The Leadership Paradox: How Letting Go Can Strengthen Your Team

Do you know Mrs B?

Mrs B is also known as Rose Blumkin. In 1937, Mrs B founded Nebraska Furniture Mart. It sold furniture, flooring, appliances, and electronics. The Mart went on to be the biggest home furnishing store in North America.

It also happens to be located in Omaha, Nebraska. There is also someone else famous from Omaha. Warren Buffet, who is one of the best investors in the world.

In 1983, at the ripe young age of 89, Mrs B sold 80% of Nebraska Furniture Mart to Buffet.

This was a one-page handshake deal, Buffet didn’t audit her books, and he didn’t send a battalion of lawyers to fine-comb the contract.

Buffet didn’t need all the extra hassle because he was basing his decision on his own shopping experience and the respect he had for the Blumkin family having dealt with them over the years.

And what was this causal handshake deal worth, just a cool $60 million.

After spending all that money, surely Buffet enforced his own methods of working on Mrs B and her team.

Nope. Buffet left her alone. She started and ran a successful company and he let that keep happening.

So what does this situation teach us about leadership?

Hire Well, Manage Little

Hire well, manage little – words from Buffet’s 2010 letter to his shareholders succinctly encapsulate his management style.

The full quote is,

At Berkshire, managers can focus on running their businesses: They are not subjected to meetings at headquarters nor financing worries nor Wall Street harassment. They simply get a letter from me every two years and call me when they wish. And their wishes do differ: There are managers to whom I have not talked in the last year, while there is one with whom I talk almost daily. Our trust is in people rather than process. A “hire well, manage little” code suits both them and me.

Hire in this sense might be hiring in the traditional way of getting someone for a job but also in the sense of Mrs B where he buys the business and gets her as part of the deal.

To Micromanage or To Not Micromanage

Modern management’s challenge is that it can’t deal with the lack of control. They want to constantly know where everything is, all the time.

The fundamental flaw in this position is that if you are a leader, your role is to look forward, and knowing where everything is, all the time, means you are focusing on the present at the expense of the future.

Compounding this issue, is that you hired and paid these people to do their job, so why are you watching them do their job? Doesn’t that feel like you are treating them like children?

So if your staff start acting like children then who is responsible for that?

As Tom Murphy says in Lawrence Cunningham’s book Berkshire Beyond Buffet – “Don’t hire a dog and try to do the barking”

If not having constant interaction with your staff makes you uncomfortable, then you might be the problem.

Give Decisions Up

You want the lowest possible person on the totem pole to make the highest possible decision.

This doesn’t mean to give the new intern control of the budget for the whole company, that would be idiotic, but it means that you want to give the most responsibility you can to a person furthest down the hierarchy.

A business is a system of systems, you don’t want to be making every little decision for everyone. You want to empower your team to make these decisions.

Autonomy

So how does this magical land of letting your staff do their job happen?

First, you have to paint a picture for your team so they know where they are going, and why they are going there.

Create a box for them to play in. They can make any decision they want inside this box and if it gets close to the edge then they know to seek support.

Be present so the people who need more support can come and ask you for help when they need it.

Ensure your team knows what they are responsible for, and how they are going to be measured on it.

Check-in as often as required. Different people and different projects will have different requirements.

If it is a new process, you might want to check in more often, once things get established that weekly meeting could become a monthly meeting.

All the time you can free up from watching your team work will allow you to move ahead and solve bigger more interesting problems so that your team can keep being productive.