As a creative right brainer, I often marvel at the cool headed logic of an enlightened left brainer, and none more so than, Warren Buffett. Buffett’s genius is referenced throughout this blog (thanks Warren!).
Recently I have been reading Buffett’s biography The Snowball, hoping some of his genius will rub off on me. I note how Buffett learned to understand the world, by counting and calibrating it…keeping everything real and right sized.
Not surprisingly, Buffett’s business partner, Charles Munger and Buffett both regard rationality and honesty as the highest of virtues. Calibrating commercial successes and failures and hearing the absolute truth by counting the numbers, are behaviours, that allowed Buffett to practice these virtues in his business life.
Buffett and Munger used the process of inversion (a tool of algebra) as the way to derive the drivers of failure, by reflecting on the inversion of success. Through this process they came to understand quickened pulses and self delusion were the greatest causes of failure. Quickened pulses say our adrenal system is aroused, that our body senses the presence of a real or imagined predator.
There are a number of reasons why people do business with a quickened pulse. The first reason I constantly observe, and God knows I have fallen for this one myself, is to listen to the spin doctor. We have all met them, they groom you with their superficial glim charm at the beginning of the business relationship. They spin fantasies of the future that appeal to your dreams and aspirations, falsely claiming to have access to resources to achieve this, when they do not.
They can seduce you through mirroring you, pretending to have the same values and interests as you, they may even love bomb you, by soaking you in praise and adoration. The unsuspecting victim, which has been me, confuses the business relationship with friendship, and may even dispense with due process and written agreements. Little elaboration is needed to see how this ends in failure.
Another sign of the quickened pulse is our body telling us, we are in a high risk situation. It may be we are with someone who is talking things up. People who do so are taking you into a gambling situation without being honest about the risks and your quickened pulse is telling you the truth they are unwilling to own.
Just like the impulse to gamble, instead of pulling back, some people are drawn into the intensity and the adrenal rush of high risk business. These people need a mentor and a honest rational person to bounce ideas off before making big decisions. Just a simple policy like “no on the spot decisions” can stop the impulsivity of the adrenal rush and allow us to revisit the business opportunity with a cool head and some cold hard facts.
And finally self delusion, quite simply this means the absence of humility. This means thinking you are better or less than who you are. I cringe when I see those spruiker success coaches that play on unsuspecting and even desperate people, pumping up their self delusion that they can achieve things just by telling themselves they can. Those people who walk around imagining a Red Ferrari with a blonde in the passenger seat, to attract in success, instead of focusing on the execution of a sound business plan, are headed for trouble.
How do you know if your self image is based on self delusion? Ask the following questions: Where is the 10,000 hours to become a Master? Where are the commensurate market rates? What about peer review? What about benchmarks against competitive value propositions? Have you invested in the professional development that puts you on a level playing field with your peers? These are the processes you need to have in place to overcome self delusion and achieve the critical humility and Buffett cool headedness, to be successful in business.
We associated self delusion with grandiosity and yet it is just as frequently associated with people who make themselves and their business “small in the world”. If you grew up in a family system of professional egos, you may have made yourself small so they could “puff themselves up”. Fear of professional jealousy and combative competition is another reason people make themselves small or invisible in business. If you are too small, a personal branding exercise and being part of a professional group that gives feedback is an important investment in becoming “right sized”.
One way people keep themselves small, is by refusing to invest in the professional development required to keep themselves and their business, growing in value. You have to keep current. Far more importantly than doing overtime at the office, make an investment in keeping pace with the market and enriching your skills.
And when thinking success, remember the concept of rolling The Snowball from Warren Buffett’s biography, that is, success and wealth comes from the focus on day to day compounding growth, rather than the big fix.
Tell the truth and keep it real!
Louise Kelly
Managing Director
Hearts and Minds
Founder Thought Leaders Circle
Thought Leaders Circle 