Book Summary

This is my book summary of The Women of Berkshire Hathaway: Lessons from Warren Buffett's Female CEOs and Directors by Karen Linder. My notes are informal and often contain quotes from the book as well as my own thoughts. This summary also includes key lessons and important passages from the book.

• Overview
• The Book in Three Sentences
• Favorite Excerpts From the Book
• More Books Like This
• Buy the Book

Overview

Although proportionally women continue to lag far behind men as CEOs and board members at major institutions, there has been a marked uptick in the number of female business leaders in recent years. Looking at the changes that have happened at Berkshire Hathaway―Warren Buffett's holding company, The Women of Berkshire Hathaway: Lessons from Warren Buffett's Female CEOs and Directors provides a unique look at the gradual shattering of the glass ceiling at one of America's top firms.

An influx of female leadership over the past few years―today there are four female CEOs, up from just one a decade ago―has invigorated Berkshire Hathaway with energy and unique female insight. Profiling these remarkable women, the book provides motivational and management information for a wide range of readers, from business students to Buffett fans.

• Looks closely at the female board members of Berkshire Hathaway and the female managers who run Berkshire Hathaway companies
• Follows the paths that brought these women to their current positions
• Explores their working relationship with their employees and Warren Buffett, and how they balance work and their private lives

The only book focusing on eight of the most powerful women at Berkshire Hathaway, The Women of Berkshire Hathaway is an inspirational read about the triumph of a group of remarkable women within a company once dominated by men.

I found the profile of Rose Blumkin, the Founder of Nebraska Furniture Mart, to be the most instructive so I'm focusing primarily on Rose Blumkin in this book summary.

The Book in Three Sentences

A fascinating look at the women who have shaped and molded Berkshire Hathaway. The Women of Berkshire Hathaway focuses on eight of the most powerful women at Berkshire Hathaway. It’s an inspirational read about the triumph of a group of remarkable women.

Favorite Excerpts From the Book‍‍

Rose Blumkin became the first-ever female Berkshire Hathaway manager when Nebraska Furniture Mart was acquired by Berkshire Hathaway in 1983. Rose was just shy of 90 years old at the time and still working 60-plus hours per week in the store. You would assume that this change in ownership would signal retirement for Rose, Chairman of the Board of “the Mart,” but she still worked for more than a decade longer, 12 to 14 hours each day, seven days a week, until she reached age 103.

Buffett later joked that he would have to alter the company’s mandatory retirement age of 100. “My god. Good managers are so scarce I can’t afford the luxury of letting them go just because they’ve added a year to their age.”

The Mart was immense even at that time. It now occupies 77 acres of central Omaha with 500,000 square feet of retail space, including a Burger King restaurant. There are also another 500,000 square feet of warehousing and distribution and over 2,800 employees.

Mrs. B’s grandson Robert “Bob” Batt became Vice President of Nebraska Furniture Mart. His office is lined with newspaper clippings of going out of business sales — as a reminder that it can happen anyone, including NFM.

Bob started working at the store when he was age 14. On his office walls hang photos and newspaper clippings of many of the major events of the company. There are also several “Going Out of Business” advertisements from competitors’ stores framed and hanging on the wall. These, he explains, are displayed so that the company will “never forget about the other stores who put themselves out of business, how it can happen to anyone, and that it must be avoided.” As he explains, if you forget history, you’re doomed to repeat it. And what an interesting history it is. . . .

Mrs. B opened a furniture store in 1937 with a $500 loan from one of her brothers. It was a 30- by 100-foot basement room below Isadore’s pawn shop. She called it Nebraska Furniture Mart. “The same day I opened, February 7th, another furniture store was opening. They had orchestra music and Hollywood stars and I only had three-line want ads because I was poor. I did that day a big business. I couldn’t get over it,” she said.

She chose to make a small profit of 10 percent over cost, bend over backwards for customers, and grow the company by selling in large volume.

Mrs. B was able to convince Marshall Field’s to sell her carpet wholesale at $3 per yard. She then resold it for $3.95 per yard. The competition was selling the very same carpet at $7.95 per yard. Naturally, carpet sold well at Nebraska Furniture Mart. Not everyone was happy about such a great deal. Her competition called her a “bootlegger.” Her reply was, “You betcha. I’m the best bootlegger in town!”23 “Three lawyers from Mohawk take me into court, suing me for unfair trade.

Three lawyers and me with my English. I can’t afford a lawyer, so I go up to the judge and say ‘Judge, I sell everything 10 percent above cost. What’s wrong? Can’t I give my customers a good deal? I don’t rob my customers—I’m making a fortune as it is.” The judge agreed, threw out the case, and bought $1,400 worth of carpeting from Mrs. B the next day.24 The publicity from this trial was worth far more than Mrs. B could have afforded to purchase in advertising.

When the Korean War broke out in 1950, business slowed down and Mrs. B found that she was unable to pay her bills. She was worrying night and day. A local banker came into the store to buy a cabinet and asked why she was so upset. After listening, he gave her $50,000 of his personal money as a 90-day loan.

She had to think of a way to earn the money to pay back the loan, so she quickly rented the Omaha city auditorium for $200 per day and held a three-day sale. She took in $250,000 from the sale, paid off all her loans, and never borrowed money again.

Bob Batt remembered a luncheon where both he and Mrs. B were being honored. The luncheon was dragging on. At about 1:15 Mrs. B stood up and hollered, “What’s wrong with you people? Don’t you have jobs? I’m going back to work.” And she left. And as Warren Buffett said during opening remarks at the 1993 Berkshire Hathaway Annual Meeting, “I’d like to introduce Berkshire’s managers, except Mrs. B couldn’t take time off from work for foolishness like a shareholders’ meeting.”

Mrs. B developed successful merchandising practices long before they were adopted by mainstream retailers. She established the idea of a discount store making small profits on large volumes, undercutting the competition and giving the consumer a bargain. Sam Walton didn’t open his first discount store, leading to the Wal-Mart empire, until 1962.

The company still follows these principles. It is run very fiscally conservatively. Mrs. B always felt that the days of the Depression could return at any time. “We still run the company like the Depression is coming back,” says Bob Batt. The administrative offices are no bigger than necessary. **There is no debt and, therefore, the company was able to survive the economic downturn of 2008. There have never been any layoffs.**

Jerry Pearson, a former carpet salesman, said, “People jump when she yells. Her favorite word in describing employees who don’t meet her standard is ’stupes.’ She has very little respect for anybody whose mind power is lower than hers, and that’s everyone. She’s the most brilliant salesperson I’ve ever met, but she’s a lousy manager. She is terribly abusive of her employees. She charms her customers. She’s a workaholic. She operates on almost zip margin. She is one tough, feisty woman.”

Rose Blumkin was extremely generous throughout her life, although she said, “Everything I made stayed in the business. I never had a vacation, never went any place, never made parties. Accumulated penny by penny.” It’s true that she did not spend on herself, but she donated money and merchandise to many recipients.

She was forever grateful that she was able to come to the United States and loved her adopted homeland. Mrs. B’s favorite song was “God Bless America.” She would listen to it in her CD player at home and on a cassette tape in her car. “The people who were born in this country don’t appreciate all these wonderful things, like those who came from out of the darkness,” she said. “I love the United States since the day I come here.

On her 100th birthday (celebrated at Mrs. B’s Clearance Warehouse), she said, “All my wishes come true. American people were wonderful to me. They are the best in the world. And I made a success. I never expected that much. I did a pretty good job.”

For more, I highly encourage you to order The Women of Berkshire Hathaway: Lessons from Warren Buffett's Female CEOs and Directors and read the entire book yourself.

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