In "The Art of War," adhering to the "moral law" is a core strategic principle that ensures loyalty in crisis. Buffett applies this by cultivating a reputation for fairness and character. This becomes a competitive advantage, attracting partners and deals that others cannot access, proving ethics are a strategic asset.
Warren Buffett's reputation for honesty isn't just a moral stance; it's a core business strategy. It attracts private business owners seeking a trustworthy partner, leading to a steady flow of exclusive, high-quality acquisition opportunities that competitors never see.
In a world rife with shortcuts, Molly refused offers that would compromise her game's integrity, like letting pros play for a fee. This commitment to trustworthiness and investing in people built immense relational capital. This reputation became her core competitive advantage, creating a high-trust environment that attracted the best clients.
Nietzsche's thought experiment of eternally reliving one's life forces moral clarity, mirroring Warren Buffett's "inner scorecard." Both concepts champion making decisions based on internal principles and integrity, rather than external validation, social pressure, or legality.
Sun Tzu's "Art of War" is largely written in the negative ("don't do this"), a "via negativa" approach. This simplifies decision-making by focusing on eliminating obvious errors. In investing, this translates to using checklists of past failures to avoid ruin, ensuring that what remains is the only viable path to take.
Instead of engaging in a costly activist battle himself, Buffett practiced Sun Tzu's principle of 'winning without conflict'. He waited until activists like Icahn and Einhorn had pressured Apple's management to implement a shareholder-friendly buyback policy. Once the opportunity was 'perfected' by others, he deployed capital peacefully and massively.
Business is a unique domain where you can pursue selfish goals (building a large, profitable company) and selfless ones at the same time. By building a successful company with ethical, people-first practices, you force competitors to adopt similar positive behaviors to compete, thereby improving the entire industry for everyone.
A sustainable competitive advantage is often rooted in a company's culture. When core values are directly aligned with what gives a company its market edge (e.g., Costco's employee focus driving superior retail service), the moat becomes incredibly difficult for competitors to replicate.
A business decision aims to gamify and optimize a specific outcome. A principle decision is based on core values, made without knowing the outcome, to be remembered favorably regardless of the result. Sticking to principles may mean losing a short-term battle but ultimately wins the war by building trust.
Generosity towards employees and customers is more than just good ethics; it's a strategic move in the iterated game of business. It signals your intent to cooperate, which encourages reciprocal cooperation from others. This builds trust and leads to superior long-term outcomes versus a defect-first approach.
Instead of directly praising his successor Greg Abel, Buffett's final letter is a masterclass in indirect endorsement. By repeatedly emphasizing traits like integrity and dependability, he frames character as the most crucial CEO qualification, implicitly anointing Abel without needing to mention his name often.