Warren Buffett Profile & Analysis Warren Buffett

Warren Buffett Profile & Analysis Warren Buffett Warren Buffett as an entrepreneur is a vexing case as many people view him as a hero of entrepreneurship while others view him as an example of entrepreneurship run amok and/or as a man that engages in behaviors and tactics that run extremely counter to the proper characteristics of entrepreneurship. This report will cover all of that and more. Some introspection towards of the author of this report will cover as well.

Criticism & Review of Warren Buffett No one can deny the impacts that Warren Buffett has had on the fields of business and entrepreneurship. However, other people greatly debate and even condemn the perception of how Warren Buffett has reached the heights he has gotten to. Warren's penchant for being a savvy investor that snags upstart companies and turns them into powerful organizations is viewed as opportunistic by some and some view Buffett as an opportunist rather than an actual innovator.

However, Buffett's track record over the years cannot be denied or minimized because it is what it is (Taylor, 2008) Even if what Warren Buffett has done during his life as a business and investment magnate is technically within the realm of entrepreneurship, that does not make it any less controversial.

After all, the Merriam-Webster definition of entrepreneurship is "one who organizes, manages, and assumes the risks of a business or enterprise." Note that there is not much said in that definition about creation and how one stays on top and that is a huge part of the Warren Buffett story (Taylor, 2008). One reason Warren Buffett is perhaps not the best example, at least to many, of entrepreneurship is that he does not generally create businesses from scratch.

For example, the Midwest furniture giant Nebraska Furniture Mart was not a Buffett creation. Rather, NFM was created in 1937 by Rose Blumkin and it operated completely independently of Buffett and Buffett's Berkshire Hathaway for nearly half a century. That did not change until Berkshire acquired a controlling interest in 1983. Even to this day, the chain only three stores nationwide (with a fourth pending) but the stores are huge and do massive business (Livy, 2013).

Conclusions Drawn There are several salient and fairly easy (albeit somewhat controversial to some) conclusions that one can draw about Buffett entrepreneurship style and form. As a general summation, the basic strategy is to do what you have to do to excel as an enterprise. One should pay no major attention or give any credence to your detractors that are condemning you even though you are adhering to the law and basic accepted ethics.

The author of this report is not giving a green light to the idea of "do it if it's not illegal" but there is nothing wrong with taking advantage of an angle if one exists. Even Buffett has had to steer clear of his own officers perhaps not complying with the law and this resulted in Buffett having to cut ties with one of this lieutenants for that very reason (Ovide, 2011).

Even if the patents of others have to be licensed (or purchased) to get where one needs to get and/or you are simply perfecting the idea that someone else created, that does not mean that it's wrong to take that step if it exists. For example, before Facebook was the monster it is today, MySpace was already well-known but Facebook perfected the craft and took over the territory that MySpace once basically had to itself.

For anyone to condemn Zuckerberg for doing that is simply being silly and naive as he did nothing wrong and he gave the market something that it wanted (Byrne, 2012). Another conclusion is that while luck is not what leads to success, per the Sir Alan Sugar quote given for this assignment, it does help to know what one is getting into in terms of competition and the current marketplace. Another helpful tidbit is to have a sense of where the market is going.

For example, Netflix had to know that the demand was there and that there was not enough supply to get the foothold they did. MySpace had to know about the hunger for greater online social connectivity when they came to be and the Facebook perfected the art to usurp MySpace (Martinez, 2012). In a similar vein, overall personal goals and aims are important as well.

Warren Buffett obviously wanted to be a huge figure in business investment industry and similar things can be said for the exploits of people like Rockefeller and Bill Gates, but not everyone wants that level of success and/or is simply not worried about it. However, people that aim much lower should not be chastised or condemned (Campbell, 2011).

As long as these people know where they want to be, are common-sense and non-whiny about the work it will take to get there and are content with the outcome that matches the effort they put in, then no one can really judge that person because they reaped what they sowed from an entrepreneur and "lot in life" standpoint and that is as it is should be (Campbell, 2011).

The late and great Peter Drucker certainly had some observations and beliefs that are relevant to Buffett's ascent to the stratosphere of industry. Just like the mentions throughout this report that intertwine entrepreneurship with ethics and other lines of sociological thought, Drucker did much the same thing. In fact, he went so far as to intertwine topics like history, psychology, philosophy, culture and religion. It is not unlike many other business and entrepreneurship minds that have done the same with the Art of War by Sun Tzu ("Talking Point," 2007).

Rather than the cut-throat nature of Sun Tzu's body of work, Drucker took a more pragmatic and positive approach. One such example is depicted and show in Appendix I of this report, that being management by objectives. A circular diagram is what comprises this framework and it has five major parts. Those parts, in order of the appearance on the circle, are strategic plan, tactical plan, unit objectives/improvement plan, individual manager's key results and improvement plan and lastly review and control.

The circle continues as it is an ongoing process that should never stop because lack of innovation is death, in the words of Drucker and many other entrepreneurs (Drucker, 1999)(ProvenModels, 2013). The lesson here is a good one. Improvement and strategy has to be an ongoing and never-stopping process. The whole idea of "evolve or die" is certainly valid, even if the "die" part is not immediately, but it can often be too late if a business gets too far behind the strategy or technology curve.

As such, any reasonable means to keep up with the sometimes frenetic pace of technological and business/industry structures are vital. Processes and products should always be assessed and review, should always be compared to that of competitors and the proper niche and management structure has to be in place to keep it all together. This is precisely the sort of thing that Drucker's management by objectives framework is meant to address (Drucker, 1999).

Drucker went to so far as to use those other subjects to give lessons on management, entrepreneurship and doing both of them extremely well. However, Drucker was not in lockstep with private industry doing whatever they want so long as they stay within the law. For example, Drucker held that CEO's should never make more than 20 times what the rank and file members of a firm make and he was greatly offended at the huge rise in executive pay that occurred within Fortune 500 companies.

He was on the record as condemning the practice as far back as the mid-1980's (Wartzman, 2009). Many people conflate Drucker with American business thinking but that is simply not the case and the above mention of being against exorbitant salaries for executives is just the tip of the iceberg. Japanese minds love the teachings and musings of Drucker for example.

Even so, there are common threads and beliefs that links all industrialized countries together but there are also a lot of different beliefs about entrepreneur principles and general ethics (Wartzman, 2009). Despite his reputation, Mr. Drucker (just like Buffett) has been criticized for being non-factual and that his predictions often do not come true. For example, he believed the nation's financial center would shift from New York City to Washington DC and that has not happened.

Even so, even people like Drucker and Buffett sometimes make wrong assumptions or guesses about what the future holds (Drucker, 1999). Drucker, also like Buffett, was not afraid of his detractors and was not afraid to say things that were unpopular. For example, Drucker was not a huge fan of General Motors and this was true long before General Motors was nearly eviscerated by bankruptcy during, and its slow death spiral prior, to the Great Recession of 2007-2009.

Similarly, Buffett wielded his entrepreneurship skills in ways that made him a lot of enemies even if it made him very rich and very successful. Warren Buffet and his peers (the few that exist) have sat on the same stage more than once but that does not mean they get along or that they like one another (Drucker, 1999). Something Drucker latched onto, and Buffett certainly did as well, is the concept of the knowledge worker.

Being knowledgeable about one's work and industry is part and parcel of anything resembling the computer industry because releasing and adapting products in absence of that is a terrible idea. It's even more relevant and pressing for industries that are almost entirely knowledge-based like accounting/taxes and the law (Bang, Cleemann & Bramming, 2010). Another framework, different from the Drucker one noted above, that is worth mentioning in this work as well is the Timmons Model for Success, which is show in Appendix II of this report.

This model is a little more free-form and complex than Drucker's management by objectives but a lot of the same pieces are there and are articulated more specifically. The model is a loose triangle formed by resources, opportunity and the personnel and the motivations behind them. Part of this dynamic are subjects like leadership, risk, uncertainty, creativity, asymmetries and context. Even things like market imperfections and the overall business plan are included in the calculus for this model.

This is not unwise as all of those thing should be taken seriously. The center of the triangle shows fits vs. gaps, which speaks to getting the right people doing the right things at the right times and identifying any deficiencies or gaps in any of the above. Fits are situations where the right person or knowledge application is present and gaps are when something is missing (MatterPlanet, 2013).

Because the United States economy is so centered nowadays on knowledge amassing and building, it behooves anyone in a knowledge-based industry would be wise to keep on the cutting edge of technology and innovation, whether it be within one's own firm or outside of it. Failing to always evolve and improve is the death knell if a knowledge-based entrepreneurship venture. This is something that Drucker had right and it is also something that Buffett has proven to know quite well over the year.

He got into computers in the 70's and 80's and then sought out to meet the needs and desires of future computer owners while at the same time realizing his own dreams and aspirations (Bang, Cleemann & Bramming, 2010). Another lesson is that while organic and internal growth is preferable and probably best, acquiring companies on the ascent is also not a bad idea. Buffett is a notorious entrepreneur that does this and he in fact has done it over and over again.

Buffett and his Berkshire group take established and rising companies that will easily and obviously stand to have a great market presence and wield their already vast resources to make that growth happen even faster (Salwan, 2009). Alternatively, though, inorganic growth that leads to too much disparate operations and ventures in general outside of the core operations of a group is usually not a good thing.

IBM, for example, has touched many realms of the computer and software market but they intentionally left the personal computer market by selling that division to another firm (Lenovo) so that they could focus more on their core competencies (Salwan, 2009). Personal Profile The author of this report took the GET and a few other self-assessment and came to a few conclusions. Before getting to those conclusions, the author will first describe the results.

The test has five sections that each cover a different dimension of the author of this paper's business motivations, psyche and habits. They are, in order, need for achievement, need for autonomy/independence, creative tendency, moderate and calculated risk taking, and drive and determination. On the need for achievement, the author of this paper scored a 10. The maximum score is 12 and the average is 9.

The author of this paper greatly agrees with that score because the author is greatly motivated and driven to succeed and thrive and is not content to just spin the tires and stay in one place. The need for autonomy and independence was a score of 3, which is just below average and exactly half of the maximum.

The author of this report would agree with that as well since the author does not have an aversion to autonomy but is also alright with subverting to a manager or leader so long as the leader is competent. The creative tendency score was 5, which was fairly below average. The author of this report is not a terribly creative person but is willing to think outside the box if it's clear the current way of doing things is lacking or failing.

The moderate and calculated risk taking score came in as a 7, which was slightly below average. The author of this paper is willing to take risks but is never itching to do so and will not do so unless there is a pressing need that exists. The final dimension was drive and determination, which came in as a score of 11 under a maximum score of 12.

This also dovetails nicely with the mindset that the author of this paper has and the author greatly agrees with that score and what it means. The author of this report believes that the basic foundations needed are there. One has to know the market that is potentially being entered, what the consumers of that market want and what/how they existing players in the market are (or are not) delivering what is desired by the consumers.

The key to becoming the next Warren Buffett, Bill Gates, Steve Jobs or other business and/or technology magnate is being able to pounce on an opportunity where a market need is not being fulfilled at all because it's in the nascent stages or because no existing player has made their move effectively. This is exceedingly difficult to do but it is not a matter of sheer luck. Becoming someone akin to Warren Buffett is not something that someone just falls into or does by accident.

It takes a lot of hard work, a lot of research and a lot of self-awareness. Even so, one does not have to be the next Warren Buffett to be successful and live a fulfilled life. Some people want to be the next Warren Buffett while others just want to be a CPA or a plumber. One can still have one's own enterprise in such a scenario, even if the enterprise is on the smaller size.

In reviewing and recognizing that, the author of this paper realizes that one key is that the author has to define what success is and the determine what all will be required to get there. After all, not everyone wants or needs to be the next titan of industry but there has to be a calibration and synchronization between what is desired and what is deemed necessary to reach that desired end.

The author of this report will have to figure out what personal entrepreneurship goal that is desired to be achieved and then laying out a course to meet that. The author is prescient enough to know that the next Warren Buffett is not in the work but that is just fine because the author could fall well short of that and be perfectly happy. As long as the future enterprise is stable, successful and fulfilling, that is what really matters to the author of this report.

Another dimension in being a good entrepreneur and a good person is not to take the ambivalence about others' thoughts and viewpoints too far. It is possible to be too indifferent about the thoughts of others and there are situations where those feelings do matter. Obviously, customers should never be taken advantage of. It is indeed proper and decent to set a reasonable market price but to exploit people and take unfair (or illegal) advantage.