Berkshire Hathaway 2014 Annual Report Download - page 45

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Nor do I think that desirable purchases of new businesses would end with Buffett’s departure. With Berkshire now
so large and the age of activism upon us, I think some desirable acquisition opportunities will come and that
Berkshire’s $60 billion in cash will constructively decrease.
My final task was to consider whether Berkshire’s great results over the last 50 years have implications that may
prove useful elsewhere.
The answer is plainly yes. In its early Buffett years, Berkshire had a big task ahead: turning a tiny stash into a large
and useful company. And it solved that problem by avoiding bureaucracy and relying much on one thoughtful leader
for a long, long time as he kept improving and brought in more people like himself.
Compare this to a typical big-corporation system with much bureaucracy at headquarters and a long succession of
CEOs who come in at about age 59, pause little thereafter for quiet thought, and are soon forced out by a fixed
retirement age.
I believe that versions of the Berkshire system should be tried more often elsewhere and that the worst attributes of
bureaucracy should much more often be treated like the cancers they so much resemble. A good example of
bureaucracy fixing was created by George Marshall when he helped win World War II by getting from Congress the
right to ignore seniority in choosing generals.
Sincerely,
Charles T. Munger
43