Berkshire Hathaway’s most recent performance report highlighted important lessons in business from Chairman Warren Buffett. These include the importance of transparency, embracing mistakes, succession planning, evaluating business talent, and using tax as a success metric.
Buffett emphasized that companies with a policy of projecting perfection to analysts and shareholders are making a mistake. He stressed that his success was not due to a lack of mistakes but rather how they were addressed. Buffett highlighted the importance of correcting mistakes quickly and taking action to address problems.
Succession planning is also critical, as seen in Berkshire Hathaway Energy CEO Greg Abel’s transition plan. Buffett chose Abel for his approach to business and alignment with his philosophy.
Buffett also stressed that business talent is not solely based on education, but rather innate abilities and work experience. He credited real-world business experience for his own success, saying “a very large portion of business talent is innate, with nature swamping nurture.”
In addition, Buffett framed the company’s record-setting federal income tax payment as a sign of success. He argued that an overaggressive approach to tax avoidance can damage a company’s reputation and create regulatory risks.
Buffett also criticized EBITDA as a flawed metric, preferring operating earnings as a measure of performance. The company’s operating earnings were $47.4 billion in 2024, demonstrating the importance of this metric in evaluating business success.
Source: https://www.cfo.com/news/6-cfo-takeaways-from-warren-buffetts-latest-investor-shareholder-letter/740773