Warren Buffett, CEO of Berkshire Hathaway, emphasizes the importance of owning up to mistakes to become a better leader. He attributes this mindset to his late business partner and friend Charlie Munger.
Buffett acknowledges that mistakes are inevitable but stresses the need for prompt action to prevent further damage. In his annual letters to shareholders, he has used the terms “mistake” and “error” 16 times between 2019 and 2023, highlighting various missteps, including incorrect assessments of job candidates and economic trends.
At Berkshire Hathaway’s annual conference in 1997, Buffett revealed that his reluctance to invest in new companies had led to missed opportunities, resulting in billions of dollars in lost investment. Munger advised against dwelling on past errors but rather reflecting on them to avoid repeating the mistakes.
Acknowledging errors can build trust among colleagues by showcasing emotional intelligence and humility. Warren Buffet’s correct decisions have seemed to outweigh his wrong ones, with Berkshire Hathaway’s successful investments and strategic hires contributing to its success.
As Buffett notes, “Mistakes fade away; winners can forever blossom.” By embracing this mindset, leaders can focus on making winning decisions and cultivating a culture of continuous improvement.
Source: https://www.cnbc.com/2025/02/27/warren-buffett-charlie-munger-taught-me-to-quickly-admit-mistakes.html