This post was originally published on July 27, 2016.
There is a parable of a traveler who passes through a village and comes across three bricklayers. He asks them what they are doing.
The first bricklayer responds, “I’m laying bricks.”
The second says, “I’m putting up a wall.”
The third says, “I’m building a house of God.”
The point of the parable is that, to the first bricklayer, his work is just a job. To the second, it is an occupation. The third bricklayer, though, has found a calling; he has a profound sense of meaning and purpose in his work.
Defining a purpose like the third bricklayer’s can be a bit of a challenge in the business of investment management. Somehow cerebral statements like, “I seek to achieve high returns on capital by investing in securities with wide margins of safety,” while technically accurate, still sound a lot like “I’m laying bricks.” A more hollow and pessimistic description of the money management profession might simply be “to take people’s money and make more money.” Of course, we all would like to make more money but to put it in these terms just feels a bit crass.
With the aim of improving our investment process, I have spent a lot of time over the past three years studying leadership and organizational behavior. In the course of my reading and reflections, I have observed that some of the most phenomenally successful leaders and businesses have developed a sense of purpose that transcends the objective of just making money. When a leader and an organization are connected to their work through purpose, the results are generally quite remarkable.
For example, Henry Ford felt that his company’s purpose was to make transportation more efficient and thereby deliver a crucial service to society. This drove him to work relentlessly at reducing the cost of producing an automobile; his objective was to make cars so cheap that every family could own one. He frowned upon companies that tried to lower costs on the backs of labor. He believed that it was management’s job to lower costs through more intelligent design and processes and that it was immoral to cut costs by cutting wages. Instead, he focused on optimizing his mass manufacturing techniques and raised wages. The Ford Motor Company was immensely successful and Henry Ford’s personal fortune at that time of his death would be worth nearly $200 billion in today’s inflation-adjusted dollars.
Similarly, Steve Jobs relentlessly tasked his engineers and designers at Apple to produce the best computing and personal electronic devices on the market. Beyond loading his devices with faster processors and more memory, he challenged his employees and the world to “think different.” Consequently, Apple developed revolutionary products like the Macintosh, iPod, iPhone and iPad that completely altered our relationship with technology. Jobs pushed technology to be simple, delightful and engaging for users of all ages and backgrounds, not just the enthusiasts and wonks. Today, Apple is one of the most valuable publicly traded companies on Earth.
After much contemplation, it occurred to me that our purpose in our Partnership is indeed about more than just making money. Our purpose is to enable aspirations. These aspirations will vary from individual to individual. For some of you reading this, your aspirations might be to fund your retirement, world travel, or a philanthropic cause. For me, my aspirations are: 1) to build a wonderful business, 2) to provide enough for my family to live a happy life, and 3) to provide my children with a good education so that they too can fulfill their own aspirations.
Fulfillment of our purpose will require us to invest our capital wisely in great organizations with strong leaders. Thus, our mission is to seek out exceptional companies led by extraordinary individuals and invest in them intelligently. Yes, we will continue to espouse the value investing school of thought and observe the wise teachings of Ben Graham, Warren Buffett and Charlie Munger. Their methods will continue to influence our day-to-day decisions on how and where we allocate capital. Yet, in everything we do, it will always be our purpose of enabling aspirations that guides us. If we are successful in our mission, the aspirations we achieve could be life-changing, not just for ourselves, but for our loved ones and communities as well.
"Capital that is not constantly creating more and better jobs is more useless than sand. Capital that is not constantly making conditions of daily labour better and the reward of daily labour more just, is not fulfilling its highest funciton. The highest use of capital is not to make more money, but to make money do more service for the betterment of life. Unless we in our industries are helping to solve the social problem, we are not doing our principal work. We are not fully serving." —Henry Ford