll find that the decision comes down to a set of qualities that, interestingly enough, are self-made. It’s integrity, honesty, generosity, and the willingness to do more than your share.”
Then, he asks the class to pick a classmate to “sell short”:
“Who do you think is going to do the worst in the class? It isn’t the person with the lowest grades. It’s the person who lacks character.”
When Berkshire Hathaway hires people, they look for three things:
- Intelligence
- Initiative or Energy
- Integrity
Buffett explains:
“If they don’t have integrity, the first two will kill you. If you’re going to hire someone without integrity, you want them to be lazy and dumb. You don’t want them smart and energetic.”
He emphasizes that these qualities are based on habits:
“The person who always claims credit for things they didn’t do, cuts corners, or can’t be relied upon — those are habit patterns. And the time to form the right habits is when you’re young. Someone once said, ‘The chains of habit are too light to be felt until they’re too heavy to be broken.’ I see that all the time.”
Buffett concludes with a final thought:
“When you write down the habits of the person you’d like to buy 10% of, look at that list and ask yourself, ‘Is there anything on this list I couldn’t do?’ The answer will be no. And when you look at the person you’d sell short, and see the qualities you don’t like—like egotism or selfishness—ask yourself if you see any of that in yourself. If you do, you can get rid of it. It’s not ordained.”
Buffett explains that this exercise mirrors one Benjamin Franklin used:
“Ben Graham looked around and asked, ‘Who do I admire?’ He wanted to be admired himself and wondered why he admired those people. Then he thought, ‘If I admire them for these reasons, maybe others will admire me if I behave similarly.’ And he decided what kind of person he wanted to be.”
