We all write more than ever today, but do we communicate well? As one group, corporate directors, pondered how to communicate effectively to shareholders, they turned to the gold standard. They wondered, what most distinguishes Warren Buffett’s annual missive to Berkshire Hathaway shareholders, and asked me, as a student of these writings for two decades, for the answer.
Clarity, wit and rationality are hallmarks to emulate, I said, along with how Buffett personally pens lengthy sections to read more as literary essays than corporate communications.
But, far more important, these attractive qualities are products of a deeper distinction with greatest value. Every Buffett communiqué has a particular motivation: to attract shareholders and colleagues—including sellers of businesses—who endorse his unique philosophy. Tenets include fundamental business analysis, old-fashioned valuation methods, and a long time horizon.
A recurring motif of Buffett’s writing is the classic rhetorical practice of disagreement. Buffett recites conventional wisdom along with multiple reasons why it is inaccurate or incomplete. He then differentiates Berkshire with themes like autonomy, permanence, and trust.
In a new article I wrote at the request of the National Association of Corporate Directors (available free here), I parse recent examples to show that Buffett’s dispatches often work on several levels simultaneously. Think of circles on a dartboard, with the bull’s-eye as Berkshire’s distinctive practices, which Buffett relentlessly explains. Surrounding that core explication, in concentric circles, Buffett lauds specific Berkshire businesses or personnel, contrasts their industry or competitors, and opines on related public policy debates.
By arguing in this artful manner, Buffett hones Berkshire’s corporate culture while answering rivals and critics alike. Leaving an unmistakable effect on the conglomerate’s millions of owners, managers, and employees, Buffett’s essays are a model of tone-at-the-top governance.
Buffett’s essays are rich with history, putting current debates in broad context, and steeped in statistics, anchoring argument in data. Buffett contrasts and compares; jokes and quips; and prefers to praise by name but criticize by category. Even when confronting critics, Buffett’s essays avoid sounding defensive.
Above all, the work expresses who Warren is—a confident, astute and joyous capitalist. Yale University writing professor William Zinsser says that “Motivation is at the heart of writing.” Buffett loves Berkshire, his curated life’s work defined by unusual shareholders, adroit managers, and idiosyncratic principles. Munger has commented: “Warren’s whole ego is poured into Berkshire.”
More than the elements of style, such motivation is a gold standard worth aspiring to.
* * * * *
In 1996, based on a law review symposium they led together, Warren Buffett chose Lawrence Cunningham to compile his famous shareholder letters into the book, The Essays of Warren Buffett: Lessons for Corporate America, now in its 4th edition and sold worldwide in a dozen languages.