What I Learned from Warren Buffett

I've been on a Warren Buffett kick lately.

Not only do I think he'll be remembered as one of the towering figures of our time (as were Carnegie and Ford in theirs), I believe the principles that underlie his success can be applied to recruiting.

Take time management, for example. If you consider time as an asset that can be invested, then why not utilize the same strategies as the greatest living investor in order to maximize your returns?

Where To Put the Eggs
Most financial advisers want you to invest in mutual funds. They'll tell you it's foolish to put all your eggs in one basket.

Yet that's exactly the opposite strategy that made Buffett a multi-billionaire. In his view, diversification is okay--if you're looking for average results.

To get outstanding returns, forget about diversifying. Do your homework, ask tough questions and make an informed decision. Then, invest heavily in one or two stocks-as opposed to the hundreds that make up a typical mutual fund-and stick with them over the long haul.

The same strategy applies to recruiting. You can adopt the "mutual fund" mentality and divide your time, trying to serve many different clients. Or, you can do your homework and carefully choose one or two clients to work with, based on objective criteria, such their willingness to work with you, their ability to attract industry talent, and so on.

By building "key accounts" with a small number of companies that have multiple, ongoing hiring needs, you'll focus your energy, deepen your understanding of their needs and establish long-term relationships.

Risk vs. Reward
True, there's an element of risk any time you concentrate your resources. But the payoff can be huge. Top recruiters know that it only takes two or three key accounts to put up big numbers, and that the more scattered your attention, the harder it becomes to work efficiently. Besides, you can always hedge your bets by keeping your eyes open for new clients. When you need them, they'll be there.

Here a few more gems from the Warren Buffett playbook that directly apply to recruiting:

1. Focus on what you understand. It's not necessary for you to be able to perform your candidates' work, but if you can't visualize or explain in plain English what their job entails, it'll be difficult for you to match up jobs and people.

2. Make decisions with your head, not your heart. We sometimes maintain relationships that are no longer (or were never) useful. By breaking dysfunctional attachments, you'll do yourself a favor.

3. Sidestep problems that are beyond your control. As recruiters, it's our job to fill positions. And by so doing, we solve personnel problems. But if the company is unwilling to pay a competitive wage, or can't put together a realistic set of requirements, or make decisions in a timely manner, it's no longer a personnel problem. Rather, it's a structural problem.

Occasionally, we can coach our clients to correct their mistakes; or serve as management consultants to address some of the business issues they face.

But when employers act as their own worst enemies during the recruitment process, there's not much we can do, unless we want to fight with them or spend countless hours trying to solve a problem that's not of our making, and beyond our control.

The Running of the Mills
When Warren Buffett gained control of the Berkshire Hathaway textile mills in the 1960s, the U.S. textile industry had already begun its slow, downward spiral. Rising to the challenge, he spent the next two decades trying to turn the business around.

Finally, in 1985 Buffett closed the mills. Despite all his efforts--and his reinvestment of millions of dollars in new equipment-Buffett couldn't solve the underlying problem: offshore competitors could produce the same products at a fraction of the cost.

Though his failure was painful (and expensive), Buffett learned an important lesson, which he summed up this way:

"After 25 years of buying and supervising a great variety of businesses, I have not learned how to solve difficult business problems.

"What I have learned is how to avoid them."

By Bill Radin
 BlackDog Recruiting Software Inc.
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