Warren Buffett’s Scorecards
Reading the news of Warren Buffett’s impending retirement from the CEO role at Berkshire Hathaway caused me to revisit Alice Schroeder’s biography The Snowball: Warren Buffett and the Business of Life. My favorite passage from the book is an anecdote about why judging your life with an authentic value system is so important. He said:
“The big question about how people behave is whether they’ve got an Inner Scorecard or an Outer Scorecard. It helps if you can be satisfied with an Inner Scorecard. I always pose it this way. I say: ‘Lookit. Would you rather be the world’s greatest lover, but have everyone think you’re the world’s worst lover? Or would you rather be the world’s worst lover but have everyone think you’re the world’s greatest lover?’ Now, that’s an interesting question.
“Here’s another one. If the world couldn’t see your results, would you rather be thought of as the world’s greatest investor but in reality have the world’s worst record? Or be thought of as the world’s worst investor when you were actually the best? [...]
“If all the emphasis is on what the world’s going to think about you, forgetting about how you really behave, you’ll wind up with an Outer Scorecard.”
As I wrote recently, the transition from having an outer scorecard to an inner scorecard is often the unlock for people’s ability to pursue authentically rewarding paths.
What I hadn’t remembered from The Scorecard was Buffett’s reaction to Bill Gates’s suggestion that he learn to use a computer. “I said, I don’t know what it’s going to do for me. I don’t care how my stock portfolio is doing every five minutes.”
For Buffett, the reaction was related to his investing approach of buying and holding companies for the long term, and, I’d speculate, the friction of adopting new technologies that almost all of us experience as we age.
But if you think about just how much of the outer scorecard pressure to compare ourselves to others comes via our electronic devices, one could easily apply that lesson to what it takes to keep an inner scorecard! It’s not just having your own value system—it’s protecting it against a constant inflow of outside influences that can distract us.
Leadership Wisdom
“Basically, when you get to my age, you’ll really measure your success in life by how many of the people you want to have love you actually do love you. I know people who have a lot of money, and they get testimonial dinners and they get hospital wings named after them. But the truth is that nobody in the world loves them. If you get to my age in life and nobody thinks well of you, I don’t care how big your bank account is, your life is a disaster.”
— Warren Buffett, from The Snowball
Something Fun
A friend and his HBS classmates had a small group discussion with Buffett at the Berkshire Hathaway annual shareholders’ meeting. Buffett gave this advice on marriage: Only one person in a marriage is marrying up. Your goal is to make sure that’s you.
Wise man.