7 Coaching Lessons I Learned From Warren Buffett from Karl Bryan
“Tell me who your heroes are and I’ll tell you who you’ll turn out to be.” Warren Buffett
Warren Buffett isn’t known as a “business consultant” nor a “coach”… but I would beg to differ.
He’s the highest paid business consultant on the planet! He invests time and money with businesses that he believes he can improve or add value to.
At the age of 60 he was big news within in his own sphere of influence… but outside that circle, no one had really heard of him. Today, at the ripe age of 87 he’s like a rock star, signing autographs and posing for photos from one side of the planet to the other. What other industry (other than owning a sports franchise) can you go from relative obscurity to rock star signing autographs between 60 and age 87?
A career as a successful business consultant and coach is one to be celebrated. Congratulations if you’re a coach that’s taking this journey with us. You too can be signing autographs one day, posing for photos like a bigwig, if you stay with it and add INCREDIBLE value to those within your sphere of influence.
Back to Buffett – he knows a thing or two about consulting a successful business… and here are the best tips I’ve learned from the “Oracle of Omaha.”
1. Invest in yourself first
“The most important investment you can make is in yourself.” Warren Buffett
Investing in your own personal growth is the best activity you can undertake towards “success,” end of story. Effectively, that included anything that improves your own talent level, whether it’s gaining a higher level of education, attending effective training, improving on a skill that you already have or learning a new one like investing or growing a business.
Way too many people look to invest in others and/or their programs before backing themselves with their own money.
Along these same lines is the, “pay yourself first” concept. Everyone hears about it but very seldom do people act on it. Each month, pay yourself approximately 10% of your wages that will automatically go toward your future financial goals.
“Don’t save what’s left after spending; spend what’s left after saving.” Warren Buffett
2. Value Investing
Buffett tells you that the secret to wealth has been out for 50 years, which is value investing. Yet he’s witnessed no trend toward value investing over the past 35 years.
Value investing is an investment strategy where you select stocks that trade for less than their intrinsic value. Value investors, therefore, look for stocks (companies to buy into) that they believe the market has undervalued. An excellent investment involves understanding the opportunity the business represents (its value) rather than solely focusing on its stock price and whether it’s high or low.
The equivalent of this in the coaching space is seeking out quality businesses (and industries) that you feel are not maximizing their potential. This involves actually doing some HOMEWORK and NOT GETTING PAID FOR IT. A business with high earnings and low profitability is a GREAT client to coach and take a contingency agreement on.
A great example of this is to watch the show “The Profit” with Marcus Lemonis. He doesn’t take on just any business… he does his homework and picks carefully.
“Price is what you pay. Value is what you get.” Warren Buffett
3. Build strong business relationships.
Real success is impossible without building strong relationships, and frankly, not really worth it. Buffett sees people jump from one strong relationship to an unknown one for the potential of an extra few percentage points. Why would you risk irritation, aggravation or worse for ‘potentially’ higher returns?
Face value is often without value
People will ask a question when they really want something else answered. A person will ask ‘should I invest in this stock’ when in actuality they’re seeking a solution on how to make more money in the next 12 months because they need it. A colleague might ask what you thought of his / her idea on the last conference call when really they’re curious about their diminished role in the company.
Behind many of your best relationships will often be your ability to see the larger question that goes unasked. Great relationship builders care about the people they’re dealing with. They often seek the “real question” and in the end add incredible value to that person’s situation and life.
“It’s better to hang out with people better than you. Pick out associates whose behavior is better than yours and you’ll drift in that direction” Warren Buffett
4. Don’t risk something you need to get something you don’t
“If you buy things you don’t need, you will soon sell things you need.” Warren Buffett
People tend to want money and want it FAST. Therefore they go for investments with promises of high returns. but then fail to objectively factor in the higher risk that is almost automatically associated with it.
This happens when people get greedy, don’t read the fine print of financial documentation and don’t have a real investment objective. If your financial goals are vague or non-existent and your investing is done in a random fashion your destined to lose money.
Solution: understand the various financial instruments and asset classes (see rule number one above – “investing in yourself first”).
Taking risks is not necessarily wrong, but if you’re going to be a risk taker do it for the right reasons. Often people take risks out of greed when they should have held back, and subsequently pay a heavy price. Be long-term goal orientated and strategic.
“No matter how great the talent or efforts, some things just take time. You can’t produce a baby in one month by getting nine women pregnant.” Warren Buffett
Once in a while, we all suffer from the urge to splurge and then justify our lack of self-control with excuses of special occasions, lifestyle, family, emotions and even under the pretense of “smart decisions.”
Successful marketing companies exploit us by making offers that give consumers the false notion of having made the right decision.
Soft drinks and the like sell us with promises of youthfulness, adventure, happiness, excitement, etc… so always remember that spending wisely is not about being a tightwad but being strategic and self-aware.
“Rule No. 1: Never lose money. Rule No.2: Never forget Rule No.1” Warren Buffett
5. Surround yourself with people you admire
Columbia professor Benjamin Graham has played an enormous role in Buffett’s life as a mentor.
“Tell me who your heroes are and I’ll tell you who you’ll turn out to be.” Warren Buffett
You’re the average of the five people you most associate with so seek out people you admire and long to be like. It borrows from the law of averages which is the theory that “the result of any given situation will be the average of all outcomes.”Pick out associates whose behavior is better than yours and you’ll drift in that direction.
What is lesser known or acted upon is that the list of five is forever-changing. So depending on what areas of your life you’re currently working on or looking to improve/change, physical, emotional, psychological, financial as examples, dictate that you need to seek out different people at different stages of life.
You probably interact with many people, but the few who are closest to you have the greatest impact on your life.
“Honesty is a very expensive gift. Don’t expect it from cheap people.” Warren Buffett
6. Face and conquer your fears
You only live once so don’t let fear get in your way. In particular, something you know will make you more successful. Buffett was once terrified of speaking in public. He took a Dale Carnegie course to help him get over the fear. Today he’s one of the most sought-after speakers on the planet. Therefore and subsequently, what we fear doing most is usually what we most need to do.
If selling is a fear, deal with it. If investing is a fear… buy some books and start doing your homework on understanding financial tools. If reading is not your forte and you KNOW it can take your career to another level, start practicing and improving day by day.
Your fears are normally serving notice of what you need to be doing more of to grow… both in your personal life and your career. Make a list of the things you’re fearful of and set out to do them. A great strategy is to do one thing you’re fearful of every day.
If you attempt this and find your still not taking action, pull out a paper and pen and define the worst thing that could happen if you take action. Understand it, accept it and then proceed to take action.
As you push yourself into these uncomfortable situations, you’ll be making progress towards your goal and becoming less afraid, subsequently moving your baseline and allowing yourself to take on new and bolder tasks in the future.
“Your largest fear carries your greatest growth.” Warren Buffett
7. Seize great opportunities
Much of what Warren Buffett preaches is relatively conservative and long term, however, he’s also of the opinion that when big opportunities present themselves, you need to be smart enough to weigh the situation correctly (as best you can) and really back the truck up.
Buffett and his companies don’t take on many things, but when they see something that’s big and that will work, after careful calculation, they do it on a large scale.
“Opportunities come infrequently. When it rains gold, put out the bucket, not the thimble.” Warren Buffett
So there you have it…. 7 coaching tips from the “Oracle of Omaha.” He’s a great man and a great mentor. It was a pleasure researching him.
In closing… all of us have big, audacious wild dreams just like Buffett and so many others. The problem is that many have given up on them, or worse, never bothered to try.
I’ve said this before but as you get older, the voice in our head that used to say, “I can become a professional athlete or I can land on the moon” now says, “buddy, be reasonable and lower your expectations!”
The competition for the BIG Warren Buffett type success is actually significantly lower than it is for the more “reasonable success.”
That’s not to say becoming a multi-millionaire investor, coach or businessman a la Warren Buffett is going to be easy. Far from it, but I know it’s far more possible than you think.
To my coaches reading this – be GREAT and I look forward to hearing from one and all of you in some way.
Thanks for tuning in,
Karl Bryan creator of Profit Acceleration Software™ gets clients for Business Coaches...period.
He is the Founder and Editor-in-Chief of The Six-Figure Coach Magazine and Chairman of Leader Publishing Worldwide, home of the largest private community of Business Coaches (24 countries and counting) in the world. His goal is straightforward… to help serious coaches/consultants get more clients.