The Value of You We all like to see results. Whether it is in the work we do, our bank account, or other personal activities, results make us feel good. The life of Warren Buffett is a great story about leadership that gets results. He spent decades mastering the financial industry and understanding how to get results. Regardless of how you feel about his approach, philosophy, or business style you cannot argue with the effectiveness and success he and his organization has had. In 2008 Warren Buffets net worth was estimated at $62 billion dollars. Those results were achieve by a lot of focus on the bottom line.
So how does Warren Buffett’s success apply to you? In November 2009, Warren Buffett and Bill Gates participated in a Town Hall meeting at Columbia University. During this event the following question was posed by a student:
Student Question: “Mr. Buffett, Mr. Gates, thank you for being here today. My name is Justin, I’m a second-year MBA, as I get ready to graduate, I was wondering, what’s the one thing that your MBA didn’t prepare you for when you got out into the real world?”
Warren Buffett Response: “Well, I was — it prepared me very well, not the whole degree, but specific professors prepared me very well for what I wanted to go into. I knew I was interested in investing, like I say, from the time I was six or seven years of age. So I was lucky that I found what turned me on early on. And I had these two marvelous professors here at Columbia that just being around — I had read all the stuff they had written. So it wasn’t I was acquiring lots of incremental knowledge but I was getting inspired. They were terrific for me. They treated me like a son. They would take me out to dinner. Ben Graham did the same thing for me. So it gave me confidence in myself. It just propelled me into a field I already love with a terrific tailwind from these professors that believed in me. [APPLAUSE] But let me add one point because — to the MBA situation. Right now, I would pay $100,000 for 10% of the future earnings of any of you. So anybody that wants to see me after this is over — [LAUGHTER] [APPLAUSE] If that’s true, you are a million-dollar asset right now, right, if 10% of you is worth 100,000? You could improve — many of you, and I certainly could have when I got out, just in terms of learning communication skills. You know, it’s not something that is taught. I actually went to a Dale Carnegie course later on in terms of public speaking. But if you improve your value 50% by having better communication skills, that’s another $500,000 in terms of capital value. See me after the class and I’ll pay you 150-thousand.”
Monetary Value of Learning and Communication
This matters because it illustrates the importance of learning and effective communication. As individuals, it is important to develop ourselves. Whether you get an industry trade degree, look at going through a mini MBA program, or complete a Masters Degree at Columbia University, ongoing development of yourself is important to you, your future success, and ultimately your net worth. Investment in learning will pay huge dividends. If good communication skills are worth an additional $50,000 to Warren Buffet, it’s worth far more to you individually.
Heavily Invested
Ask yourself this question. What would an investor ask you at the annual shareholders of YOU meeting? At a high level, you might hear questions such as:
- Do you understand what it takes for you (and your organization) to win today?
- Do you understand where and how we can increase profit margins?
- Are you cutting operational expense to increase profit margins?
- How can you create distance or differentiation from the competition?
- Is the organization focusing on what matters?
If you can answer those questions, you are doing great. If not, look to refocus your efforts. Educate or develop yourself to the point where you can answer them. You are heavily invested in yourself so what do you want your future earnings look like? Are you a million-dollar person? It’s hard to argue against hard results.
Every one of us likes to see results; whether it’s in the work we do, our investment portfolio, or other activities, good results make us want to celebrate success. Bill Gates has been consistently ranked as one of the world’s wealthiest men. It’s hard to argue with his track record in business or philanthropy. Regardless of his approach, philosophy, or business style you can’t argue with the effectiveness and success he and his organizations have had.
At a recent Town Hall forum for MBA program students at Columbia University, a Masters student asked Bill Gates the following question:
Student Question: My name is Erica and I am a second-year student. My question is for Mr. Gates. What is the most important thing you do every day?
Bill Gates Answer: Well, I do a lot of variety. I think reading a lot, you know, and continuing to learn. I’m in a lot of new areas in the Foundation, education, health. And I love reading a lot. So I think, you know, arming myself with that knowledge and sitting down with people who live the topic and brainstorming with them, that’s what helps me back the right people and make sure I know what’s going on. So I guess I’d say learning is what is the key thing.
“Arming” yourself and your employees with knowledge is so important. What would organizations look like if we “armed” people to be results based leaders who understand how to increase profit and drive bottom line results? This can be done, by exploring and discovering what really matters and how to properly measure results. I’m not talking about more reports, more charts, more graphs, to bore people with. I’m talking about engaging individuals to measure and do it in a way that speaks to them as individuals. It is about how I fit and why I matter.
Whether you’re looking to drive key results of your business or looking to simply educate employees on finance for non financial managers, arming your people with knowledge to be prepared for battle will ensure more focus around winning as an organization. It’s hard to argue with results.
Business acumen is such an important part of business and our everyday lives. I believe that many of us do not fully appreciate how much financial literacy impacts our daily business activities, as well as the activities in our personal lives. However, those who are fluent in the language of finance, accounting, economics, and strategy, regardless of whether or not these subject were part of their formal education, find themselves with an open seat at the decision making table in their organizations and are able to make smart financial decisions for themselves and their families.
Thomas Cooley, professor of economics and former dean of the NYU Stern School of Business, articulates the importance of having strong financial knowledge:
Many of the most important decisions consumers make in their lifetimes involve financial products: a mortgage to purchase a home, a loan to purchase an automobile, credit to make a large durable purchase, investments for retirement and insurance to keep one’s family secure. All of these financial products have become increasingly complex over time and there is a much wider range of product options offered by different providers, making decision-making more complicated. Consumers need to be financially literate in order to make well-informed choices about such complex products. A growing body of evidence suggests that many consumers lack the knowledge they need to evaluate and make decisions about financial instruments.
Fixing our financial illiteracy and understanding the fundamentals of business acumen (finance, economics, accounting, and strategy) will not only aid you in your personal, consumer-based life, as Professor Cooley mentioned above, but will open doors for you at work, allowing you to sit at the conference table and make decisions that ensure viability – the life blood of organizations, the ability to stay competitive, profitable, and relevant.
What does trick-or-treating and a Masters in Business Administration (MBA) have in common? Think about it for a moment – maximizing your gains, equations for efficiency, and opportunity costs. Are you seeing the connection yet?
Maximizing Your Profitability
I was watching a report on CNN last week about the strategies of maximizing their acquisition of treats on Halloween. Instead of just taking a “dash and grab” approach, some people take a more economic approach to their quest for sweets. The people at Zillow.com have done some research on five major cities to identify the “best” neighborhoods for trick-or-treating. While there is a common belief that wealthy neighborhoods are the prime place for harvesting the most Halloween treats, it is only a part of the equation for efficiency. To provide a more holistic approach to Halloween trick-or-treating, the Zillow Trick-or-Treat Housing Index was calculated using four equally weighted data variables: Zillow Home Value Index, population density, WalkScore (point to point distances), and local crime data. Based on those variables, this Index represents neighborhoods that will provide the most candy, with the least amount of walking and safety risks.
Jackpot
Some may find Zillow’s index to be an unnecessary approach to the trick-or-treating adventure, but for others it is just the kind of thing that makes the holiday even more enjoyable. After seeing the report on CNN, I saw this holiday as a great time to teach my kids about economics, finance, and getting the highest revenue with the least amount of input (revenue = candy). What makes this even more of an economical and financial teaching opportunity is that a local dentist is offering $1.00 for every pound of candy brought to their office during the week after Halloween. What made this offer even more interesting was that CNN also reported a statistic that the average child gathers 17.1 pounds of candy on Halloween. So, if my kids want to use Halloween as a chance to have fun and make money, there are strategies to do so.
If you ask parents today if they want their children to go through the higher education system, the answer is predominantly, “yes.” I believe preparing young people to be ready to receive a college education is as important as actually obtaining one. The same is true for anyone. There are opportunities for education and skill development all around us, just like this “trick-or-treating” example.
Education To Make A Difference
For those of us who are college age or older, but still have a desire for gaining more education, there are diverse opportunities available. There are accelerated masters programs, online degrees, and Mini-MBA Workshop. The Mini-MBA Workshop is a great way to learn the fundamental concepts taught in a traditional MBA program, but at much less costs and in a much shorter time frame. I attended this fantastic course offered by CMOE, developed and Columbia University, and taught by David L. Buckner. It helped me to understand the key concepts of economics, finance, and accounting, helping me to be more affluent in the language of business. Knowing more business acumen key terms and concepts has had a great impact on my contribution to our organization. While I didn’t earn a Masters degree, I have the ability to apply valuable concepts to my everyday efforts and decisions. As the writer and scientist, Carl Sagan wrote, “Knowing a great deal is not the same as being smart; intelligence is not information alone but also judgment, the manner in which information is collected and used.”
“Arming” yourself and your employees with knowledge is so important. What would organizations look like if we “armed” people to be 
