Leadership In Contemporary Organization Of Assessment Answer

The contemporary business leader selected here is Warren Buffet for the study of traits and characteristics which has led to success. Analysing these leaders and studying them help in understanding their approach towards their team. Business leaders like Warren Buffet are famous globally and have many followers who invest in the stock market by using the principle laid down by Buffet through his investment career. 

Evaluate the leadership characteristics, skills, and knowledge of the Warren buffet

Warren Buffet is a successful business leader and philanthropist who have achieved great success in investments. Some of the leadership characteristics that have allowed him to be successful are:
Humility- Warren Buffet is a very humble person and is not a boast of his success in the investment domain. He donates a huge sum of money every year for the welfare of the less fortunate members of the society (West & Anthony, 2000). He is known to be a great philanthropist and has also created legal documents which mention that all his wealth will go to Bill & Melinda Gates Charity Foundation. This aspect of a leader makes him more approachable by his teammates and more open to trying new ideas and concepts.
Frugality- Warren Buffet is known to possess this characteristic as the person is known for not using much of the money he makes. One of the BBC news reported, "Mr. Buffet has made more money than almost everyone but appears to have no use for it personally. This characteristic of the leaders is known to make them successful in the long run as the savings due to this characteristic is huge (Tier, 2009). It helps the person scale in life and from an organizational point of view; it helps to reinvest the profits for future growth of the company. Even in the times of recession, this is an important characteristic as it leads to the sustainability of the organization. Also, the leaders who are frugal tend to be popular among the team members as they always have enough money to make investments in important projects.    
Patient- Bill Gates is known to be patient as he often waits longer for his investment to bear fruitful results. He avoids recklessness and takes well-planned decisions which help him to grow his wealth. For a person who wants to make a good return on the stock market, this characteristic is of great help as it avoids short-term losses. Buffet started investing in the stock market at a very early age and learned that it is beneficial to be patient.

Influence of past leadership in current leadership characteristics

As like all human beings, Warren Buffet has also made mistakes in past which have helped him to learn and evolve as a better leader. Some of the past failures which had a positive impact on his current leadership skills are:
Purchasing Berkshire Hathaway- Warren Buffet had told once that he made a mistake by buying this company on the anticipation of higher profits even when this textile company was not doing well (Thunuguntla, 2010). He invested in this company in 1962, and when the stock price fell, he brought in more just to realize profits when the market does well. Later he took control of the company and kept it running for the next 20 years. This decision cost him over $200 billion. This made him realize that emotions should not be led in the way of financial decisions. Now he is a leader who never let emotions in the way of doing business.
The investment made in Tesco- Warrant Buffet had an investment in this company of worth 415 million shares. In the year 2014 when the company was not doing well, and the stock price fell, Buffet sold only partial shares which led to $43 million profit. But he was slow to act on the other shares. This led severe losses as the share price never reached the previous position. Though this mistake he learned to act promptly on any decision.
Debt financing through future energy holdings- Buffet sourced the debts for Berkshire of $ 2 billion through energy future holdings (Bennis, 1999). While taking this decision, he did not consult any other official of the company including the vice-chairman of the company. This cost him as this action led to a loss of around $873 million. Later he learned that he should consult a business partner about any important decision which affects the company as a whole.
Lack of diligence in buying General Reinsurance- The investment by Buffet in General Reinsurance was characterized by an overly optimistic outlook about the company (Buffett & Cunningham, 1995). During the analysis for investment, Buffet ignored the aspects like underwriting losses of General Reinsurance, the possibility of terrorist's attacks, etc. This investment decision made to experience loss of $800 million but made him learn that one should double-check the analysis and cross-check with analysts before becoming very sure about an organization.
Lost the chance to invest in Google- Warren Buffet found it difficult to understand the models of tech stock and hence avoided the investment in Google when the share prices were available as low as $10 per share. Years after this, he still regrets about this loss of opportunity and clearly indicates to other investors to carefully analyze each and every opportunity even if it takes little extra effort to understand those (Hughes et al., 2010).

Development of leadership skills

Most of the important skills related to investing which has made him a business leader have been developed at a very early age. Though, over the years of his investing period, these skills became more refined and strategic. 
He started his career by investing in stocks at an early age of eleven years. As initially he as a young boy he did not have much money, he had to perform various menial works to save some to invest in stocks (Bennis & Ward Biederman, 2010). He worked in his father’s grocery store and also took side jobs as washing cars, and selling newspapers, etc. This start of his career made him learn the value of money and developed him as a humble and frugal person. Over his entire life, though he turned wealthy, he did not make lavish use of his money and had the habit of saving. He always stayed humble to the people around him and respected each one’s work. 
As he grew and joined Columbia Business School, the professors there Benjamin Graham and David Dodd taught Buffet the importance of value investing which took his investment career to the next level, and he became more professional in his work (Thunuguntla, 2010).

Current leadership methods employed in the Leader

The characteristics of the leadership approach which he follows as a business leader are:
Splitting the role of CEO and Chairman- Warren Buffet believes that CEO and the chairman of an organization should not be the same person. This strategy helps to segregate the motives and works effectively for the success of the business enterprise.
Making sure that the board members address to shareholders - Buffet always ensures that the shareholders of any company should be fully satisfied with the queries about the working of the company and its future prospects (Lupo, 2008). Thus the board members should be responsible for addressing any issue raised by shareholders.
Building Trust- One of the important approaches of Buffet’s leadership skills is building trust among the members. He believes that this aspect is very important to achieve any objective together (Thomsett, 2013). The members of the organization should trust each other's work and work in coordination with one another.
Staying humble- Warren Buffet believes in staying humble as a business leader and does not shy away from admitting his mistakes. He started investing at a very young age and since then had made a lot of mistakes. But he has been very open in admitting his mistakes and giving advice which can save others from the investing mistakes he has done (Hagstrom, 2000). 
Experience teaches best- Warrant Buffet the principle of experiencing every aspect which he doubts of its results. Over his investing period, he has learned a lot of important aspects by experiencing it by himself (Hopewell, 1994).

Conclusion

Leaders like Warren Buffet influence other investors in the type of success which can be achieved in the investment business. The mistakes Buffet did in his investment career had made him more mature and intelligent investor, and he encourages others to avoid those mistakes. Studying the traits and characteristics of any leader help to understand the qualities which make a good leader and how those qualities can be imbibed. 

References

Bennis, W. (1999). The leadership advantage. Leader To Leader, 1999(12), 18-23. http://dx.doi.org/10.1002/ltl.40619991205
Bennis, W., & Ward Biederman, P. (2010). My earliest experiences in leadership. Leader To Leader, 2011(59), 27-32. http://dx.doi.org/10.1002/ltl.452
 Buffett, W., & Cunningham, L. (1995). The essays of Warren Buffett. [New York, N.Y.?]: [Benjamin N. Cardozo School of Law?].
Hagstrom, R. (2000). The Warren Buffett portfolio. New York: Wiley.
Hopewell, L. (1994). Common Mistakes of Fiduciaries Responsible for Investments. The Journal Of Investing, 3(4), 46-51. http://dx.doi.org/10.3905/joi.3.4.46
Hughes, J., Liu, J., & Zhang, M. (2010). Overconfidence, Under-Reaction, and Warren Buffett’s Investments. SSRN Electronic Journal. http://dx.doi.org/10.2139/ssrn.1635061
Lupo, T. (2008). Warren Buffett. New York: Weigl Publishers.
Thomsett, M. (2013). Getting started in stock investing & trading. Singapore: J. Wiley & Sons.
Thunuguntla, J. (2010). What if History repeats, Warren Buffet to Become the Chairman of Goldman Sachs?. SSRN Electronic Journal. http://dx.doi.org/10.2139/ssrn.1755147
Tier, M. (2009). The winning investment habits of Warren Buffett and George Soros. London: Kogan Page.
West, S., & Anthony, M. (2000). Storyselling for financial advisors. Chicago: Dearborn.