Power Sheet - December 9, 2015

Please check out this revealing study of an aspiring 21^st-century Warren Buffett, SoftBank heir apparent Nikesh Arora. You’ve probably never heard of him, but his unusual journey, reported by Fortune’s Erin Griffith, is full of lessons for many kinds of leaders now.

SoftBank founder and CEO Masayoshi Son says Arora will succeed him; as COO he already seems to be doing plenty of CEO tasks, which at SoftBank means choosing technology companies in which to invest. These are precisely the companies Buffett won’t touch, explaining that valuing Internet and other high-tech companies is simply impossible. But since joining SoftBank from Google last year, Arora has already invested nearly $4 billion in Didi Kuaidi (the Uber of China), Snapdeal (the Amazon of India), Ola Cabs (the Uber of India), Social Finance (a U.S. lender), and others. He’s not a typical venture capitalist. He doesn’t invest until startups are becoming well established, which means he pays high prices for his stakes. Whether that strategy will pay remains to be seen, but in an era of rapid disruption and fast-changing business models, investing wisely in startups may become a key competency for many business leaders.

Like Buffett, Arora goes beyond investing in companies. He also advises their CEOs. He tells them to look ten years ahead in making their plans, and he teaches what he learned about growing a web business at Google. He has interviewed CFO candidates for three of SoftBank’s portfolio companies, and an associate has helped him recruit top execs for several others. There’s nothing new about the importance of judging and developing managerial talent except that in an information- and service-based economy, it’s getting more important.

Arora is in the difficult position of succeeding a founding genius. He tells Griffith, “[Son] has never had a problem taking big bets. What we have to do now is take that genius and figure out a way to at least institutionalize some of his values, so the future generation of SoftBank can actually execute in the same way that he does.” Trouble is that no playbook exists for doing that, and history says the chances of succeeding are slim.

That reality seems not to trouble Arora. He operates with a confidence that’s becoming necessary for most leaders as the nature of their jobs changes with increasing speed. “Every job you get into, you bring 50% of the skills you need, and you learn the other 50% if you’re lucky enough,” he tells Griffith. Many leaders wouldn’t dare say that to a journalist. Yet Arora is obviously right.

He won’t be another Warren Buffett or another Masayoshi Son. He’s a driven, demanding leader with plenty of devoted fans and at least a few enemies, fighting to make a famous company worthy again of its luminous reputation. He’s worth watching.

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