The degree to which you need to learn the nuts and bolts of the industry you are entering depends on the degree to which the business will depend for its success on your on-hands management at the nuts and bolts level. Warren Buffett never “learned the ropes” at the execution level in the insurance, jewelry, soft drink, or other businesses he has owned, nor has he done so in his recent purchase in Israel.
The 19th century military thinker, Carl von Clausewitz, once said that the Minister of Defense need not be a general. The idea is that if all we need is another general, then we don’t really need a minister of defense. But the fact obviously is that we do – we need someone to understand the fundamental principles of strategic operations, and leave the operational and tactical nuts and bolts to effective managers at those levels.
That’s what Buffett does. He understands the industry and its promising attributes for investment, and then hires managers who understand how to conduct business in that industry. Many people think of entrepreneurs as people who have some sort of passion for a particular enterprise. These are the sort who start the business in their garage, and they have obviously learned the ropes – but they haven’t necessary learned the business, or the industry. That’s what managers add to the mix: not technical skill, but management analysis and strategic implementation skills.
Leave boot camp out of it. If you are an investor-entrepreneur, or even a senior manager or CEO, then just pick your war, and hire your generals to fight it.
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[...] is line-level experience in the one thing that really does count: decision-making. And this is not a new idea. The 19th century military thinker, Carl von Clausewitz, argued that a minister of defense need not [...]
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