aprj 699 applied project - athabasca...

APRJ 699 – Applied Project

Billion Dollar Giants Thriving Under Pressure:

Are Warren Buffet and Larry Ellison Renaissance Leaders?

Submitted by: Derek Christian Submission Date: February, 2014

Word Count: 17,455 Applied Project Coordinator: Dr. Teresa Rose

Applied Project Supervisor: Dr. Stephen Murgatroyd

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Abstract

Throughout history leaders have always represented role models, facing

challenges, creating or adapting to change and inspiring followers. The 21st

century has created new role models. With the global expansion of capitalism,

innovative technological developments and a knowledgeable workforce driven by

a consumer culture and the accumulation of wealth, it is only natural that people

would look to the Fortune 500 list for role models. Business leaders like Warren

Buffett and Larry Ellison, who have acquired immense personal wealth and

steered their organizations through these challenging times, are portrayed as the

best examples of successful leadership. Business executives all over the world

have been told that in order to be become successful leaders they should study,

understand, replicate and, whenever possible, associate with the best. For

Stephen Murgatroyd and Don Simpson (2010), creators of the Renaissance

Leadership theory, the most successful leaders of our time will see global,

demographic, economic and technological challenges as opportunities and help

to create a new reality beyond the world of business.

The purpose of this study was to explore the leadership styles and practices

of Warren Buffett and Larry Ellison within the context of the Renaissance

Leadership Theory in order to discover if these individuals represent effective

leaders for anticipating and meeting the challenges of the 21st century. Following

a brief historical overview of developments in leadership theory, the drivers for

change in our current global environment will be discussed. The six practices of

Renaissance Leadership are reviewed in detail along with the characteristics of a

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Renaissance organization. Personal profiles of Buffett and Ellison will be

presented, focusing on their overwhelming personal and organizational success

in their respective fields of investing and technology.

Using qualitative methodology, this research relied on a content analysis of

secondary data sources to identify themes and patterns. Findings reveal that

while Buffett and Ellison are both successfully leading their organizations through

the unpredictable, knowledge-based global economy, only Buffett represents a

renaissance leader. Buffett not only exhibits all six characteristics of a

renaissance leader, using the theoretical framework developed by Murgatroyd

and Simpson (2010), but is also guiding a renaissance organization. He is a

leader with high integrity who has changed the investment world with his

innovative strategies and recognizes the value of a knowledgeable workforce.

Most importantly, Buffett strives to make the world a better place through his

ethical conduct, responsibility to shareholders and his teaching. This study

revealed that while Larry Ellison is certainly on the path to becoming a

renaissance leader, he falls short in the area of personal mastery. While there is

no doubt Ellison’s innovative product ideas and high performance company have

changed the way businesses operate throughout the world, his past unethical

conduct is not characteristic of a renaissance leader or a renaissance

organization. The limitations associated with this study as well as the

Renaissance Leadership Theory will be discussed and recommendations made

for greater attention to the role of followers. The implications of this research

address the importance of ethical leadership in the 21st century. Practical

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suggestions are made concerning the way in which leaders can behave ethically,

innovate to create high performance organizations while simultaneously acting as

guides and positive role models in the midst of this complex period of modern

Renaissance.

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Table of Contents

Abstract ................................................................................................................. ii

Table of Contents .................................................................................................. v

Chapter One: Introduction ..................................................................................... 1

Research Purpose ............................................................................................ 2

Research Questions ......................................................................................... 3

Importance of Studying Successful Leaders and Renaissance Leadership ..... 3

Chapter Two: Literature Review............................................................................ 5

Brief Historical Overview of Theoretical Developments .................................... 5

Challenges of Leadership in the 21st Century .................................................. 9

Globalization............................................................................................... 10

Knowledge-based workforce ...................................................................... 11

Competition ................................................................................................ 11

Volatile economy ........................................................................................ 12

Public mistrust ............................................................................................ 13

Technology ................................................................................................. 15

Demography ............................................................................................... 15

Social and environmental responsibility ..................................................... 16

Chapter Three: Renaissance Leadership Theory ............................................... 17

Six Practices of Renaissance Leadership....................................................... 17

Practice personal mastery .......................................................................... 18

Applying a “Glocal” mind set....................................................................... 19

Accelerating cross-boundary learning ........................................................ 19

Thinking back from the future ..................................................................... 20

Leading systemic change ........................................................................... 20

Driving performance with a passion ........................................................... 21

Renaissance Organizations ............................................................................ 21

Chapter Four: Personal Profiles .......................................................................... 23

Warren Buffett ............................................................................................... 23

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Larry Ellison .................................................................................................... 23

Chapter Five: Methodology ................................................................................. 28

Research Design and Data Collection ............................................................ 28

Data Analysis .................................................................................................. 28

Chapter Six: Results ........................................................................................... 31

Thriving Under Challenges of the 21st Century ............................................... 31

Warren Buffet ............................................................................................. 32

Globalization .......................................................................................... 32

Knowledge-based workforce .................................................................. 34

Competition ............................................................................................ 34

Volatile economy .................................................................................... 35

Public mistrust ........................................................................................ 36

Technology ............................................................................................ 38

Demography .......................................................................................... 39

Social and environmental responsibility ................................................. 39

Larry Ellison................................................................................................ 41

Globalization .......................................................................................... 41

Knowledge-based workforce .................................................................. 42

Competition ............................................................................................ 11

Volatile economy .................................................................................... 44

Public mistrust ........................................................................................ 44

Technology ............................................................................................ 46

Demography .......................................................................................... 46

Social and environmental responsibility ................................................. 47

Renaissance Leadership Practices: Warren Buffet ........................................ 48







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Renaissance Leadership Practices: Larry Ellison ........................................... 56







Renaissance Organizations ............................................................................ 64

Berkshire Hathaway ................................................................................... 64

Oracle ......................................................................................................... 66

Chapter Seven: Analysis ..................................................................................... 69

Summay of Findings ....................................................................................... 71

Limitations ...................................................................................................... 72

Chapter Eight: Recommendations ...................................................................... 70

Theoretical Implications .................................................................................. 70

Practical Implications ...................................................................................... 71

Chapter Nine: Conclusion ................................................................................... 74

References ......................................................................................................... 76

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Chapter One: Introduction

Throughout history there has always been a fascination with great leaders,

particularly those who can overcome significant challenges to achieve success.

In the 21st century, Warren Buffett and Larry Ellison represent two extraordinary

leaders who have guided their organizations through intense competition,

unprecedented technological developments, economic instability and

globalization. Successful business leaders have come and gone, but few have

remained a “constant” threat in the business world and achieved the status of

“megabillionaire” in the midst of change and uncertainty (Hagstrom, 2005 p. 1).

As CEO of Berkshire Hathaway Inc., one of the largest publically traded

investment companies in the world and among the “most admired,” Warren

Buffett has become a global symbol for successful leadership (Colvin, March 21,

2011). As of January 2014, Warren Buffett represented the second wealthiest

man in the United States and the fourth richest man in the world with a reported

net worth of 58.5 billion dollars (Forbes, 2014a). Buffet has investors all over the

world following his every move and leaders in every industry attempting to

replicate his leadership style and strategies. Since 2000, Larry Ellison, CEO of

Oracle Corporation, has also been consistently among the top five wealthiest

people in the world (Smith, 2010). He has been described as “one of the most

successful entrepreneurs” in the 21st century (Finkle & Scorseby, 2012 p. 111).

A “first mover and strong current leader in the relational database market,” his

company continues to rank among the top 50 most admired companies in the

world (Finkle & Scorseby, 2012 p. 117). While Ellison has been described by

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some as a “narcissist,” (Maccoby, 2004) his engaging and animated leadership

style has captured the attention of leaders around the world.

There is little doubt that Buffett and Ellison are strategic leaders, able to

adapt to change and guide their organizations through uncertainty. What is less

clear is exactly how these leaders have faced the challenges of the 21st century

and whether or not these men are forward thinking, “Renaissance Leaders.”

Leaders who exhibit the six characteristics of Renaissance Leadership anticipate

and plan for change and actually make their visions for the future a reality. Their

companies typically represent Renaissance Organizations, thriving in the midst of

challenging times. Various leadership theories have been used in the past to

provide insight into why leaders are so successful but few attempts have been

made to conduct a systematic analysis of effective, innovative leaders and

organizations using the concepts and practices of the Renaissance Leadership

model.

Research Purpose

The purpose of the study will be to obtain a more comprehensive

understanding of the leadership styles of Warren Buffet and Larry Ellison and the

organizations they lead within the context of the Renaissance Leadership theory.

More specifically, this project will be exploring how two of the most successful

business leaders in the world are achieving success and driving high

performance organizations within a highly competitive, rapidly changing and

complex global knowledge economy.

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Research Questions

The following research questions were developed to address the lack of

research on Renaissance Leadership and Renaissance organizations, explore

the application of this theoretical framework and help achieve a more

comprehensive understanding of how successful leaders drive high performance

companies in the midst of an ever changing and unpredictable global

environment.

1. How have Warren Buffett and Larry Ellison overcome the challenges

associated with an unpredictable and ever changing global economy in

the 21st century?

2. Do the leadership styles, skills and behaviors of Warren Buffet and Larry

Ellison reflect the ideas and assumptions of the Renaissance Leadership

theory?

3. Do Warren Buffett and Larry Ellison lead “renaissance organizations”?

Importance of Studying Successful Leaders and Renaissance Leadership

This research project has implications in a number of different management

domains including, but not limited to leadership, organizational design and

human resources management. Exploring the leadership of Warren Buffet and

Larry Ellison within the context of the Renaissance Leadership theory provides

valuable insight into the practical application of this theoretical approach,

contributes to leadership development and offers a framework for improving the

productivity and performance of any organization. Renaissance leadership is, in

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part, an examination of how leaders can “become resilient in the face of

challenge, threat and uncertainty” (Murgatroyd, 2013). In order to achieve a

competitive advantage, leaders cannot afford to ignore the complex external

environment. The Renaissance leadership framework not only provides a

theoretical explanation for leadership skills and behaviors, but also offers

practical strategies for anticipating external threats at the individual and

organizational levels. A comprehensive analysis of the leadership practices of

Buffet and Ellison provides all business leaders with an opportunity to see

renaissance leadership in practice. Rather than fear change and uncertainty,

leaders of the future can learn to accept, anticipate and even thrive in difficult

conditions. The challenge for future leaders is “not only how they will respond to

change but also how they can actively and constantly create change” (Gill,

Levine & Pitt, 1998 p. 50).

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Chapter Two: Literature Review

Brief Historical Overview of Theoretical Developments

For decades, members of the academic community have been fascinated

with the topic of leadership. The importance and value of great leadership

cannot be overstated. Leaders produce change, create vision, establish

strategy, communicate goals, build teams, inspire and motivate people to

accomplish extraordinary things (Kotter, 1996). Theoretical approaches to

leadership have traditionally focused on biological, psychological and sociological

explanations for successful leaders. Trait theories represented some of the

earliest attempts to explain effective leaders, arguing that specific personality

traits were deemed to be the most important. In 1841, Thomas Carlyle

developed the “Great Man Theory” and declared “the history of the world is but

the biography of great men (p. 127). For Carlyle (1841), heroes shaped history

through their intellect, leadership activities and divine inspiration. Leadership

was seen as something inherent in the individual.

Over decades, theoretical developments in this area evolved to include

personality testing, the study of individual dispositions, and, more recently,

Achievement Motivation Theory, Leader Motive Profile and House’s Theory of

Charismatic Leadership (House & Aditya, 1997 p. 412-413). Characteristics

such as empathy, perspective taking and support captured the attention of

leadership theorists and created a new focus on the importance of emotional

intelligence (Wolff et al., 2002 p. 520). Common traits identified over the years

include drive, leadership motivation, intelligence or cognitive ability, self-

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confidence, integrity, honesty, curiosity and creativity (AMA, 2005 p. 2; Peirce &

Newstrom, 2011 p. xxiv; Kirkpatrick & Locke, 1991; Stogdill, 1974). Expanding

on the trait of integrity, Bennis (2005) has suggested that great leaders should

have ambition, competencies and a strong “moral compass.” The practical

application of trait theories for the business world has been to search for leaders

who have the best personal qualities and characteristics. According to Kouzes

and Posner (2005), leadership traits are not only useful for selecting and

developing leaders but are also important for communicating credibility to

followers.

Between the late 1940s and 1960s, researchers began to conceptualize

leadership as a behavior (Pierce & Newstrom, 2011). Focus turned away from

traits to what exactly successful leaders do and how they act. Early research in

this area conducted by Bowers and Seashore (1966) focused on behaviors such

as support, interaction facilitation, goal emphasis and work facilitation (p. 247).

Various behavioral taxonomies were developed and broad leadership styles were

identified. For example, Kurt Lewin and associates (1939) identified three

different leadership behaviors or styles including autocratic, democratic and

laissez-faire to explain a leader’s level of involvement in the decision making

process. Developments in this area have also focused on participative

leadership, where leaders are committed to involving employees, peers and

stakeholders in the decision making process (Likert, 1967). Popular theories of

today, such as strategic leadership, continue to rely on the assumptions

associated with behavioral theory (Bass, 2007). Behavioral approaches were an

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important development in our understanding of leadership, representing the first

attempts to explain leadership as something individuals could learn.

Theoretical explanations for successful leadership were not always focused

on the individual. Social scientists, such as Karl Marx, have long recognized that

individuals are a product of the social environment. Often referred to as

“situational leadership theories,” theoretical developments in this area assume

that leaders are influenced by various situational factors (Pierce & Newstrom,

2011 p. 193). The most widely cited situational theories include: the Contingency

Theory of Leadership (Fiedler as cited in Pierce & Newstrom, 2011 p. 195); the

Path-Goal Theory of Leadership Effectiveness (House, 1971); Vroom and

Yetton’s Normative Model (1973); and, the Cognitive Resource Thoery (Fidler &

Garcia as cited in House & Aditya, 1997). Some situational leadership theories

focus on the interaction between leaders and followers while others assume that

a combination of capabilities, behaviors and social context has a more significant

influence on leadership success.

With the development of the transformational leadership theory, James

MacGregor Burns (1978) argued that the interactions between leaders and

followers could actually create meaningful change. Visionary leaders appeal to

the higher ideals and values of the followers and, in the process, effectively help

both parties achieve “higher levels of morality and motivation” (Transformational

Leadership Report, 2007 p. 4). The primary emphasis of the transformational

theory is on the follower’s long-term development or “self-actualization” through

empowerment (Dvir et al., 2002 p. 736). This explanation of successful

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leadership shifts the emphasis away from competition, power and the bottom line

to a more socially responsible form of leadership, concerned with making a

contribution to the common good (Transformational Leadership Report, 2007 p.

10). This approach also recognizes that great leaders exhibit innovative-oriented

leadership and encourage employees to be independent and creative in their

problem solving (House & Aditya, 1997 p. 463). One of the most important

contributions of the transformation theory is its emphasis on organizational level

activities and the ability for leaders to create change.

The level 5 Leadership Theory, developed by Jim Collins (2001a) also

attempts to explain successful leadership at the organizational level. In fact,

when Collins began his research, his goal was to identify the factors that helped

average companies become outperformers or great companies (Satell, 2013).

According to Collins (2001b), Level 5 leaders possess “extreme personal humility

and professional will” and these traits act as a “catalyst” for transforming good

companies into great ones (p. 3). Challenging previous theories that suggest

charismatic leaders are needed to create a vision and inspire action, Collins

(2001a) suggests that modest, smart and ambitious leaders will be more effective

for helping companies achieve greatness. This theoretical approach assumes

that the most successful leaders have: “left an impact on their companies; have

managed their companies successfully through a crisis or some kind of

transformation; and, have created a company that will have a legacy beyond their

leadership” (Collins, 2014). What sets this theory apart from previous theories is

its focus on change and the impact a leader has on the future of an organization.

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This brief theoretical overview demonstrates how different explanations for

successful leadership have been developed. What is also evident from this

review is how past theories have failed to take into consideration the

unprecedented challenges associated with the 21st centuries and their impact on

leadership. In recent years, there has been widespread agreement that the

“overwhelming problems facing humanity” in this century call for new leadership

models and leaders who can overcome the risks and challenges with “courage”

and “integrity” (Bray, 1994 p. 138). The Renaissance Leadership theory takes on

this challenge, suggesting that leaders and organizations can not only thrive

within the current global economy but can also create positive changes

throughout the world. Building on the theoretical developments of the past, the

Renaissance Leadership theory also recognizes that successful leaders will need

to possess specific traits, exhibit certain behaviors, have positive interactions

with employees and promote transformation in people and the organizations they

operate within. Before discussing the basic practices of Renaissance

Leadership, it is important to examine some of the most significant challenges

facing leaders within our rapidly changing world.

Challenges of Leadership in the 21st Century

To understand the skills and practices required for effective leadership in

today’s business world, it is important to examine the context for leadership in the

21st century. Leaders, like Warren Buffet and Larry Ellison, face significant

challenges within a complex and unpredictable global economy. Peter Drucker

(as cited in Leavy, 2013) explained, “CEO’s represent the link between the

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inside, that is the organization, and the outside of society, economy, technology

markets and customers” (p. 12). Recognizing the unprecedented economic,

social, technological, and ecological changes is important because it not only

highlights the overwhelming challenges leaders face but also provides a

foundation for the type of leadership needed to successfully operate high

performance companies within the current, knowledge-based economy.

Prior to the 1960’s, companies operated within an industrial era

characterized by manufacturing processes, the division of labour, and top-down

leadership. In the 1970’s, however, a new age emerged characterized by a

“global, highly competitive, fast changed knowledge-based economy”

(Murgatroyd and Simpson, 2010 p. 15). Murgatryod and Simpson (2010) argue

that the world is currently experiencing a period of dramatic and fundamental

change that is best described as a “modern renaissance” (p. 12). Not unlike the

iconic, historical renaissances of the past, we are living through a major

paradigm shift that impacts every aspect of society and ultimately changes the

way business operates throughout the world.

Globalization

Today’s leaders operate within a global environment. With globalization “the

distinction between foreign and domestic operations became increasingly

irrelevant” (Daft & Armstrong, 2009 p. 136). Global corporations operate as if the

entire world were a single entity (Levitt, 1999 p. 249). The skills and strategies

that were once effective for “domestic leadership” of the past are no longer

enough. As Osland, Bird and Oddou (2012) explain, “global leadership is

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extreme leadership” or “leadership under conditions of extreme complexity” (p.

107). Conducting business in a global environment means that leaders also

have to consider the barriers that can make it difficult to enter into new markets.

Global leaders confront a range of ever-changing environments that span

cultures, geographies and socio-political systems (Rosen, Digh, Singer & Philips,

2000).

Knowledge-based workforce

Leading and managing organizations across various countries, with

employees of diverse backgrounds and under the guidance of unique national

laws and cultural values represents a considerable challenge for business

leaders (AMA, 2005). Leaders not only need to be sensitive to the diversity of

employees within a global context but must also recognize that the relationship

between leaders and employees has changed in a post-industrial era.

Murgatroyd and Simpson (2010) identify the challenges associated with a new

knowledge-based economy that is dependent upon a highly educated workforce.

Motivating, inspiring and collaborating with this type of workforce represent a

significant departure from the relationship leaders had with their employees in the

industrial era, where skilled labourers focused on a specialized task in the

division of labour. A well-educated workforce requires an innovative, new

leadership approach.

Competition

Globalization has also created a fiercely competitive business environment.

Advancements in transportation and technology have made it possible to easily

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interchange products, services, and ideas rapidly throughout the world. Initially,

globalization was characterized by developed economies integrating with less

developed economies by means of foreign direct investment, the reduction of

trade barriers as well as other economic reforms (Isac,et al., 2011). Today,

economic developments in Asia, the Middle East, and the BRIC countries of

Brazil, Russia, India and China have made “competition truly global” (Murgatroyd

& Simpson, 2010 p. 14). In some industries, like technology, competition

represents the biggest challenge facing leaders. Organizations within this

industry must “constantly innovate and improve their product offerings” (Finkle &

Scoresby, 2012 p.123). A major risk is that patents and technology can be

infringed upon, eroding the value of a company’s intellectual property (Finkle &

Scoresby, 2012).

Volatile economy

A highly volatile global economy represents another significant challenge.

The worldwide financial crisis that began in 2007 has had an unprecedented

impact on every company, particularly investment companies like Berkshire

Hathaway. After the American housing market peaked between 2005 and 2006,

the default rates and foreclosures on adjustable-rate mortgages began to

increase (QFinance, 2011). Global investment in mortgage-backed debt and

securities was essentially frozen. These actions caused the financial markets to

tighten, a recession resulted and slow economic growth was projected for the

long-term future. This crisis resulted in unprecedented turmoil and change for

banks and financial institutions all over the world.

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Even large multinational, Fortune 500 companies had to cope with

mortgage foreclosures of epidemic proportions, significant debt burdens,

government intervention, slow economic growth and angry consumers who have

become increasingly distrustful of financial institutions. Berkshire Hathaway, for

example, suffered a 77 percent drop in earnings during the third quarter of 2008

(Smith, 2010). As of April, 2010 the International Monetary Fund estimated that

global bank loses from the financial crisis had already totaled 2.28 trillion dollars

U.S. (QFinance, 2011). With greater government involvement, more stringent

regulations and lower profit margins, every business has faced significant risk,

uncertainty and change within the past seven years. In the context of this type of

environment, where uncertainty becomes the new norm, it is difficult for decision

makers and organizational leaders to predict and plan for change.

Public mistrust

Unfortunately, another characteristic of the 21st century is public mistrust

and anger over unethical behavior in business. One area of particular concern is

excessive compensation. For decades, the media, consumers, labour unions

and various stakeholders have criticized the use of compensation packages for

high ranking executives in the United States and Canada. The widening gap

between what upper managers earn compared to the average worker has

created public outrage. In 2007, at the brink of the global financial crisis, CEO’s

on the S&P 500 list earned an average of $10.5 million annually (Landy,

November 15, 2011). In the midst of a devastating and global economic crisis

we learned that the problems with compensation were much more widespread,

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persistent and systemic” (Bebchuk & Fried, 2006). While global banks were

losing trillions, the five highest paid CEO’s in the U.S. earned a total of 105

million dollars (Forbes, 2014b). While this amount is alarming, it is not only the

value of compensation packages that has been the target of criticism.

Compensation awarded to top executives has provided opportunities and even

incentives for CEOs and managers to engage in unethical and illegal business

practices. The downfall of energy giant, Enron, and the collapse of numerous

financial institutions during the global economic crisis, for example, demonstrates

how executives can take advantage of their positions of power to engage in

fraudulent activities to increase personal wealth.

Outrage over excessively high compensation packages also extends to the

academic community. Some professors have even suggested that “the way

CEOs are compensated is at the heart of the financial catastrophe that has wiped

out trillions of dollars in assets and millions of jobs” (Rosenbush, 2010). As top

executives continue to earn a disproportionate share of the wealth and the

integrity of business leaders is questioned, activist movements such as “Occupy

Wall Street” and various employee organized protests have emerged throughout

the world. Corporate corruption and the public response will have an impact on

every aspect of society. Even Warren Buffett, who has earned billions of dollars

through legitimate investing activities, has openly criticized the outrageous and

unjustifiable bonuses and stock options paid out to top executives. Without

appropriate solutions and a “strong system of moral behavior and integrity”

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(Sexty, 2011 p. 41), compensation packages will continue to disrupt the economy

and threaten the legitimacy of a capitalist society.

Technology

Technological developments represent another challenge for leaders in the

“modern renaissance.” The most significant developments have been in the area

of communication, where cell phones and Internet connections have “made it

possible to disseminate new ideas more quickly and cheaply than ever before”

and to millions of people throughout the world (Meyer & Davis as cited in AMA,

2005 p. 8). Leaders face the challenging task of becoming proficient at using

technology to communicate effectively and efficiently with staff, measure

performance, retain and share knowledge and develop innovative ideas. With

technology companies estimating that eight to nine billion devices are currently

connected to the Internet throughout the world, the bulk of these devices being

computers, phones and tablets, business leaders will also have to connect with

customers in very different ways (Evans, January 2014).

Demography

A change in the demographic composition of many developed nations

represents another characteristic of the 21st century and an important challenge

for leaders. Never before in history have older adults represented such a

significant percentage of the population, with so much disposable income,

political influence and social impact. Leaders not only have to consider the aging

population when developing and promoting products and services, but also have

to explore the impact of this demographic shift on the workforce. Losing well-

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educated, experienced workers to retirement will force many leaders to develop

innovative solutions or struggle with a loss of knowledge.

Social and environmental responsibility

The knowledge era can also be characterized by a growing concern and

respect for the social welfare of people all over the planet, the ecological world

and environment. Concerns about overpopulation and climate change have

raised questions about pollution, global warming, ecological sustainability and the

loss of biodiversity (Oreskes, 2004). There is overwhelming public support and

political pressure for successful leaders and their companies to give back to

society, to model socially and environmentally responsible behaviors.

Organizational leaders who ignore social and environmental issues are unlikely

to be successful.

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Chapter Three: Renaissance Leadership Theory

Academics and members of the business world have been attempting to

understand and explain successful leadership for decades. Theoretical

developments in this area of study are of critical importance. A comprehensive

theoretical framework allows researchers to organize available data, synthesize

and explain competing views and establish an agenda for future research.

Unfortunately, few attempts have been made to understand leadership within the

context of the Renaissance Leadership model.

Within a highly competitive and complex global economy, where “knowledge

is the key economic resource,” and rapid change is the norm, an innovative new

leadership model has emerged (Murgatroyd & Simpson, 2010 p. 13). Developed

by a diverse team of academics and researchers called the Innovation

Expedition, the Renaissance Leadership Model suggests that leader’s who

exhibit an intense focus on learning, demonstrate a particular style of

collaborative and innovative leadership to improve organizational performance

and who genuinely care about making their communities a better place have the

capacity to harness the creative energy needed to ensure organizational

prosperity and a better quality of life for all of us (Murgatroyd & Simpson, 2010 p.

4-5).

Six Practices of Renaissance Leadership

While traditional leadership theories rarely extend beyond an explanation of

what constitutes great leadership, the Renaissance model was intended to “spark

improvements in individual and organizational performance” (Murgatroyd &

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Simpson, 2010 p. 108). Examining successful organizations and individuals’ who

personify the modern day renaissance leader, including Warren Buffett and Larry

Ellison, demonstrates the value of such an innovative model. According to

Murgatroyd and Simpson (2010), six key characteristics are needed to “bypass

the current messy economic market conditions,” enhance competitiveness,

improve productivity and leverage innovation. The following section will examine

these conditions for Renaissance leadership.

Practice personal mastery

According to Murgatroyd and Simpson (2010), the first condition for

effective, renaissance leadership is personal mastery. Leaders who exemplify

personal mastery have high integrity and self-awareness, push themselves to do

better and develop their capacity to innovate and inspire others (Murgatroyd and

Simpson, 2010 p. 38). These leaders typically have “well-developed listening

skills,” a “positive regard for others,” and “make work important and enjoyable

while maintaining high standards for performance” (Murgatroyd & Simpson, 2010

p. 98). While Renaissance Leaders are always striving to improve on their

leadership abilities, Murgatroyd (April 6, 2013) points out that “these individuals

do not use their organizations as a way to discover themselves.” These leaders

are self-confident but recognize their own strengths and weakness. Renaissance

leaders understand how their actions make a valuable contribution to their

organization and to the world. Renaissance leaders are acutely aware of the fact

that leadership is not an individual activity. As a result, “seek help from others to

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maintain personal mastery” as well as organizational success (Murgatroyd &

Simpson, 2010 p. 48).

Applying a “Glocal” mind set

Another condition for renaissance leadership, according to Murgatroyd and

Simpson (2010) is the ability of leaders to understand the global context within

which their organization operates and to take the most appropriate local actions

(p. 49). Renaissance leaders have a “keen sense of history” and a

comprehensive “understanding of the changes taking place on a global scale”

(Athabasca University, 2013, Critical Issue 6: Week 7). Story and Barbuto Jr.

(2011) suggest “leaders with a global mindset, possessing high levels of cultural

intelligence and high levels of global business orientation are optimally equipped

to lead both the business and people in global settings” (p. 380). Having a

“glocal” mind set involves “scanning the world for competitors, potential partners

and new ideas” and being innovative as an organization and community

(Murgatroyd & Simpson, 2010 p. 51).

Accelerating cross-boundary learning

Murgatroyd and Simpson (2010) suggest that renaissance leaders also have

a keen interest in learning about many areas of life, guiding others to learn new

things, encouraging creativity and nurturing innovation to improve performance

(Athabasca University, 2013, Critical Issue 6: Week 7). They recognize the

importance of knowledgeable employees and their connection to innovation and

performance. Cross-boundary learning extends beyond providing opportunities

20

for continued education to include the successful application or implementation of

that learning through innovation (Athabasca University, 2013, Critical Issue 6:

Week 7). Renaissance leaders actually create a learning culture within the

workplace in order to achieve a competitive advantage.

Thinking back from the future

For a renaissance leader, part of innovation is exploring possible futures,

looking for risks and opportunities, and planning ways to create that future in the

context of challenging global conditions (Murgatroyd & Simpson, 2010 p. 60).

For some leaders, this will involve the use of “scenario planning” and for others, it

will involve more “strategic foresight” to see a future and work backward to find

the most successful path (Murgatroyd & Simpson, 2010 p. 66). One of the main

distinguishing features of the Renaissance Leadership model, this idea of

“rethinking the future” means that leaders do not simply face uncertainty and

adapt, but actually imagine and create their own future.

Leading systemic change

Renaissance leaders recognize the need for constant change and

adaptability within the complex, global environment. These leaders manage

change “through collaboration and teamwork” both within the organizations and

the communities within which they operate. Teamwork and strategic alliances

are critical to success for Renaissance leaders and the organizations they guide.

Murgatroyd and Simpson (2010) suggest collaboration is the “DNA of high

performance organizations” (p. 75). They provide opportunities for learning,

innovation and ultimately greater productivity.

21

Driving performance with a passion

The renaissance model is also about results; working to improve individual

and organizational performance and making positive contributions to the

community (Murgatroyd & Simpson, 2010 p. 76). While interest in leadership

theories focusing specifically on the individual traits of leaders has waned since

the 1960s, academics and business leaders continue to link the personality of

leaders to organizational effectiveness. In fact, Hogan & Benson (2009) argue

that calm, confident, creative and knowledgeable individuals represent the most

competent leaders in this challenging time. Modern Renaissance leaders “set

the tone” for organizational success by demonstrating their passion for making

the world a better place, learning, innovation and working collaboratively with

others” (Murgatroyd & Simpson, 2010 p. 77). The personality and behaviours of

remarkable leaders continues to have an important role in explaining success

and preparing future leaders.

Renaissance Organizations

If the 21st century represents a complex time of transition, a period of modern

Renaissance characterized by “deep, lasting meaningful change” (Murgatroyd,

2012), then both leaders and organizations will need to adapt and innovate in

order to be successful. It will not be enough to have great leadership,

organizations will need to anticipate and create change in order to thrive in this

complex global environment. Murgatroyd and Simpson (2010) argue that

renaissance organizations are knowledge based organizations. These

companies are committed to employee satisfaction because they recognize the

22

success of their companies is dependent on the knowledge and abilities of their

employees. Renaissance organizations also effectively manage different forms

of capital including; intellectual, structural, agility, collaborative, inspirational and

performance capital (Murgatroyd & Simpson, 2010 p. 21). Renaissance

organizations understand that the current century represents a period of

significant changes, however, they “are able to leverage these changes to their

advantage (Murgatroyd & Simpson, 2010 p.22). Finally, Renaissance

organizations are leaders in their field, helping to shape our world (Murgatroyd &

Simpson, 2010 p. 101).

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Chapter Four: Personal Profiles

While progress in the 21st century has been “a thousand times greater than

the 20th century and created many challenges,” there is also opportunity for new,

innovative leaders to emerge (Murgatroyd, 2012). As Murgatroyd (2012)

explains, “this is a time when, with inspired leadership and courageous action,

individuals, organizations and communities can show a way to the future.” Do

Warren Buffett and Larry Ellison represent such leaders? Are they guiding their

organizations, other business leaders and communities toward a new future? A

brief examination of their leadership and the companies they oversee

demonstrates their resilience and global impact as well as why these leaders

have been selected for this study.

Warren Buffett

Described as an investment “prophet,” “the world’s most successful investor”

and a “modern American hero” (Loomis, 2012, p. 93; Lowe, 2007 p. 2), business

leaders around the globe have been following and attempting to replicate Warren

Buffet’s investment strategies for decades. Warren Buffet was born in Omaha,

Nebraska in 1930 (Smith, 2010). The son of a Republican Congressman and

stockbroker, Buffett began purchasing stocks at the age of 11 (Rigby, 2011). He

attended prestigious universities and made his living investing in the stock

market and in “well-managed but unfashionable businesses” (Rigby, 2011 p. 25).

In 1962, Buffet purchased a troubled Massachusetts-based textile company,

Berkshire Hathaway, and began redirecting resources into other areas, including

insurance. Some of Berkshire’s major investments have included the

24

Washington Post, ABC, AIG Insurance, GEICO, Wells Fargo, General Electric,

Coca-Cola, Gillette, Benjamin Moore, BSNF Railways, Heinz, and Goldman

Sachs, to name just a few (Forbes, 2014a; Hagstrom, 2005; Schroeder, 2009;

Loomis, 2012). In the last 48 years, Berkshire’s book value has grown at an

average annual rate of 23 percent, from 19 dollars a share to 172,210 dollars a

share (Buffett and Clark, 2002, Yahoo, 2013). In January 2014, Berkshire

Hathaway had a market value of 252.8 billion dollars (Forbes, 2014a).

As CEO of Berkshire Hathaway, Buffett manages over 288,500 employees

around the globe and has “over 88 CEOs of different companies reporting

directly to him” (Buffet & Clark, 2009 p. xiii; Forbes, 2014a). “In modern

business, no man has managed a more highly talented group of managers, in so

many diverse businesses, and delivered such spectacular results” the way

Warren Buffett has (Buffet & Clarke, 2009 p. xiii). Buffett has been described as

a “humble man” who recognizes the value of surrounding himself with smart,

talented and enthusiastic people (Loomis, 2012). It has been reported that

Buffett “carefully selects all of his partners” (Miles, 2004 p. 9).

Buffett not only recognizes the value of surrounding himself with

knowledgeable employees, but has also proven to be an excellent

communicator. In 1970, Buffett began writing his now-famous letters to

shareholders, which describe Berkshire operations as well as Buffett’s business

philosophies and views on the economy (Rigby, 2011). Over 30,000 people

attend Berkshire’s AGM just to hear the legendary founder’s speech. In recent

years, Buffett has garnered global attention for his philanthropy, agreeing to

25

gradually donate 85 percent of his Berkshire stock to five foundations (Loomis,

2012). Just when everyone thinks they understand Mr. Buffett and his

investment decisions, he “does things no one would have predicted, and does

them well,” consistently “looking for new approaches” (Hagstrom, 2005 p.xxi).

While countless books have been written on Buffett’s investment activities, few

attempts have been made to explain his leadership style using leadership theory.

Larry Ellison

If Warren Buffett represents the “humble” leader who lives a modest life in

small-town America, Larry Ellison appears to be the exact opposite. An

extremely “intense” and “driven” man with a high energy level, Ellison forged his

own path to success and appears to have accumulated the billionaire status in a

very different way than Buffett. Born in New York City in 1944, Larry Ellison was

an independent and rebellious boy who often clashed with those in authority

(Southwick, 2003). In 1966, Ellison quit university at the age of 22 to pursue an

interest in computer programming and design (Wilson, 2002 p. 33). During the

1970s, Ellison briefly worked for Amdahl Corporation and Ampex Corporation

before creating his own company, Software Development Laboratories

(Symonds, 2004). Inspired by an article written by IBM researcher Ted Codd,

Ellison created a relational database system he named “Oracle” (Wilson, 1998 p.

53). A database for business and government information management, the

product was the first of its kind and an instant success. In 1982 the company

was officially renamed Oracle Systems Corporation after its flagship product.

26

Only seven years after developing Oracle, the company was earning billions

of dollars. Ellison set out to increase Oracle’s market share through a series of

strategic acquisitions (Academy of Achievement, 2010). Beginning in late 2004

with its acquisition of PeopleSoft, Oracle initiated an acquisition campaign that

has brought over forty companies into the Oracle fold (Jannise, August 3, 2010).

Even after spending over $45 billion on acquisitions in the last ten years, Oracle

continues to be profitable with a net income of over $10 billion in 2013 (Oracle

Corporation Financials, 2013). Oracle is now “the world’s largest business

software company” (Academy of Achievement, 2010). As of January, 2014,

Oracle had a market value of over 172 billion dollars (Forbes, 2014a).

In his role as CEO of Oracle, Ellison manages 122,458 employees located

throughout the world (Oracle Corporation Financials, 2013). Like Buffett, Ellison

has recognized the importance of selecting the right people to work within his

organization, arguing that as CEO his primary function is to “make Oracle

successful, to make it a good and interesting place to work because we don’t

want people to leave” (Academy of Achievement, May 22, 1997). Unlike Buffett,

however, one of Ellison’s primary goals is to defeat the competition. “Modeling

himself after the samurai warrior,” Ellison reportedly “attacks the competition and

pushes employees to the limit” (Buchanan, June 2013 p. 70). Ellison also differs

from Buffett in how he has accumulated his wealth. While Buffett’s annual salary

has remained stable in the last thirty years at $100,000 U.S., Ellison’s annual

salary for 2013 was $77 million (CNN, November, 1, 2013). Ellison earned over

$70 million in Performance-Adjusted Compensation alone, making him one of the

27

highest paid CEO’s in the world (Ferracone, December, 2013). Ellison has

accumulated incredible wealth, making the Forbes 500 list as the third richest

man in the United States and the fifth richest man in the world with a net worth of

over 41 billion dollars (Forbes, 2014a). A self-motivated and determined leader,

Ellison has been described as “an arrogant promoter” and a “visionary.” But can

we describe Larry Ellison as a modern Renaissance leader?

The fact that Buffett and Ellison have achieved these accomplishments,

becoming hugely successful business leaders in the midst of unprecedented

global challenges, might best be explained with the use of the concepts and

principals of the Renaissance Leadership Model. If Berkshire Hathaway and

Oracle represent Renaissance organizations guided by Renaissance leaders,

they will provide important examples for all business leaders.

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Chapter Five: Methodology

Research Design and Data Collection

Using qualitative methodology, the research design of this project involved a

content analysis of various secondary data sources. Content analysis involves “a

detailed and systematic examination of the contents of a particular body of

material for the purpose of identifying patterns, themes or biases” (Leedy &

Ormrod, 2005 p. 142). This methodology is particularly useful for researching

individuals that are inaccessible. Ethics approval was not required for this

project. The secondary data sources used included a sample of academic

journal articles, biographical books, newspaper and magazine articles, Internet

articles and videos, documented interviews with former employees, re-printed

letters to stakeholders and company reports. Various secondary sources were

used to explore the leadership styles of Warren Buffet and Larry Ellison as well

as the characteristics of the primary companies they oversee, Berkshire

Hathaway and Oracle. Data was accessed through the Athabasca University

Periodical Database, the University of Manitoba Libraries Database, book stores

and Internet searches on ERIC and Google Scholar.

Data Analysis

The data was analyzed to search for themes. The characteristics and

qualities examined reflected a search for concepts and themes related to the six

practices of Renaissance Leadership developed by Murgatroyd and Simpson

(2010). An analysis of available data on the primary organizations these leaders

guide, Berkshire Hathaway and Oracle, was based on a search for the key

29

elements of a renaissance organization, as identified by Murgatroyd and

Simpson (2010) and discussed in the literature review above. While analyzing

the data, memos, notes and diagrams were used to obtain visual representations

of concepts and whether or not they could be explained with the Renaissance

Leadership theory. The memos and diagrams took several forms, such as code

notes, theoretical notes, logic diagrams and flow charts. These procedures all

contributed to a more comprehensive understanding of the topic under

investigation (Lofland & Lofland, 1995).

There are limitations associated with every methodology. Acknowledging

those limitations provides an opportunity to address them and minimize their

impact on the results. One weakness of the case study method is fact that the

secondary data being used may be incomplete or missing important information.

“Building an analysis on a single clue is a common mistake” (Schultz as cited in

Kovary, 2011 p.764). Certain accomplishments or failures may be overvalued.

Researchers focus on a few, recorded events to explain an individual’s behavior,

in general. This is a common criticism, particularly when using biographical data.

To address this limitation, Kovary (2011) argues it is important to draw on an

“abundance of different sources including: letters; videos; interviews;

biographies, first-person documents; and, third person reports” (p. 766). As

such, a variety of sources were used for this project.

A “negative case analysis” was also conducted to actively search for “cases

that contradict the research question” (Leedy & Ormrod, 2005 p. 100). According

to Schultz (as cited in Kovary, 2011), “data collected from different sources could

30

contain several contradictions” (p. 762). To explain these contradictions, Elms

(2007) recommends relying more heavily on primary data, where individual’s

have an opportunity to explain their own behavior and motivation. Identifying

themes and negative case examples helped answer the three research

questions, provided insight into the relevance of Renaissance Leadership theory

as well as identified practical strategies for leadership development and

organizational success.

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Chapter Six: Results

The purpose of this project was to explore the leadership practices of Warren

Buffett and Larry Ellison to determine how these leaders are adapting to and

thriving under the most challenging conditions of our century. This project was

also intended to address the lack of research on the Renaissance Leadership

theory by examining the leadership of Warren Buffett and Larry Ellison within the

context of this new explanatory framework. This chapter is organized to present

a summary of how these leaders are meeting the key challenges of the 21st

century. After an examination of whether or not the leadership styles and

behaviors of Buffett and Ellison exemplify the six practices of Renaissance

Leadership, this chapter will conclude with a brief discussion of Berkshire

Hathaway and Oracle to determine if these companies represent Renaissance

Organizations.

Thriving Under Challenges of the 21st Century

Since the global debt crisis of 2007, the American Bankruptcy Institute

indicates that over 240,000 businesses in the United States have filed for

bankruptcy (American Bankruptcy Institute, 2014). The situation is even more

disturbing in some European countries. In Italy, for example, reports indicate that

over 1,000 businesses in that country fall into bankruptcy every day (Evans-

Pritchard, March 13, 2013). In the midst of a highly competitive global economy,

where organizations are clearly fighting for their survival, it makes the

accomplishments of Warren Buffett and Larry Ellison all the more impressive.

These corporate superstars are clearly operating high performance organizations

32

that are capable of withstanding and thriving in conditions that have decimated

other organizations. What is less clear is how these leaders have anticipated

and adapted to the significant challenges facing today’s leaders. The following

section will describe how Buffett and Ellison have responded to the dominant

patterns shaping this period of modern renaissance.

Warren Buffet

Taking an optimistic approach to the challenges currently confronting

mankind, Warren Buffett believes uncertainty and change is actually the norm

and that “all time is uncertain” (Buffett, March 1, 2013 p. 5). He argues that “in

the 20th century the United States endured two world wars and other traumatic

and expensive military conflicts; the Depression; a dozen or so recessions and

financial panics; oil shocks; a flu epidemic; and the resignation of a disgraced

president yet the Dow rose from 66 to 11,497” (Buffett, October, 16 2008). In his

most recent letter to shareholders, Buffett (March 1, 2013) suggests: “of course

the immediate future is uncertain; America has faced the unknown since 1776.

Opportunities abound in America” (p. 5). In his own unique way, Buffett

highlights that there will always be periods of uncertainty and there will always be

opportunity. It is with this open-minded approach, a characteristic of

Renaissance leaders, that Buffett has faced modern day challenges.

Globalization

Warren Buffett’s behaviour, his investment decisions as well as the

companies purchased through Berkshire Hathaway clearly demonstrate his

understanding of globalization, it’s importance in the world of business as well as

33

the opportunities that can be found within the “global playing field” (Murgatroyd &

Simpson, 2010 p. 16). His personal philosophy toward globalization is extremely

positive. He believes that businesses around the globe will prosper, have greater

advantages entering into new countries and that “as world trade expands it will

mean a better life for people all around the world (Buffett as cited in Andrews,

2012 p. 103). Buffett is acutely aware of global business developments, always

watching the news or reading to learn about the world around him. Buffett

estimates that he spends 80 percent of his working day reading (Parrish,

September 6, 2013).

Buffett’s knowledge of global business developments has helped him invest

in and purchase companies with a global presence including Coca-Cola and

Gillett. International sales of Coca-Cola products accounts for 69 percent of the

company’s net sales and 80 percent of its profits and Gillett has two-thirds of its

earnings coming from abroad (Loomis, 2012 p. 137). These companies have a

significant global presence and employ thousands world-wide. In more recent

years, Buffett has shown an interest in ownership of foreign companies. Buffett

bought his first non-American company in 2007, an Israeli manufacturer of metal

cutting tools (Melby, March 7, 2012). In 2008, Buffett invested in Petro-China

Company Limited and BYD, a manufacturer of hybrid automobiles and

rechargeable batteries (Lowe, 2007 p. 155). However, interest in global

businesses has also brought new challenges for Buffett. A lack of political

transparency in India, for example, is reportedly the reason behind Warren

Buffett’s recent sale of an insurance business based in this country (Business

34

Today, July 18, 2013; The Economic Times, July 24, 2013). Despite the

challenges associated with globalization, Buffett’s desire to learn about, become

involved in and create change within the global economy are all behaviours

characteristic of a Renaissance leader.


Warren Buffett would be the first to admit he is completely dependent on a

highly educated and experienced workforce. Buffett recognizes that in order to

have a competitive advantage he has to invest in and purchase “outstanding

companies managed by smart people” (Buffett as cited in Hagstrom, 2005 p.

160). As Buffett (Feburary, 2003) explains, “to be a winner, work with winners.”

Buffett attracts and retains knowledgeable managers by “rewarding talent” and

allowing managers to “demonstrate their talents” by not “getting in their way”

(Andrews, 2012 p. 93; Schroeder, 2009 p. 472). Managers at Berkshire describe

Buffett as “hands-off but accessible” (Linder, 2012 p. 43). Buffett is able to

“harness the creative energy” of his employees to achieve outstanding

organizational performance in a manner consistent with Renaissance leadership

(Murgatroyd & Simpson, 2010 p. 30).

Competition

Competition in the current global economy is fierce but Warren Buffett

doesn’t seem to mind. He utilizes a number of different strategies to ensure his

company, Berkshire Hathaway, maintains its competitive advantage. His first

strategy is to invest in and purchase companies that have “some sort of

competitive advantage” within their respective industries (Schroeder, 2009 p.

35

288). Buffett only buys into companies with a strong brand, “customer goodwill”

and those that are difficult to replicate (Andrews, 2012 p. 54). Another strategy

Buffett relies on is the purchase of companies that are predictable and low risk.

He describes these companies as “immortal businesses” (Schroeder, 2009 p.

300). See’s Candy, for example, is described as a low risk venture because

Buffett believes there will always be a demand for candy. Another strategy

Buffett has used to outperform the competition has been differentiation through

the innovative creation of the holding company, Berkshire Hathaway. This

company would be virtually impossible to replicate, with diversified investments

and ownership in countless businesses. Finally, Buffett’s innovative and ever-

changing investment strategies have given him an overwhelming advantage in

the cut-throat financial industry. Typical of a Renaissance leader, Buffett is open

to change, highly aware of the world around him, adapts quickly and is not at all

deterred by the new competitive threats that have emerged.

Volatile Economy

Operating within the financial industry, a volatile economy is arguably the

most significant challenge for Warren Buffett. Surprisingly, however, this

investment superstar views an unstable economy as another opportunity. As

Buffett explains, “cash combined with courage in a crisis is priceless” (Buffett as

cited in Schroeder, 2009 p. 592). For Buffett, the financial crisis that hit in 2007

created “opportunities to do things that didn’t exist a year or two earlier (Buffett

as cited in Andrews, 2012 p. 107). Buffett actually revelled in the hard times that

36

terrified most, something that certainly qualifies him for effective Renaissance

leadership.

While he is keenly aware of the problems associated with an unstable

economy, he has developed strategies to mitigate risk. One such strategy is his

“margin of safety” style of investing, where stocks or companies are purchased

well below the underlying business value (Hagstrom, 2005 p. 25). This strategy

protects Buffett from the downside of price risk so that when the financial crisis

hit, Buffett’s company had relatively fewer losses and was able to recover more

quickly. The financial crisis also provided Buffett with an opportunity to lead the

American Government and businesses around the world toward a new future

through his advice and ethical business practices. For example, Buffett was one

of the first business leaders to call stock options an expense, demand more

accurate business accounting and lobby against large compensation packages

for executives. According to Murgatroyd and Simpson (2010), this type of

problem solving and his ability to be a role model to other leaders is

characteristic of Renaissance leadership (p. 31).

Public mistrust

In the midst of a volatile global economy, where enormous compensation

packages and unprecedented financial losses have contributed to public outrage

and mistrust, Warren Buffett has stood out as an example of how business

should be conducted in an ethical and responsible manner. He has served as a

teacher and role model to his employees, shareholders, business leaders and

consumers around the world. His words and actions have helped ease public

37

fear and mistrust and set new standards for business regulation and ethics. In a

2010 memo to Berkshire Hathaway managers, Buffett demonstrates how he sets

the tone for ethical conduct within his company:

“We can afford to lose money- even a lot of money. But we can’t afford to lose reputation-even a shred of reputation. We must continue to measure every act against not only what is legal but also what we would be happy to have written about on the front page of a national newspaper by an unfriendly but intelligent reporter” (Buffett as cited in Linder, 2012 p. xviii).

In requiring his employees to be ethical and transparent, his company has stood

out like a shining star in the wake of the Enron scandal, Freddie Mac meltdown

and the embarrassing Goldman Sachs compensation packages. His words of

wisdom have made it into business schools across the globe, where students

learn about ethics and the importance of the “front page” test.

Warren Buffett’s honesty and transparent reporting to Berkshire Hathaway

shareholders represents another effort to garner public trust. Berkshire

Hathaway reports highlight losses and problems while at the same time

educating shareholders on investment decisions. In treating shareholders like

business owners, Buffett had a “vision rarely shared by other companies”

(Schroeder, 2009 p. 120). Attention to customer loyalty has also helped diminish

public mistrust and create stability. Buffett has often said that “it takes a lifetime

to build a reputation and only five minutes to destroy it” because he recognizes

the value of his customers, his employees and public perception (Andrews, 2012;

Miles, 2004 p. 198). Long-term success and the creation of a high performance

company require public trust. Consistent with the characteristics of a

Renaissance leader, Buffett has asked investors, businesses and governments

38

to “rethink their approaches and their understanding of how the world now

functions” to create a more stable and ethical business world (Murgatroyd &

Simpson, 2010 p. 27).

Technology

For the most part, Warren Buffett has conceded that major technological

developments in the 21st century, more specifically in the area of computer

technology, have been outside his “circle of competence.” According to Buffett

(as cited in Linder, 2012), “risk comes from not knowing what you’re doing” (p.

36). In his letter to investment partners in 1967, Buffett explains “we will not go

into business where technology, which is over my head, is crucial to the

investment decision” (Schroeder, 2009 p. 258). While Buffett was widely

criticized for failing to invest in computer technology prior to the technology crash

of 2000, he relied on his knowledge of historical developments in the auto

industry and how trends have shown new and emerging technologies rarely

make good long-term investments to defend his position. Buffett readily admits

that he will never master the latest technology but addresses this limitation by

surrounding himself with smart people. Buffett (as cited in Bhan, April 20, 2011)

explains, “I don’t have to be smart at everything; I didn’t deliver my wife’s baby. I

believe in using people who are smarter than I am.” Recognizing one’s strengths

and weaknesses as well as having a solid understanding of historical

developments are both characteristics required for Renaissance leadership.

39

Demography

Not surprisingly, Warren Buffett has found opportunity in the demographic

changes confronting North America in the 21st century. While the older

population is expected to double in size between 2005 and 2050 (Murgatroyd,

2012 p. 24), Buffett sees the benefits of an aging population. For Buffett, older

adults represent a valuable resource, bringing with them years of knowledge and

experience. One only has to look at the average age of the 12 board members

at Berkshire Hathaway to see that Buffett truly believes in the value of older

employees The average age of Berkshire board members is 70 and six board

members are over the age of 80 (Linder, 2012 p. xxii). Buffett has been known to

convince past CEO’s to come out of retirement to lead Berkshire Hathaway

companies and clearly recognizes the importance of retaining experienced talent.

One employee, Rose Blumkin, continued to manage Buffett’s Nebraska Furniture

Mart until she retired at the age of 104 because she was passionate, motivated

to work and was a great saleswoman (Hagstrom, 2005 p. 43). “Buffett simply

does not regard age as having any bearing on how able a manager is” (Loomis,

2012 p. 72). At the same time, Buffett highlights “the importance of bringing in

young people with fresh ideas” to stay ahead of the competition (Schroeder,

2009 p. 524). An aging population can be another opportunity for Renaissance

leaders to seize in a “global war for talent” (Murgatroyd & Simpson, 2010 p. 7).


Long before the term “social responsibility” became a catch phrase in the

business world, Warren Buffett was trying to make positive investment decisions

40

that did not profit from harm to people or the environment. In his 1967 letter to

partners, Buffett (as cited in Schroeder, 2009) wrote: “we will not seek out activity

in investment operations, even if offering splendid profit expectations, where

major human problems appear to have a substantial chance of happening” (p.

258). In 1968, Buffett made it his personal mission to sponsor a Jewish man for

membership in the Omaha Club as a way to challenge traditional, racist rules of

the time (Schroeder, 2009 p. 269). He developed an innovative charitable

program where Berkshire Hathaway employees could decide which charity they

would like to support and the company would invest two dollars a share on their

behalf. Over $197 million was donated to various charities through this program

(Schroeder, 2009). In 2012, Buffett garnered world-wide attention when he

donated the bulk of his wealth, two billion dollars in Berkshire Hathaway shares,

to the Bill and Melinda Gates Foundation for global health and education

initiatives (Alden, July 8, 2013).

Buffett has demonstrated he is equally concerned with environmental issues.

In a television interview, Buffett stated, “if you’re really seriously hurting the

environment to create 20,000 jobs, you can have those 20,000 people start

building me a tomb” (Buffett, September 22, 2010). His decision to make a

difference in the world stems from his business integrity and his concept of “claim

cheques.” Buffett believes that his wealth is a “claim cheque that must be turned

in at some point or given back to society in a way that has the most impact to

change the lives of people all over the world” (Buffett, 2009). Planning for the

41

future as well as the desire to help make the world a better place are both goals

Renaissance leaders actively pursue (Murgatroyd & Simpson, 2010 p. 31).

Larry Ellison

In his pursuit of success and wealth, Larry Ellison has also demonstrated an

amazing ability to thrive under the challenging conditions of the 21st century. The

findings of this study reveal that Ellison and Buffett have both helped their

companies achieve a competitive advantage in their respective industry but in

very different ways. Like Buffett, Ellison has been innovative in his approach to

managing and creating change.

Globalization

Larry Ellison has both benefitted from and actively created the global world

we are living in today. With the expansion of his company, Oracle, into new

markets Ellison became an eager participant in the global business world.

Expanding overseas in the late 1980s, Oracle has employees in over 25

countries (Wilson, 2002 p. 190). With the development of his E-Business

software, however, Ellison began to actually influence and shape the way

businesses operate on a global scale. Oracle’s E-Business software uses the

Internet to centralize a business’s data from across the globe (Symonds, 2004 p.

42). Businesses that were once fragmented, with different IT, marketing,

financial and sales departments in different countries were standardized and

unified with a single global database. More recent product developments at

Oracle, including the private database Cloud, enable customers to support and

store very large files and filing systems with easy access to this information from

42

almost anywhere in the world (Oracle, 2014). Ellison’s vision and the creation of

these innovative products have helped create a truly global business world.

According to Murgatroyd and Simpson (2010), Ellison’s global activities are

consistent with Renaissance leaders who have vision and create a new world.


Like Warren Buffett, Larry Ellison surrounds himself with the “best people.”

Ellison hires “brilliant engineers” and “programming wizards” to bring his

technological ideas to life (Wilson, 2002 p. 47). To recruit this select and highly

knowledgeable workforce, Ellison hand picks students from Cal Tech, MIT and

Stanford where “the very best experienced programming talent” are trained

(Symonds, 2004 p. 69). To attract the best, Ellison believes in rewarding

employees well with bonuses and stock options. In fact, virtually all of the early

employees at Oracle became millionaires because of these types of

compensation packages. For Ellison, “brains conquer all” (Wilson, 2002 p. 178).

His competitive advantage within the technology industry is having the brightest

people produce the most innovative products in a timely manner. Like a true

Renaissance leader, Ellison recognizes that “information and knowledge” are the

“most important currency in the world” (Murgatroyd & Simpson, 2010 p. 29).

Competition

Few would argue that technology represents one of the most competitive

industries on the planet in the 21st century. Within this type of cut-throat

environment, “a failure to market first means a loss of billions (Wilson, 2002 p.

68). Ellison is both a product of and contributor to this intensely competitive

43

industry. Obsessed with “killing the competition,” Ellison has an

“uncompromising commitment to winning” at all cost (Symonds, 2004 p. 307). In

fact, Ellison has adopted the philosophy of infamous warlord, Genghis Khan,

believing that “it is not sufficient that I success; everyone else must fail”

(Southwick, 2003). Oracle’s CEO uses a variety of strategies to overthrow the

competition and guide his high performance company. “Ellison constantly

monitors every shift in his competitors business tactics or product strategies,

ensuring that Oracle could rapidly exploit any emerging weakness or block off

any new threat” (Symonds, 2004 p. 285). His most common approach is to be a

“first mover” in the technology industry. With his development of the relational

database, E-Business software and Oracle Cloud, Ellison ensured that he beat

the competition to market and earned a greater market share.

Ellison also relies heavily on product differentiation as a competitive strategy

by creating truly innovative products and services that have transformed the way

businesses operate throughout the world. Unfortunately, some of these

strategies Ellison has used have been questionable, unethical and, at times,

illegal. For example, Ellison once hired a private investigator to root throughout

Microsoft’s garbage to uncover damaging secrets (Yarow, May 28, 2011).

Ellison’s company knowingly shipped blank disks to meet product deadlines and

was ordered to pay the American Government a $200 million fine in 2011 for

overcharging the US Government (First Biz, October 7, 2011). This type of

unethical behaviour is not characteristic of a Renaissance leader who exhibits

high levels of integrity (Murgatroyd & Simpson, 2010 p. 31).

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Volatile economy

Larry Ellison has faced the challenges brought about by an unstable and

unpredictable global economy by creating innovative products that help address

a gap or a need in the business world. For example, the relational database

products Oracle developed created a way for businesses to store and retrieve

valuable information. Ellison provided a product that was not available at that

time and met a need. His vision and the creation of innovative technology

allowed him to weather difficult economic conditions. Following the terrorist

attacks on the United States in 2011, Ellison’s company was able to assist

governments in upgrading information technology (IT) systems for easier access

to information across law enforcement agencies (Symonds, 2004). While other

companies struggled during difficult economic conditions, Ellison created and

met the IT needs of governments and business around the world. This type of

vision and innovation are key elements of Renaissance leadership. Sadly,

Ellison also contributed to the economic instability in the United States by

focusing on growth and profit at any cost.

Public mistrust

In his early years as leader of Oracle Corporation, Ellison clearly contributed

to and helped create public mistrust for businesses and technology companies in

particularly. Former employees, customers, business leaders and media have all

claimed that Ellison was “willing to say or do anything to get business” (Wilson,

2002 p. 77). His business activities and publically made comments have all

contributed to public mistrust in what they perceive to be as selfish, overpaid

45

CEO’s. Ellison has been accused of: making exaggerated product claims;

“peddling vapour-ware” by promoting products yet to be developed; firing

employees just weeks before their stock options came due; utilizing “creative

marketing” designed to confuse customers; and, a failure to provide adequate

service for Oracle customers (Southwick, 2003; Wilson, 2002). Ellison has had

to pay fines to the government for overcharging, has paid $22 million in damages

for alleged stock-trading abuses and has been at the centre of one legal

controversy after another since he created Oracle (Ferrell et al., 2013 p. 64).

Combine these activities with outrageous spending habits and almost

incompressible compensation earnings and it’s easy to see why Ellison continues

to work against a negative reputation.

Some industry analysts and academics have suggested that Ellison is simply

a product of highly competitive and unethical technology industry (Mendelson,

November 10, 2010). Other leaders in this field, including Steve Jobs of Apple

and Bill Gates of Microsoft, have also been criticized for running their

organizations with an iron fist and “attempting to snuf out the competition” by any

means (Pfeffer, 2010). While Ellison has attempted to “re-invent himself” in

recent years, focusing more attention on customer service and the promotion of

superior products, his bad reputation, legal difficulties and negative media reports

have left a lasting legacy of public mistrust. Since Renaissance leadership

demands role models of high integrity who do not “descend into self-absorption,”

Larry Ellison clearly falls short in this area (Murgatroyd, April 6, 2013).

46

Technology

While most business leaders struggle to keep up with the latest

technologies, it is in this area that Ellison excels and most closely resembles a

Renaissance leader. Through his innovative vision of future technological

developments Ellison acts as an architect, shaping the technical world for the

rest of us to eagerly follow. His products have inspired companies throughout

the world to completely restructure their businesses practices in order to become

more technologically advanced, more efficient and readily adaptable to change.

There is little doubt that Ellison’s contribution to technology is “shaping the future”

(Symonds, 2004 p. 148). He understands what technology can do and its

implications before anyone else. Former partner and Oracle employee, Ed Oats

has said Ellison “understands what technology means for the product

development, the company and the world” (Wilson, 2002 p. 45). A visionary able

to create opportunity and a new future in technology, Ellison certainly resembles

a Renaissance leader in this area.

Demography

For Ellison, the demographic challenges facing the 21st century pose

problems and opportunities. Recognizing that health care needs will change in

the future as the population ages, Ellison has donated generously to research on

ageing related diseases (Symonds, 2004 p. 385). At the same time, Ellison

values the knowledge and experience of older adults. In fact, world-renown boat

designer, Jon Bannenberg, was a man in his late 70s whom Ellison considered to

be a brilliant collaborator and role model (Symonds, 2004 p. 375). Like Buffett,

47

Ellison has also focused attention on younger people and the role they play in

our society, donating computers to different schools throughout the United

States. Characteristic of a Renaissance leader, Ellison realizes that the age of

an individual is less significant than the knowledge and experience they have to

offer.


Ellison has been widely criticized for donating relatively little money, less than

one percent of his total wealth, to charity (Smith, 2010 p. 50). In defence of his

charitable donations, Ellison has argued that he does not wish to donate money

just to appear altruistic (Wilson, 2002). In recent years, Ellison has taken more of

an interest in social and environmental issues. He has funded an Israeli drug

company that conducts trails on cancer drugs, funded biotechnology as well as

medical research (Symonds, 2004 p. 384). In 2013, Ellison even purchased the

Hawaiian Island, Lanai, which he hopes to transform into a “laboratory of

sustainability,” through desalinated seawater irrigating organic farms and a solar

energy grid used to recharge the batteries of electric cars (Honolulu, August,

2013). All of these activities and investments are consistent with Renaissance

leadership practices and the desire to solve complex social and environmental

problems (Murgatroyd, 2013). However, only time will tell if Ellison can

overcome his bad reputation that continues to overshadow these positive

endeavours.

Buffett and Ellison clearly have the ability to navigate through the chaotic

conditions of an ever changing world, but do they have what it takes to be

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Renaissance leaders, visionaries who are worthy to help forge a path toward our

future? According to Murgatroyd and Simpson (2010), there are a number of

important factors that shape effective leadership but six key characteristics stand

out as necessary conditions for Renaissance leadership. The next section will

examine how Warren Buffett has met all of these conditions while the leadership

activities of Larry Ellison remain a work in progress.

Renaissance Leadership Practices: Warren Buffett

Personal mastery

According to Murgatroyd & Simpson (2010), Renaissance leaders have high

integrity and self-awareness, pushing themselves to do better and inspiring

others (p. 38). Warren Buffett is certainly a leader with a positive self-concept

who strives to set a good example, to be “transparent” and “accountable” in his

business and personal life (Schroeder, 2009 p. 674). Berkshire Hathaway

managers have described Buffett as “a genuine and principled person” and a

“mentor” (Chan, 2010 p. 14). For Warren Buffett, honesty and integrity means

everything. Buffett theorizes that all people have either an inner or outer

scorecard, meaning “we are true to ourselves or we conform to what we think the

world wishes us to be” (Buffett & Clark, 2009 p. 31). Buffett has spent his life

going against the grain, using innovative investment strategies that others could

not understand and would often criticize. He was able to make these decisions

and become an effective leader because he is someone with an “internal locus of

control,” guided by strong ethical principles (Buffett & Clark, 2009 p. 33). His

partner, Charles Munger (as cited in Schroeder, 2009) explains, Buffett “was

49

always competitive, but he was never just rawly competitive with no ethics” (p.

706). As a result, Buffett has become a model of corporate nobility, guiding his

business with integrity, humility and humour in a manner that is inspiring.

Renaissance leaders are not only individuals with high integrity, but they also

know themselves, their strengths and weaknesses as well as their capacity to

innovate and make a difference in the world around them (Murgatroyd &

Simpson, 2010 p. 48). One of Buffett’s mentor’s, Philip Fisher, once said of

Warren Buffett:

“He always knows exactly who he is and what he’s about. That is the prime part of Warren Buffett you should emulate. Know who you are” (Hagstrom, 2005 p. xxii).

Buffett’s business decisions have always been informed by his “circle of

competence” or his field of knowledge. To address areas of weakness, like

public speaking, or topics that fall outside of his circle of competence, Buffett has

taken courses or turned to his business mentors for advice in order to improve

his performance. His closest confident and partner, Charles Munger, for

example, taught Warren Buffett to move away from short-term investing and

purchase companies with intrinsic value. Consistent with the characteristics of a

Renaissance leader, Buffett actively seeks help from others to maintain personal

mastery (Murgatroyd & Simpson, 2010 p. 48).

Renaissance leaders are also very “mindful of the impact their leadership

has on those around them” and, as such, all of their actions are very purposeful

(Murgatroyd, April 6, 2013). Those closest to Buffett have said “he has never

said anything spontaneous and always seems to have an answer prepared for

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any question that could be anticipated” (Schroeder, 2009 p. 698). He very

deliberately assumes the role of mentor with the leaders at Berkshire Hathaway,

allowing competent managers to run “their” businesses as they see fit (Buffett &

Clark, 2009 p. 23). Buffett sees his role within Berkshire Hathaway as being able

to identify and purchase companies run by highly competent and passionate

people. He recognizes that this knowledgeable workforce is his greatest asset

and resource. He diligently prepares for every Berkshire shareholder meeting

where his role is teacher and mentor to thousands of eager investors.

Commitment to a life of integrity and self-fulfillment as well as his desire for

continuous learning through friendships and mentors has helped create this

modern Renaissance leader.

Applying a “Glocal” mindset

Another necessary condition for Renaissance leadership is a holistic

understanding of how the world works and the ability to apply this knowledge

locally (Murgatroyd & Simpson, 2010). At the individual level, this involves

having an in-depth understanding of historical developments as well as global

trends. At the organizational level, it means continuously scanning “the world for

competitors, potential partners and new ideas” (Murgatroyd & Simpson, 2010 p.

51). Warren Buffett certainly has a keen sense of history, researching

investments decisions made throughout the 20th century as well as key

developments in various industries. When he began investing, he spent

considerable time tracing the history of the stock market to learn about past

trends and inform his current investment practices (Schroeder, 2009 p. 134).

51

Always in search of new business opportunities, Buffett continuously

monitors global developments in his search for investment and ownership deals.

While many of the companies owned by Berkshire Hathaway have a global

presence, one of Buffett’s key indicators of success is whether or not these

businesses “will work on main street” (Miles, 2004 p. 104). Berkshire’s

ownership of a furniture business, jewellery store, candy business, soft drink

company and razor blade manufacturer are all indicators of the type of

businesses Buffett likes to invest in and how these products have wide appeal at

the global and local levels. Buffett’s name has become so well known that

companies now come to him, wanting to be a part of the Berkshire Hathaway

brand. A true Renaissance leader, his understanding of global trends has

allowed him to seize opportunity.


Murgatroyd and Simpson (2010) suggest that Renaissance leaders are

“intensely curious” and show a strong desire to learn about all aspects of society.

Within the new knowledge based economy, Renaissance leaders have to provide

meaning and create innovative ways to drive high performance companies

(Murgatroyd, 2013). Warren Buffett has been referred to by friends and family as

a “non-stop learning machine” (Schroeder, 2009 p. 260). Buffett reads

everything from the biographies of people he admires to the history of the auto

industry. He has even critically examined investment decisions made prior to the

Great Depression. Buffett analyzed and combined the investment approaches of

his mentors, Ben Graham, Philip Fisher, John Williams and Charles Munger, to

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create his own unique and hugely successful approach to investing. Graham

taught Buffett about the “margin of safety” rule. From Fisher, Buffett learned the

importance of investing in quality companies with superior management.

Williams exposed Buffett to the concept of “intrinsic value” and Munger guided

Buffett in the direction of long-term investing (Hagstrom, 2005 p. 23). Munger

also helped Buffett “learn how different areas of knowledge, including science,

history, philosophy, and mathematics, held important concepts that should be

applied to all endeavours including investment decisions” (Hagstrom, 2005 p.

23). No one had ever before combined these investment concepts and theories.

Learning from different professors, investors and even business leaders in

different industries has allowed Buffett to create a unique and innovative

investment strategy in a manner that is characteristic of a Renaissance leader.

Cross-boundary learning is also about the dissemination of knowledge

throughout an organization and beyond. Murgatroyd and Simpson (2010)

recognize the importance of Renaissance leaders who can capture the essence

of meaning and clearly communicate this information in a “simple, impactful way”

(p. 59). Buffett has clearly excelled in this area. Buffett has taught university

classes on investing, written editorials and magazine articles, appeared on

television for interviews, testified in lawsuits, participated in government advisory

groups and has become a mentor to other CEOs in an attempt to share his

knowledge of investing. His letters to Berkshire Hathaway shareholders

represents another attempt to share his knowledge. Buffett regularly describes

problems as “instructive” and uses his international fame to improve our

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understanding of business and the global economy. When asked what legacy he

would like to leave behind, Buffett (as cited in The Buffett, 2014) has said,

“If what I’ve done with Berkshire Hathaway – running a unique and independent company in true pursuit of shareholder value-persists and people learn from it to improve the way they invest and run their companies, that would be a fine legacy” (The Buffett, 2014).


Another practice of Renaissance leadership is the ability for leaders to

imagine or explore possible futures and work backwards to create the innovative

future they envision (Murgatroyd & Simpson, 2010 p. 60). Renaissance leaders

have the ability to inject a “future’s perspective into present challenges”

(Murgatroyd, June 2010). At an individual level, Buffett imagined becoming a

millionaire by the age of 35 when he was only 11 years old and developed a plan

to achieve that goal (Schroeder, 2009 p. 61). He understood the concept of

“compounding money” and “thought about time in a different way” (Schroeder,

2009 p. 61). As a long-term investor, Warren Buffett “lives in the future,” always

trying to anticipate the growth potential of investments and the companies he

purchases (Schroeder, 2009 p. 192). Even when calculating the current value of

a business, Buffett examines the estimated total earnings likely to occur over the

life of that business and then “discounts that total backward to today” (Hagstrom,

2005 p. 123). For Buffett, value is always calculated by predicting the future,

estimating future earnings and the external factors that may influence those

earnings.

Buffett frequently imagines alternative futures, an ability Renaissance

leader’s share, in order to measure the risk associated with any investment

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decision. His decision to avoid investing in computer technology, for example,

was based on his assessment that with so many new entrants into the field it

would be difficult to determine which companies would have longevity, just as the

auto industry had lost so many manufacturers decades earlier. A true

Renaissance leader, Buffett is able to make important connections between the

past and present to achieve a greater understanding of the future (Murgatroyd,

June 2010).


Renaissance leaders are actively involved in leading change, often through

innovation (Murgatroyd & Simpson, 2010 p. 69). To drive large-scale change,

within their organizations, communities and throughout the world, Renaissance

leaders collaborate extensively (Murgatroyd, June 2010). Warren Buffett’s ability

to collaborate with mentors, friends, other business leaders and board members

is the very foundation of his success. He attributes his success to “associating

with people of integrity and skill” (Schroeder, 2009 p. xxi). Using the tools he

acquired from his mentors, as discussed earlier, Buffett was able to develop his

own innovative investment strategies. However, Buffett’s collaboration extends

beyond his own industry. In the 1970s, Buffett formed a friendship with Fortune

magazine writer Carol Loomis, who has helped him write his Berkshire letters to

shareholders ever since (Loomis, 2012). Buffett has formed an important

philanthropic partnership with friend and role model, Bill Gates of Microsoft. In

last forty years, Buffett has developed a network of “genuine relationships” that

have helped him achieve unprecedented success in the financial industry

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(Schroeder, 2009 p. 10). Collaboration and strategic partnerships across

industries makes change possible and is a necessary condition for Renaissance

leadership.


Renaissance leaders are passionate about their work, are “relentless in their

commitment to performance” and are dedicated to making a “substantive and

substantial difference” in the world (Murgatroyd, June 2010). Their passion is

inspiring to others. Warren Buffett became one of the wealthiest people in the

world and the most successful value investor because he is passionate about

what he does. In describing his obsession for perfection, his disciplined

approach and his passion for the work, Buffett has said, “intensity is the price of

excellence” (Schroeder, 1990 p. 523). According to Buffett (as cited Andrews,

2012) “without passion, you don’t have energy and without energy, you have

nothing”. His passion for his work and Berkshire Hathaway is so obvious one

observer wrote, “it is as if he and Berkshire were as one” (Schroeder, 2009 p.

413). While Buffett was initially driven by the desire to make money, his passion

for doing what he loves has become more important. Buffett (as cited in Lowe,

2007) has said “I enjoy the process far more than the proceeds” (p. 87).

Intrinsically motivated, Buffett insists, “if we were not paid at all, Charlie and I

would be delighted with the cushy jobs we hold” (Buffett as cited in O’Loughlin,

2003 p. 62).

Symbolic of Renaissance leadership, Buffett’s passion “sets the tone for

organizational performance” at Berkshire (Murgatroyd & Simpson, 2010 p. 76).

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Buffett only goes into business with people who share his drive and passion for

success. He purchases companies whose owners are “strong-willed and ethical

entrepreneurs” who “act like business owners” rather than managers (Arnold,

2012 p. 42). One of the Berkshire managers and CEO of R.C. Willey Home

Furnishings, Bill Child, has said Buffett “has a way of motivating you. He trusts

you so much that you just want to perform” (O’Loughlin, 2003 p. 60).

“For the leader’s of Berkshire, passion is a driver for success” (Chan, 2010 p.

159). The ethical and supportive organizational culture of Berkshire as well as

the phenomenal success this company has enjoyed for decades is indicative of a

passionate, Renaissance leader driving a high performance organization.

Renaissance Leadership Practices: Larry Ellison

Personal mastery

Examining the personality traits of Larry Ellison, there is little doubt he can be

an effective and strategic leader. Ellison has been described as an “incredibly

intelligent” and charismatic man (Wilson, 2002 p. 39). He represents an inspiring

visionary who is an excellent communicator and “masterful at motivating people”

to create truly innovative technology. While these characteristics are certainly

necessary elements of effective leadership, for Renaissance leadership they are

not enough. Renaissance leader’s exhibit personal mastery; “they have high

integrity and view self-awareness as a prerequisite for leadership” (Murgatroyd &

Simpson, 2010 p. 41). Ellison’s behaviour as CEO of Oracle has been described

as “reckless,” “unpredictable,” “calculating,” “cruel,” “amoral,” and “deceptive”

(Southwick, 2003; Symonds, 2004). Even former employees attempting to

57

defend Ellison and the idea that he has lied suggest he “embellishes stories” and

is a “myth of his own making” (Wilson, 2002 p. 5). While story telling can be an

effective tool for Renaissance leaders, used to inspire and motivate followers,

Ellison has told so many stories he has lost the trust of many employees,

industry analysts and customers. Not at all characteristic of a Renaissance

leader, Ellison does not seem to understand or care about the impact his

outrageous behaviour has on others or the organization (Murgatroyd & Simpson,

2010 p. 47).

From his unfulfilled product promises to the “cruel” treatment of employees,

Ellison is not a Renaissance leader of high integrity. His self-confidence and

charisma have impaired his leadership performance. Murgatroyd & Simpson

(2010) highlight a number of leadership “derailers” that can interfere with

Renaissance leadership. When self-confidence becomes arrogance a leader’s

actions can actually hurt a company, the way Ellison’s bad reputation has

impacted Oracle. When charisma turns into “melodrama,” people become

distracted from the company’s performance and focus on the leader, in this case

Ellison’s public comments, competitiveness and outrageous spending habits.

According to Murgatroyd (April 6, 2013), Renaissance leaders “know

themselves and don’t spend a lot of their time in an organization using an

organization to discover themselves.” Unfortunately, this is exactly what Larry

Ellison has done. He has dismissed mistakes made at Oracle Corporation by

saying, “I didn’t know what I was doing,” or “I wasn’t experienced” (Wilson, p.

140). Ellison is the first to admit that he “had no idea how an organization

58

worked (Symonds, 2004 p. 63). For years, Ellison has been “in a process of self-

discovery “(Academy of Achievement, May 22, 1997). More recent reports

suggest that Ellison has made an effort to address areas of weakness,

“becoming a better listener with customers, demanding more ethical conduct

from his sales team, relying on detail-oriented employees to help him focus and

attempting to create a more positive organizational culture at Oracle (Symonds,

2004). However, ongoing legal problems and a bad reputation are difficult to

overcome and continue to prevent Ellison from achieving personal mastery to

become a Renaissance leader.

Applying a “Glocal” mindset

Renaissance leaders have a keen sense of history, understand the global

changes and apply their knowledge to address local challenges and seize

opportunities (Murgatroyd, June 2010). Ellison has certainly demonstrated an in-

depth understanding of the world around him, particularly the world of business.

An expert in technology, Ellison has looked at global business and designed

software to improve productivity within companies of all sizes in all industries.

For example, the E-Business software developed by Oracle has not only

connected businesses to the Internet but has lead to improvements in

efficiencies and greater productivity at the organizational level (Symonds, 2004).

Ellison has taken complex ideas of global business, information access, world-

wide customer service and simplified these processes to fit any business. In this

area, Ellison clearly exemplifies the mindset needed for Renaissance leadership.

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He is able to utilize his knowledge of globalization to address challenges at a

local level.


According to Murgatroyd and Simpson (2010), high performance

Renaissance leaders are also intensely curious about the world around them and

use knowledge they’ve obtained from various sources to improve performance.

Ellison has demonstrated that he is “well versed in many areas including history,

politics, religion and science” (Southwick, 2003; Symonds, 2004). He has been

described as “one of the most agile and insightful minds” (Wilson, 2002 p. 8).

Some of this knowledge has shaped Ellison’s strategic decisions at Oracle. For

example, Ellison reportedly “patterned his competitive style after medieval

samurai warriors to launch a ferocious attack on the software market” (Warshaw,

1995 August). More importantly, Ellison has developed a comprehensive

understanding of how businesses operate in order to develop appropriate

software to standardize these operations. A computer programmer who dropped

out of university, Ellison has shown an amazing aptitude for understanding the

world around him and applying this knowledge to create innovative technology at

Oracle.

Another aspect of cross-boundary learning is the ability of Renaissance

leaders to “guide others in distilling meaning” and applying that knowledge to

nurture innovation and drive improved performance” (Murgatroyd, June 2010 p.

4). While Ellison is certainly a visionary, he has not always provided a “nurturing”

environment for Oracle employees to create innovative products. He has been

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described as a “cruel” and “demanding” boss who pushing employees to meet

unrealistic product deadlines (Wilson, 2002 p. 91). Ellison refers to his early

leadership style at Oracle as “management by ridicule” (Wilson, 2002 p. 133).

Creating ineffective bonus programs within his organization resulted in

competition and tension between departments and meant that the transfer of

knowledge within Oracle was minimal (Symonds, 2004 p. 119). The fact that

Ellison’s leadership was inconsistent did not help ensure adequate knowledge

management. He has gone from being a disconnected, “laissez-faire” leader,

spending months at a time away from Oracle to pursue the American Cup in

yachting, to becoming a micro-manager who is intensely involved and

“obsessed” with “controlling” every aspect of the business (Symonds, 2004 p.

286). The consequence of this new level of involvement may mean that

creativity and innovation at Oracle become stifled. These are not the

characteristics of a Renaissance leader, who acts as a teacher and mentor,

imparting and sharing critical information within their organization.


Larry Ellison has an amazing capacity to look into the future and envision

what businesses would look like and what types of technology they would need

to help drive high performance. Former Oracle executives have claimed “Larry

lives in the future” (Wilson, 2002 p. 222). They suggest Ellison “sees the world

as he wanted it to be rather than as it was” (Wilson, 2002 p. 25). Renaissance

leaders have this ability or gift. They are able to imagine alternative futures and

work backward to make their vision for the future a reality (Murgatroyd &

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Simpson, 2010 p. 62). Setting his own personal goal of becoming a millionaire,

Ellison realized the only way he could become wealthy was to own his own

company. Then he thought about what he would produce and drew on his

experience as a computer programmer. The creation of his relational database,

the first product developed by Oracle, was really one of the final steps in his plan

to become wealthy. Seizing an opportunity to create the first commercial

relational database, Ellison relied on exceptional programmers to bring to fruition

an idea originally proposed by IBM (Symonds, 2004 p. 60). This backward style

of planning for the future provides “a radically different perspective” and is a key

element of Renaissance leadership (Murgatroyd & Simpson, 2010).

As Ellison has worked toward his own, personal vision for the future he has

also created a new reality for the rest of us. Ellison’s technological insights and

the implications of his software products on the business world have shaped the

future. Ellison explains, “leaders are people who do things before they become

fashionable or popular” (Symonds, 2004 p. 393). He is always “imaging a future

very different from the present” (Murgatroyd & Simpson, 2010 p. 63). Ellison

recognized the need for improved data collection and storage and developed

products that created more efficient businesses that operate on a global scale.

In this area, Ellison represents an ideal example of Renaissance leadership.

Once again, however, his unethical methods for helping to create a new business

landscape are cause for concern.

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Renaissance leadership assumes that “collaboration is the very DNA of high

performance companies” (Murgatroyd & Simpson, 2010 p. 75). When Oracle

first entered into the technology industry in 1977, collaboration meant working

with his business partners to produce and market an innovative new product

(Smith, 2010). Today, more than 35 years later, Ellison appears to recognize the

importance of “nurturing connections and collaborations” both within and outside

of his organization. Within Oracle, Ellison has focused more attention on

developing teams to address disconnect between product development and

sales (Symonds, 2004 p. 70). He has also placed greater emphasis on customer

collaboration, initiating meetings and roundtable sessions with potential

customers and CEO’s from different industries (Symonds, 2004 p. 232).

At different times, Oracle has partnered with Apple, British Telecom, nCube,

Java, Salesforce.com, NetSuite, and even its long-time rival, Microsoft in 2013

(Hawes, June 27, 2013). To explain these new relationships, industry analysts

have said, “Oracle’s realization that no one succeeds alone in a very fast-moving,

tough market for enterprise software-as-a-service is leading them to move fast on

these partnerships” (Columbus as cited in Hawes, June 27, 2013). According to

Murgatroyd and Simpson (2010), these types of collaborations and partnerships

are necessary for leading systemic change and driving high performance

organizations.

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Despite what many people may think of Larry Ellison, there is no doubt he is

a passionate leader, obsessed with the growth and success of Oracle

Corporation. Employees and industry analysts have said Ellison is “emotionally

attached” to Oracle and that the company represents a “holy mission” (Wilson,

2002 p. 50). Ellison has certainly set the tone for Oracle in terms of both

creativity and innovation and he has developed “focused strategies to achieve his

goals,” which is characteristic of Renaissance leadership. However,

Renaissance leadership requires leaders have “vision” and “values” (Murgatroyd

& Simpson, 2010 p. 81). His apparent lack of ethical values and questionable

methods for achieving his objectives are not at all consistent with Renaissance

leaders guiding high performance organizations (Murgatroyd & Simpson, 2010).

In the midst of the controversy surrounding this leader, he manages to instil

confidence in his employees, Oracle board members, shareholders and

customers who eagerly anticipate his next innovative product. A former co-

worker, Stuart Feign, describes Ellison’s contagious passion as “an-aura,” a

powerful sense of possibility (Wilson, 2002 p. 40.

For Renaissance leadership, passion must be combined with “substantive

and sustainable” results (Murgatroyd, June 2010). Ellison’s innovative

contributions to the technology industry and the world of business certainly

represent substantive results. He has demonstrated that he can adapt quickly,

recruit excellent people, and take risks with his innovative ideas. What is less

clear is whether or not Ellison’s leadership will create long-term sustainability for

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Oracle. Every risky, unethical and legal battle represents threats to Oracle’s

reputation, diminishes confidence in Ellison and costs the company billions in

lawsuits, legal representation and fines. A complex man and leader, Ellison

certainly has the potential to become a Renaissance leader with greater attention

to values and ethical conduct.

Renaissance Organizations

The Renaissance model is not just about leadership but is also focused on

results; working to improve individual and organizational performance and

making a positive contribution to the community (Murgatroyd & Simpson, 2010 p.

76). If Renaissance leaders are successful, the structure of their organizations,

their treatment of employees, their recognition of customer value will reflect this

style of leadership. “Managing and balancing the dynamic relationship between

a number of different forms of capital will be the key task of leadership in modern

day Renaissance organizations” (Murgatroyd & Simpson, 2010 p. 21). The

following section will present a brief review of Berkshire Hathaway and Oracle

Corporation, the companies owned and operated by Warren Buffett and Larry

Ellison.

Berkshire Hathaway

Described as the most successful investment holding company in the world,

Berkshire Hathaway owns over 100 businesses and purchases publically traded

stocks and bonds to generate profit for investors all over the world (Smith, 2010).

As discussed above, this business has been able to successfully manage

intellectual capital by choosing the best companies operated by the best

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management teams. Buffett has successful retained employees by creating a

positive organizational culture where respect and “praise” are commonplace and

employees are rewarded for excellent performance (Schroeder, 2009 p. 408). In

terms of structural capital, another key characteristic of a Renaissance

organization, Buffett has created an efficiently run business made up of many

companies that will likely continue to operate in the same ethical and highly

productive manner for years to come. Since Buffett has given his managers the

freedom to run their businesses to the best of their ability, speculation and

concern over the future of Berkshire without Buffett appears to be unfounded.

Renaissance organizations are also concerned with the “loyalty” and

relationship with clients and customers” and view this relationship as the primary

source of profitability (Murgatroyd & Simpson, 2010 p. 21). Buffett’s intense

concern about the reputation of Berkshire, his treatment of shareholders like

owners and his dedication to providing products and services that appeal to

global consumers has virtually guaranteed his success in this area. In terms of

Berkshire’s “agility capital,” or its ability to quickly respond, Buffett has

demonstrated that for an investment company to be successful it has to be quick

to seize opportunities (Schroeder, 2009). He has created an organization based

on collaboration and a shared value of ethical business behaviour that can stand

up to scrutiny or the “front page” test. Ensuring that his company maintains

inspirational and performance capital, Buffett hires the best managers and

invests in the most competitive and successful companies in the world

(Schroeder, 2009). An inspirational, Renaissance organization, Berkshire

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Hathaway has demonstrated that it understands the importance of knowledge as

a key economic resource and the need to create a positive work environment to

retain that knowledge.

Oracle Corporation

As the second largest computer software company in the world, with annual

profits of $10.9 billion (CNN Money, February 1, 2014), Oracle Corporation is

clearly a high performance organization. Murgatroyd & Simpson (2010) have

argued that the “commitment of people within the organization” and “employee

satisfaction” represent the “best predictor of success” (p. 21). Unfortunately, in

his efforts “to create an atmosphere of the very highest expectations” (Wilson,

2002 p. 105), Ellison did not ensure employee satisfaction. As a former

employee explains, “there was a lot of intimidation, a lot of uncomfortable

intimidation” (Wilson, 2002 p. 105). Another former employee said “you didn’t

dare turn your back at Oracle for fear someone would stab it” (Symonds, 2004 p.

133). The result was a “poor organizational culture” at Oracle and high staff

turnover (Symonds, 2004). At different times, Ellison has “systematically purged

Oracle’s senior ranks of much of their talent” (Southwick, 2003 p. 5). Ellison

obviously recognizes the importance of intellectual capital, hiring the best

engineers to develop innovative new technology, but retaining this specialized

and highly knowledgeable workforce with more than money and stock options

would be an important change. The values of growth, profit and winning have

taken precedence over ethical business conduct. At a time when a knowledge-

based organization is critical for success, and a key characteristic of

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Renaissance organizations, Oracle has the challenge of trying to turn around its

organizational culture and retain exceptional talent.

More recent developments at Oracle have focused on creating a more

efficient organizational structure, eliminating duplicated departments in overseas

operations and demanding the sales team meet more rigid standards (Symonds,

2004). His rapid development of innovative software products to become a first-

mover in this industry demonstrates his ability to manage agility capital. In the

area of customer capital, however, Oracle has a challenging road ahead and

does not yet meet the requirements of a Renaissance Organization. Customer

complaints concerning Oracle’s products and the lack of customer service have

been significant and continue to overshadow recent efforts to address these

issues. Teamwork and collaboration have become important at Oracle to

address some of the inter-departmental conflicts that once plagued the company.

However, it is difficult to know if this collaboration has helped focus the different

departments to follow the same vision, a necessary condition for Renaissance

organizations.

Finally, Oracle Corporation is very much concerned with inspirational capital

and performance capita. The problem is the manner in which these forms of

capital are managed. Ellison has often created unrealistic deadlines for his

employees, made public announcements concerning product design and pricing

before speaking to his engineers and sales team which has made it difficult for

Oracle to meet his ever-changing performance demands (Symonds, 2004).

While Oracle is a successful company developing innovative products that are

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changing the world, it has not demonstrated that it is able to effectively manage

the different forms of capital in a manner consistent with a modern day

Renaissance organization.

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Chapter Seven: Analysis

Summary of Findings The findings of this research project confirm that Warren Buffett and Larry

Ellison are both exceptional and innovative leaders who have viewed the

challenges of the 21st century as opportunities. At this time, however, only

Warren Buffett can be considered a Renaissance leader within the theoretical

framework developed by Murgatroyd and Simpson (2010). Warren Buffett was

found to be an ethical and inspirational investor who recognizes the value of a

knowledgeable workforce and passionately strives to create a better future for his

business and citizens of the world. He is has a unique approach to imagining

and creating a new future in the business world through his investment activities

and in the area of philanthropy, an approach consistent with the way

Renaissance leaders “think back from the future.” Buffett’s company, Berkshire

Hathaway, was found to be a Renaissance organization, able to successful

balance the different forms of capital needed to survive the challenges

associated with a knowledge-based economy.

Larry Ellison, on the other hand, has yet to follow all six of the practices

needed to achieve Renaissance leadership. A passionate visionary who has

clearly changed the technology industry and the world of business, Ellison’s

unethical business practices, win at any cost attitude and self-serving values are

not characteristic of Renaissance leadership. As Murgatroyd (June 2010)

explains, “leadership is first and foremost a mind-set and is more about serving

others than authority and power” (p. 3). If Ellison were to address the problems

70

that have “derailed” his leadership, set the tone for ethical conduct in his

organization and the technology industry and implement creative initiatives to

demonstrate a sense of social responsibility, as he has proposed to do with the

purchase of a Hawaiian island, he has the potential to become a truly

inspirational Renaissance leader.

Limitations The most obvious limitation of the research project is the fact that only

secondary data was used. As discussed earlier in this paper, every attempt was

made to address this limitation by actively searching for contradictions and

“negative cases” but these strategies do not guarantee, without a doubt, that

important information is not missed. Ideally, a triangulation of methods would be

used to address this limitation. Had this researcher personally interviewed

Warren Buffett, Larry Ellison and their associates a more complete

understanding of these leaders would be possible. With that said, every

opportunity was made to use a variety of first-hand accounts, where these

leaders describe their experiences in their own words.

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Chapter Eight: Recommendations

The results of this project have a number of important implications. In the

following section, recommendations for theoretical development in this area as

well as practical suggestions for leaders will be presented.

Theoretical Implications

This paper has clearly demonstrated the important contribution the

Renaissance Leadership theory has made to the study of leadership as well as

the practical application of this model for guiding leaders through unsettling,

turbulent times. Renaissance Leadership not only addresses gaps in previous

theoretical developments, it also integrates a number of important elements of

previous theories including leadership traits, behaviors and transformational

activities. Murgatroyd (2013) has suggested that the importance of followers is

an “implicit” seventh practice of the Renaissance Leadership model but it may be

useful to explain the importance of followers in more detail. The 21st century

brings with it significant challenges, as this paper has shown, but great

leadership can only take us so far. Will followers influence Renaissance leaders

in a type of feedback loop, as past leadership theories have suggested? For

example, the public demand for ethical business practices has not only been

shaped by Warren Buffett but has likely fuelled him to take the issue further,

lobbying congress, pushing for more regulations in the financial industry. Will

followers begin to look like collaborators with social media connecting us to

leaders in a whole new way? These are issues that certainly could be explained

with the Renaissance leadership model.

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Practical Implications

After decades of research and countless theoretical developments

attempting to explain successful leadership, there is little doubt that great

leadership is a complex process involving personal traits, behaviours, situational

factors, and a vision for the future. The analysis of Buffett and Ellison presented

in this paper has demonstrated the importance of the Renaissance leadership

model, not only as a theoretical explanation for successful leadership but as a

practical model of behaviour that any leader can strive to follow. This study

provides a number of practical, managerial recommendations for leaders in the

21st century.

The first recommendation is that leaders recognize the value of hiring the

best, most knowledgeable people in their field. Buffett and Ellison both

understand the importance of surrounding yourself with smart people who can

help a company seize opportunities, innovate and meet the challenges of a

modern Renaissance.

The second practical recommendation from this study is that leaders must

always remember the importance of customer loyalty. Business leaders who

ignore their customers, even for a brief time in the history of their company, face

significant obstacles in overcoming a negative reputation. We have learned that

Larry Ellison continues to address public scepticism and mistrust, even as he

produces some of the most innovative technological products in the world.

Most importantly, this study has demonstrated the need for integrity and

ethical business conduct. Ethical conduct not only sets the tone for

73

organizational culture, behaviour and performance but extends beyond the

company to influence the industry and the world. Some have argued Larry

Ellison is simply a product of a competitive and unethical technology industry.

One industry analyst explains;

“If anything, Ellison is merely a poster boy for what it takes to thrive in an increasingly ruthless environment. His rare combination of hubris and self-awareness enables him to skid recklessly to the edge, stopping just short of the cliff. And his stunning trajectory offers a valuable lesson: in the cutthroat arena of big business, sometimes it pays to be a jerk” (Mendelson, November 10, 2010).

It is difficult to argue with the fact that Ellison’s behaviour has had a positive

outcome in terms of his personal wealth and the growth of Oracle Corporation.

However, what is less clear is the lasting impact of his unethical behaviour within

his industry, the business community and for consumers. Business leaders have

a responsibility to behave ethically. Efforts to legislate ethics should continue but

ethical business mentors are likely to have more success. This study

demonstrates that leaders, like Warren Buffett, who act with integrity and set the

highest standards for ethical conduct can become highly successful,

Renaissance leaders driving high performance companies while, at the same

time, making a positive contribution to the world. Leaders in every industry, in

any business face significant challenges in this modern era. To navigate through

this uncharted territory, the world will need leadership it can trust.

Finally, this study has helped to identify a number of specific characteristics

or behaviours that Buffett and Ellison share and that can be important lessons for

managers in any organization. Both leaders have a vision they pursue with

74

passion. They are dedicated to life-long learning and surround themselves with

equally passionate, smart people who help them develop their understanding of

the world as well as their innovative ideas. Buffett and Ellison both seize

opportunities and respond rapidly to capitalize on these opportunities. These

leaders have changed and adapted over the years, but they haven’t changed

their successful, key strategies. They think about the future in a way that most of

us do not and have found a way to make their dreams a reality by working

backwards from the future. Most importantly, these leaders share an

“unrelenting optimism,” demonstrating that leaders can create a better future for

themselves, their organization and the world around them. Recognizing this fact

should instil all leaders with a sense of hope, knowing that we have the ability to

create the world of our dreams and thrive in times of uncertainty.

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Chapter Nine: Conclusion

For centuries, philosophers and academics have studied the individual traits

and behaviours of great leaders as well as the social and structural conditions

required for successful leadership. Attempts to develop a comprehensive

leadership theory have been closely monitored by the business world, where

great leadership means the difference between organizational success and

failure. The focus of this project was on the leadership styles and behaviours of

Warren Buffett and Larry Ellison because they have come to symbolize great

leadership in our time. Many assume that “the replication of any great

achievement first requires knowledge of how it was done” (Washington Post as

cited in Schroeder, 2009).

This paper explored the challenges facing leaders in the 21st century and the

innovative ways in which Buffett and Ellison have overcome these challenges,

even describing them as opportunities. Both leaders have accumulated

incomprehensible personal wealth and are driving high performance

organizations, but only Buffett had the six key behavioural characteristics of

modern-day Renaissance leadership. While Larry Ellison was shown to be a true

innovator in the technology industry, this research found that his unethical

decisions, treatment of employees and failure to build customer loyalty and trust

have kept him from becoming a Renaissance leader. This study demonstrates

that the Renaissance model not only provides a framework for the skills and

conditions needed for high performance organizations, it also offers practical

tools that leaders can use to meet the challenges of the current global,

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knowledge-based economy in order to obtain a competitive advantage. Any

organization, large or small, can improve productivity and thrive in an ever-

changing, uncertain market when guided by a modern day Renaissance leader.

77

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