Skip to Content

Power Sheet – August 10, 2015

Over the next three weeks, the media will be clogged with forward-angled articles looking past the Warren Buffett era at Berkshire Hathaway as the legendary CEO and investor turns 85 at the end of the month. I won’t be writing any of them. While it seems sensible to contemplate the next managerial chapter as a CEO closes in on 90, Buffett has confounded conventional thinking so often over the decades that maybe we should instead focus on what he’ll do next. After all, he isn’t even getting tired, as we see in this morning’s news of his biggest deal in years.

Berkshire has just announced that it will pay $32 billion in cash for Precision Castparts, a company that could be described non-metaphorically as a nuts-and-bolts business. Here we observe a corporate leader at his most characteristically contrarian: Precision’s stock was down 22% this year because low oil prices have hurt many of its customers in the oil and gas business. But where the market saw trouble, Buffett saw a strong long-term business at a bargain price. And, as he has often done, he got excited by a company most people had never heard of and would regard as hopelessly unglamorous. This is a CEO who has pounced on companies with names like Ohio Mattress and (my favorite) Acme Brick.

Quietly flouting convention has been Buffett’s lifelong m.o. He has famously never split Berkshire’s stock (recent price: about $215,000 a share), and he never tells Wall Street analysts what he expects Berkshire’s earnings to be this quarter or this year. He does, however, tell investors from time to time that he thinks Berkshire stock is too expensive. He runs America’s fourth-biggest company (2014 revenue: $195 billion) with a headquarters staff of 25. He has been an activist investor since long before the term existed, and he has fired CEOs of companies in which he holds a stake. But, unlike today’s high-profile, vigorously tweeting activists, he has done it almost invisibly.

By continuing to go his own way, Buffett remains one of the great business leaders of the past 50 years. Who knows how long his reign may last? His Coca-Cola-and-hamburger-based diet, another snub of conventionality, has served him remarkably well so far.

What We’re Reading Today

Berkshire Hathaway agrees to its largest purchase in years

Warren Buffett’s company agreed to a deal valued at $37.2 billion for Precision Castparts. Buying the airline component maker, however, takes Buffett back to his basics.  Fortune

Jet.com faces backlash from retailers

Sellers, such as Wal-Mart and Amazon, have pulled their products from the discount retailer’s website after learning it placed links to their websites without permission. Inc

Coca-Cola backs new group that studies obesity

The Global Energy Balance Network’s scientists argue that those who want to lose weight should focus more on exercise and not on consuming fewer calories. Health experts are criticizing Coke’s involvement as a way to deflect criticism from sugary drinks. NYT

Microsoft changes the way board members are nominated

It’s now easier for shareholders to offer their own candidates. The move follows in the footsteps of other companies, such as Verizon and General Electric, that have tweaked board nominations to attract shareholders.  WSJ

Dick Costolo may be out of Twitter’s board

The move would come just a few months after Costolo stepped down as CEO of the social network. There are currently three former-CEOs (including two co-founders) on Twitter’s board. MarketWatch

Hampton Creek responds to reports of bad science, ethical lapses

Las week, Business Insider outlined ethical, scientific, and cultural issues at the San Francisco-based vegan mayonnaise maker. CEO Josh Tetrick has responded to the allegations, calling them “based on false, misguided reporting.” Medium

Vice Media’s writers unionize

It’s the latest wave of unionization hitting new media companies, following in Gawker Media and Salon’s footsteps.  Fortune

Worth Considering

How Presidents sway your opinion

Our leaders spend a lot of money on attempts to sway or distract Americans, but such efforts don’t often work.  Washington Post

How you learn may define how you work

No single approach is better than the other, but people improve faster by using their preferred learning style.  Fast Company

Building a Better Leader

The downside of not letting your employees go mobile

You want to accommodate employees, but you don’t want to give them complete autonomy when offering flexible work options.  Chief Learning Officer

Lacking quality talent?

Maybe it’s time to speed up your hiring process.  Fortune

When you know it’s time…

To break up with that innovation project. Here’s a step-by-step guide to let the effort go while making sure your company benefits from the experience.  Harvard Business Review

What’s the best font for resumes?

It’s not Times New Roman.  Entrepreneur

Up or Out

Tom C. Davis resigned as Dean Foods chairman effective immediately. The company did not explain why Davis departed the milk processor.  Dallas Morning News

Pandora’s senior lawyer and VP of business affairs Christopher Harrison is leaving for a role at SiriusXM. Harrison led Pandora in its royalty battles against the music industry. Fortune

Joe Natale has stepped down as CEO from large Canadian telecom Telus. Darren Entwise will replace Natale.  Street Insider

Former professional football player and broadcaster Frank Gifford passed away on Sunday at the age of 84. Sports Illustrated

Fortune Reads

Donald Trump has a history of taking shots at women 

The presidential candidate’s latest remarks toward Fox News host Megyn Kelly are just that: The latest.  Fortune

Facebook’s new security chief Alex Stamos lays out his plans

To connect the world, securely. Fortune

To network effectively

Focus on a select few people at an event or party. That way you can build a deeper relationship. Fortune

The FAA has approved over 1,000 commercial drone permits

And small businesses lead the way in operating the unmanned aircraft. Fortune

Today’s Quote

“You do things when the opportunities come along. I’ve had periods in my life when I’ve had a bundle of ideas come along, and I’ve had long dry spells. If I get an idea next week, I’ll do something. If not, I won’t do a damn thing.” —Warren Buffett, Berkshire Hathaway