Quiet Collaboration at Berkshire Hathaway

The environment at Berkshire Hathaway has changed from one where myriad companies run independently of each other to one where top executives of the different units gather regularly to share strategies and best practices. This according to an article in The Wall Street Journal.

The article reports that last year the company’s subsidiary CEOs started reporting to Buffett’s lieutenants, Ajit Jain and Greg Abel, rather than to Buffett himself, adding, “The rise in internal collaboration, which executives rarely discuss publicly, hints at what the firm might look like when Mr. Buffett is no longer running it as chairman and CEO.”

Combining departments and seeking economies of scale is something that many conglomerates do, but historically it hasn’t been the culture at Berkshire. Thanks to efforts that began in 2013, however, Berkshire companies are now working together much more. Last year, for example, employees from more than 40 of its businesses met at Berkshire’s headquarters in Nebraska to discuss sustainability.

Buffett said, “The best cooperation is voluntary. That’s not a change in the culture, though. It’s sort of a sign of the culture. It really is people thinking like owners and exercising, in a sense, their independence.”