Ever missed an amazing opportunity in the past? Learn from the Warren Buffett management guide – the Washtub Theory. You won’t miss an opportunity again.
In his 2017 annual letter to shareholders, Buffett talked about a “Washtub”.
He said he will use a washtub to catch all the money falling from the skies whenever the opportunity presents itself. He said that he expects such an opportunity to come once a decade.
Decade? Yes. Buffett not only can predict and plan for the right opportunity, he also has the patience to wait for it.
It is these personality traits that you need to learn as a Product Manager.
Do you know what makes Elon Musk a boss Product Manager?
Warren Buffett Management Style – The Washtub Theory
In a blog about product management, you may wonder what Warren Buffett is doing.
Warren Buffett teaches us an important skill that should be imbibed by each and every product professional.
It is the skill of identifying an opportunity AND grabbing it at the same time.
This is also a good time to make sure that you know all the must have skills for any successful Product Manager.
Opportunity exists all around us.
We just need to learn to identify it. For example, every software developer should learn how to contribute towards product management.
Many people also complain that they don’t have the authority to effectively lead or manage change.
That cannot be further from reality.
Everyone has an opinion. We just need to learn to voice that opinion.
The key trick is to learn to influence without authority.
Warren Buffett Leadership Style
Stop worrying about missed opportunities as you can’t do anything about it now. What you can do is to train yourself to make sure it doesn’t happen again.
You should also not be afraid to pivot if your product is not working. If this is your weak point, understand how to be able to manage any product.
Do you know which is the best teacher? It is crisis. The things you learn during difficult situations are generally the best things you will ever learn.
On that note, do you know how to be an effective Product Manager during a pandemic?
A lof these skills don’t seem useful on day one.
But, the more we imbibe these skills, the more aware we become of all the possibilities around us.
Slowly and steadily, we start to explore all those possibilities and eventually start to realize our true potential.
Identify The Opportunity
This is at the core of Warren Buffett’s washtub theory. Many of us are actually very good at identifying an opportunity.
If we learn to trust our intuition, we would know that an opportunity exists.
To be ready to identify the right opportunity, you need to understand your competition, your market, what is working and what is not working.
You need to not have an ego and should be ready to abandon a project even if it was your brainchild.
This means you need to learn Agile Methodology.
Plus, try to understand the differences between Agile and Waterfall.
However, it is the fear of embarrassment or ridicule that prevents us from seriously considering an opportunity.
Far too many people never realise their full potential because they simply choose to ignore an amazing opportunity.
Nobody learns the art of management in high school. But, you need to be observant and learn the skills of the trade.
Learn how to transition into product management.
And this fear is not limited to any one job function, it applies to product professionals, developers, marketers, etc.
Now would also be a good time to make sure you know the following differences –
As a Product Manager, if you have an idea, you should write it down – learn to effectively use Jira.
You should not be afraid to communicate your ideas to a large audience. A Kanban board can be very effective for this. Do you know the top 15 benefits of Kanban? Not to forget the top 15 benefits of Scrum.
Finally, Grab The Opportunity
You think identifying an opportunity is the difficult part? Nope, the part that requires patience and practice is actually the grabbing part.
After successfully identifying an opportunity, how do you act upon it?
You need to already have a strategy in place so that you don’t waste time making one when there is no time left.
For example, do you know what strategy made Google what it is today? It is the OKR framework – a must know for any Product Manager.
However, as a Product Manager, your job becomes slightly more difficult.
You not only must know when to grab the opportunity, you must also be able sell that idea to your stakeholders.
This requires you to learn how to communicate like a boss! There is no substitute for crystal clear communication.
And remember to use the KISS principle.
Warren Buffett Quotes
So hopefully now you understand Warren Buffett’s washtub theory.
While searching for the right opportunity in the product life cycle, be careful of products that are bound to fail.
You don’t want your product to end up on the list of top 10 failed products of all time.
Here is the original quote –
Every decade or so, dark clouds will fill the economic skies, and they will briefly rain gold. When downpours of that sort occur, it’s imperative that we rush outdoors carrying washtubs, not teaspoons. And that we will do.
Warren Buffett
Another management gem from Warren is around the evergreen question of how do you price products. The following quote sums up this perfectly by equating price with value.
Price is what you pay. Value is what you get.
Warren Buffett
Every manager needs to as aware as possible of all the pros and cons before taking a decision.
Risk comes from not knowing what you’re doing.
Warren Buffett
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