Margin of Trust
The Berkshire Business Model
Columbia Business School Publishing
Margin of Trust
The Berkshire Business Model
Columbia Business School Publishing
Warren Buffett and his company, Berkshire Hathaway, are legendary for their distinctive investing approach. Yet many equally unconventional but less well known aspects of Berkshire’s managerial practices and organizational structure are rich with lessons for those seeking to follow in Buffett’s footsteps. Margin of Trust is the first book to distill Buffett’s approach to management and corporate life. It provides a definitive analysis of the tenets of the Berkshire system, its costs and benefits, and how it can be adapted for other organizations.
Lawrence A. Cunningham and Stephanie Cuba develop a new account of how Berkshire Hathaway works, showing that the key to its success is trust. Profiling partnership practices and business methods, they contend that Berkshire’s distinguishing feature is a culture in which autonomy and decentralization are core management principles. Cunningham and Cuba provide instructive examples of how this model has been successfully adapted by other companies that share a faith in trust as an organizing principle. They also offer candid commentary on the risks of a trust-based approach and how to mitigate them. Margin of Trust features illuminating analysis of Buffett’s take on the role trust plays in business agreements, what Buffett looks for in great corporate boards, and what lies ahead for Berkshire after its iconic leader leaves the scene.
Lawrence A. Cunningham and Stephanie Cuba develop a new account of how Berkshire Hathaway works, showing that the key to its success is trust. Profiling partnership practices and business methods, they contend that Berkshire’s distinguishing feature is a culture in which autonomy and decentralization are core management principles. Cunningham and Cuba provide instructive examples of how this model has been successfully adapted by other companies that share a faith in trust as an organizing principle. They also offer candid commentary on the risks of a trust-based approach and how to mitigate them. Margin of Trust features illuminating analysis of Buffett’s take on the role trust plays in business agreements, what Buffett looks for in great corporate boards, and what lies ahead for Berkshire after its iconic leader leaves the scene.
To truly understand Warren Buffett’s conglomerate, one needs to look beyond the extraordinary numbers and absorb the unique culture of Berkshire Hathaway. Every Berkshire shareholder—or investor of any other company, for that matter—should read Margin of Trust to better understand what makes a sustainable corporate culture and, therefore, superior investment that’s built to last multiple generations. Robert P. Miles, executive in residence, University of Nebraska at Omaha, College of Business Administration, Executive MBA Program, Genius of Warren Buffett Course
The essential element for successful long-term investing is a trust formed between managers and owners of a company. Margin of Trust outlines the special ingredients that have been baked into the relationship between Berkshire and its shareholders for over fifty years. This book is an important must-read that has earned a place in every investor’s library. Robert G. Hagstrom, author of The Warren Buffett Way
Everyone wants to understand the ingredients of Warren Buffett’s success—Lawrence A. Cunningham and Stephanie Cuba have delivered compelling answers in Margin of Trust. This readable and practical book takes the reader inside the Buffett organization to show how the concept of trust is the foundation of Buffett’s deal making and operations. Essential reading for fans of Buffett and anyone who wants a better understanding of management. M. Todd Henderson, law professor at the University of Chicago and coauthor of The Trust Revolution: How the Digitization of Trust Will Revolutionize Business and Government
Few writers are more familiar with the intricacies of Berkshire Hathaway than Lawrence A. Cunningham. The Rational Walk
While detailing the strengths and notable successes of a trust-based approach, the authors are candid about its risks, and how Berkshire works to mitigate them. Their prose is lively, and their points well taken. Nick Murray, Financial Advisor
This brief, concise, and pleasant exploration of the inner machinations of Berkshire Hathaway will interest anyone who seeks a better understanding of Buffett's Midas Touch. . . . Highly recommended. Choice
Prologue: The Carrot of Trust
Part I. Pillars
1. The Players
2. Partnership Practices
3. Business Methods
Part II. Perspectives
4. Deals
5. Boards
6. Internal Affairs
Part III. Alternatives
7. Contrasts
8. Comparisons
Part IV. Challenges
9. Judgment
10. Public Perception
11. Scale
12. Succession
Epilogue: The Stick of Ruthlessness
Notes
Index
Part I. Pillars
1. The Players
2. Partnership Practices
3. Business Methods
Part II. Perspectives
4. Deals
5. Boards
6. Internal Affairs
Part III. Alternatives
7. Contrasts
8. Comparisons
Part IV. Challenges
9. Judgment
10. Public Perception
11. Scale
12. Succession
Epilogue: The Stick of Ruthlessness
Notes
Index
- Read an excerpt on Marker
- Read an interview with Lawrence Cunningham about Berkshire's Business model
- Listen to an interview with Fox Business's Liz Claman as Cunningham recaps the 2020 Berkshire Hathaway annual meeting
- Watch Lawrence A. Cunningham in conversation with Ellen B. Richstone as they discuss the culture of trust for the Center for Ethics in Business and Governance at Saint Anselm College
- Watch an interview with Lawrence Cunningham on NTD News about the book.
- Watch an interview with Larry Cunningham about the Margin of Trust
Winner, 2020 CHOICE, Outstanding Academic Title