Small is Big

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One of the most amazing things about Warren Buffett’s business, Berkshire Hathaway, is that it is very small in terms of staff comparative to other multi-billion dollar companies. Buffett has always kept his hand in the business and kept a very small handful of people around him to support him. This is so contrary to most large businesses out there.

I find it fascinating that such a large corporation is still being run by a handful of people. Buffett claims that by keeping his staff requirements low that BH is able to maneuver quickly in response to any situation. Anyone who has worked for a large corporation knows how long it takes to get anything done or approved. There is little autonomy to make decisions and everything must go through the proper channels.

One of the best places I worked was in the office of emergency plumber in Danville. I was answering phones, booking appointments and answering the few questions I could. I loved the job. I was in my early 20s and it was a great place to work. My boss was fantastic at supporting me so that I could grow in my confidence and abilities. He even showed me some basic repairs so that I could answer questions when people called. I wasn’t just guessing at the process, I knew the process. So, if someone mentioned their tap was dripping, I could talk about it likely being that the seal was gone and the ring needed replacing.

My next job after that was working at a university. I was again doing secretarial and administrative kinds of tasks but now everything had a process. There was no more “winging it” and just going with the flow. I found it frustrating and tedious. I couldn’t just walk down the hall to get a signature. I had to go through the “right” channels before I was permitted to get that signature. After 2 years, I ended up quitting. I just couldn’t take the bureaucracy anymore. I hated not being able to make decisions and just act on them.

Little surprise I am now working for myself. I love being able to make decisions on the fly even though they may be incorrect. I feel so liberated by this. I think that’s why I loved working at my plumbing job, it was small and allowed me autonomy to make decisions. And my boss was very supportive. I didn’t find much of that at the university.

I hope to keep my own business small once it gets bigger. I don’t want to be hiring employees all over the place. Buffett mentions that the staff he has act as if BH were their own company. They are invested in making it the best it can be. Large companies simply don’t have that. Some employees will be like this, but most will not. And that’s when poor customer service can creep in and bad decisions are made.

I like Buffett’s model. I’m not a conservative person by any means but I like his values with respect to his business—humility, keeping a tight network of good staff, staying small and staying involved. If these worked for him, they can certainly work for me.

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