Warren buffett’s servant leadership

Billionaire Warren Buffett is not particularly interested in making more money for himself. At 85 years old, he has amassed a staggering fortune worth more than $65 billion.

Instead, what has consumed him for the past six years is how to give it all away and how to convince other billionaires to do the same. In 2010 Buffett created the Giving Pledge, an ambitious initiative designed to encourage the world’s wealthiest people to commit to donating half their fortunes to charity within their lifetime.

While it may be tempting to view his effort as a simple philanthropic exercise in transactional leadership, Buffett’s work shows how a careful use of negotiation can transform something straightforward into a higher cause through what is called servant leadership.

Through the years Buffett has come to believe that his vast fortune should be put to use solving some of the world’s most challenging problems, and he thought that fellow billionaires should give back too. However, while a leader’s total devotion to a cause greater than himself or herself lies at the heart of the concept of servant leadership, this is not always enough to persuade others to take action.

Effective servant leadership often employs fundamental negotiation skills in order to convince others to come on board. In a recent feature on “60 Minutes,” Buffett shared the story of his efforts at negotiating to build the success of the Giving Pledge.

Even with his extraordinary influence and power, Buffett’s goal was not easy to achieve. While servant leadership is characterized by service to an effort above and beyond one’s own self, effective servant leaders also understand that success comes only from articulating their goals to others who can support them. They use strategies and tactics that will ensure that they get to their target deal.

With his goal in mind, Buffett pursued the specific steps that it would take to get there, using what negotiation scholars call “backward mapping”: Looking at where he wanted to end up and connecting it to where he was starting helped reveal the issues that mattered most to others and indicated the sequence of actions he would need to take to get them on board.

In order to succeed, Buffett hoped to form a large coalition of philanthropists. He readily admitted that he did not have the personal skills to manage the actual steps of running a global philanthropic organization, skills that he knew would be necessary from the outset. By acknowledging this, Buffett was able to create a core constituency who would contribute skills and vision that he did not otherwise have.

Before announcing the initiative, Buffett recruited two friends — Bill and Melinda Gates — to help lead the Giving Pledge. An essential component of effective servant leadership is the ability to honestly assess one’s own weaknesses and attempt to address them in ways that support building a stable coalition over time. By bringing the Gates family on board early on, Buffett was able to overcome a barrier that would have impeded building the larger coalition that he ultimately needed.

Embracing servant leadership does not automatically prove persuasive to others, however. Buffett needed to negotiate with dozens of fellow billionaires on an array of issues in order to succeed. In conversations he made an effort to understand what mattered most to them. He discovered that there were many billionaires interested in giving away half their fortunes or more, but that they were deeply resistant to the possibility that there would be restrictions on the definition of “charity.”

Buffett made the strategic decision that the Giving Pledge would be devoted to how to give money away, rather than applying strict rules about to whom the money would be given. Donors could pick and choose their own causes, based on their understanding of the needs of others. By making an effort to get at the core issues and responding accordingly, Buffett ultimately created a more appealing offer and avoided creating adversaries.

Buffett, the Gates family and their fellow philanthropists understood that, for many of their colleagues, committing to the Giving Pledge was a bold decision and one not without risk. By contributing, billionaires would draw attention, exposing themselves to scrutiny if the projects they supported should ultimately fail.

As effective negotiators, they responded by incorporated ways of addressing these potential barriers within the pledge, using them to create unexpected value that would sustain the membership over time. They created an ongoing set of forums, workshops, training sessions and gatherings for members to explore successful ways of giving, target their own goals and learn from others.

As Bill Gates told interviewer Charlie Rose, “We do think that we’re going to be smarter … doing it together.”

Servant leadership demands a healthy respect for timing, an ability to withstand criticism without resorting to petty tactics and a capacity for accepting nonagreement. Along with praise, there has been some criticism of the Giving Pledge, and some billionaires have told Buffett and the Gateses flatly that they will not sign on. While they do not dismiss opposition out of hand, the Giving Pledge members avoid making it into an adversarial position, focusing instead on getting the next set of donors on board.

As of June 2016 the Giving Pledge, which began as a club of three, had expanded to 154 members from 16 countries, including business rivals such as one-time Gates competitor and AOL co-founder Steve Case. As a result of six years of negotiation and servant leadership, Buffett’s efforts have turned a fledgling idea into a half a trillion dollars of charitable giving.