Warren Buffet Stepping into a Crisis

Berkshire Hathaway had just bought a 12% stake in Salomon Brothers, a well-known Wall Street powerhouse. Not long after that, Salomon Brothers was in the middle of a scandal—a serious one—over violations in U.S. Treasury bond trading.

The situation spiraled so quickly that it nearly sank the company. Faced with a brewing disaster, Buffett stepped into role as interim chairman and CEO. He was stepping in to save the firm and protect Berkshire’s investment.

In his first address to Salomon Brothers employees, Buffett didn’t mince words:

"Lose money for the firm, and I will be understanding. Lose a shred of reputation for the firm, and I will be ruthless."

He didn’t stand up there and tell them to focus on keeping the company financially afloat. He told them that relationships and trust was THE priority.

Buffett kept a principled, long-term view amidst this crisis. Even in the thick of a scandal that could have destroyed everything, Buffett stuck to his playbook of the long-term view: trust & relationships.

I’m convinced that Buffett’s long-term view is the right view: Upholding values. Upholding trust.

Buffett plays the long-term game.

Playing a long-term game with long-term people is a game worth playing.

Onward,

Matt