Avoid unforced errors and stay humble: Warren Buffett's leadership lessons

For chief executives across America, Warren Buffett isn't just an unrivaled investor.

- Chip Cutter

The Oracle from Omaha is a regular source of management wisdom that business leaders have drawn on for decades.

Buffett hasn't been shy about sharing his views on how companies should operate. He has railed against corporate bloat, heaping scorn on PowerPoint presentations, meetings, overpaid board members and what he has described as "make-work activities" at companies. At Saturday's Berkshire Hathaway meeting, he once again called bureaucracy dangerous and said many big companies could be run better.

David Novak, former CEO of Yum Brands, recalls a simple question from Buffett that changed the way he ran the fast-food giant behind Pizza Hut, Taco Bell and KFC.

"Do you ever talk about what could go wrong?" Buffett asked him over lunch at an Omaha KFC. Rarely, Novak replied. Buffett suggested being upfront about potential challenges could build trust.

From then on—at the end of presentations to investors and others—Novak says he often shared two or three potential pitfalls the company faced.

"Once I started doing it, I realized he was 100% right on," Novak said.

Here's a sample of Buffett's advice, from the CEOs who took it to heart:

Jim Weber, former CEO of Brooks Running

Jim Weber's first meeting with Buffett was around 2011, and Brooks was a subsidiary of Fruit of the Loom, a Berkshire company.

Over three hours in Buffett's Omaha office, Weber walked through the company's strategy and ambitions.

"Why doesn't Nike just squish you?" Weber recalls Buffett asking.

Weber explained that Brooks had built a loyal customer base of performance runners, who tended to buy multiple pairs of Brooks sneakers a year. Months later, Buffett decided to spin Brooks out of Fruit of the Loom and into its own Berkshire unit.