Chapter 87 - Fair Thought and Speech: A Group of Letters to an Industrial Organization
Today’s Chapter is based on the book “Fair Thought and Speech: A Group of Letters to an Industrial Organization” by Carl Braun.
Carl F. Braun was the founder of C. F. Braun & Co., a highly successful engineering firm in the early 20th century. Here’s how Munger once described Braun: "…very great businessman named Carl Braun who created the C.F. Braun Engineering Company. It designed and built oil refineries—which is very hard to do. And Braun would get them to come in on time and not blow up and have efficiencies and so forth. This is a major art.”
Here’s what I have learned:
Kindness
"I sincerely believe that treating others with dignity and sharing our goals and problems has helped a group of common people go far beyond our wildest dreams."
— Fred Meijer
Carl Braun strongly advocates for kindness in professional interactions. He explains that a friendly approach is crucial for building better relationships and enhancing collaboration among a company. As he once said, “Whatever other qualities we may possess, the whole fabric of our effort will collapse unless we learn, and learn well, this habit of being friendly.”
And more importantly, Braun emphasizes the importance of being friendly with everyone regardless of their rank or position within the organisation. By fostering a culture of kindness, leaders can create an environment where all employees feel valued and motivated to contribute their best efforts.
"Let's not set ourselves above others. Let's not think or talk about people below us or under us. Let's say with us or around us. Let's not spread information down, but rather out. Let's not hire people, but rather take them on or have them join us. Let's not talk of feeding them, but rather of serving them. Let's not talk of superiors, but of leaders."
— Carl Braun
By promoting an environment where everyone is treated equally, it allows for managers or senior executives to receive valuable insights and opinions from lower rank employees. As Fred Meijer once said, "I get help every day from other people. They help me make better decisions and keep me from making stupid ones."
This reminds me of how Fred Meijer once highlighted the critical role that people and relationships play in the success of any business. In fact, he firmly believed that treating others with dignity and recognising them as an individuals is key to driving organisational success. As he once said, “People don’t want to be managed, they want to be coached.”
Notably, he was known to emphasize on the significance of addressing each of his employees by name. As he once explained, "Addressing each other by name is important. Each of us likes to be recognized as an individual."
"I sincerely believe that treating others with dignity and sharing our goals and problems has helped a group of common people go far beyond our wildest dreams."
— Fred Meijer
Meijer believes that everyone wants to feel important. By fostering an environment where individuals feel valued and appreciated, he has been able to bring out the best in his team members. As he explains, "We really have two jobs as management: to bring out the best in people in order to help them succeed and to satisfy all our customers so they will want to come back and trade with us."
Furthermore, this concept reminds me of the importance of having a meritocracy environment that allows leaders to make better decisions. Ray Dalio once said, “In an idea meritocracy, decision-making power is based on the quality of one's ideas and not on seniority or position.”
One famous promoter of meritocracy is Sam Zell who loved to hear the opinions of his employees to keep his eyes and mind open. He once said, “I’m chairman of everything and the CEO of nothing. I stick to what I’m good at—vision, direction, strategy. That’s where I add the most value. I spend almost my entire day listening to other people. I ask questions, I probe, I raise possibilities.”
As a matter of fact, Zell loved to be challenged by his employees and more than welcomed debates. It was important for him to create a work environment where his employee’s voice can be heard. As a risk taker, Zell explains that his greatest fear is to not have information that could of protected him from making a mistake due to the lack of communication with his staff. As such, he made sure to implement a meritocracy culture in his company to allow all his employees to be part of the decision making process. And a meritocracy is only possible if every employees are treated with kindness no matter their rank in the company.
“At our core, we are a meritocracy—an environment that Bob and I cultivated in the early days. A meritocracy gives you the freedom to be yourself by eliminating superficial markers, so you are measured only by what you produce. In essence, it is an equalizer that focuses everybody on what’s important so you have the opportunity to reveal your best. Once you’ve worked in a true meritocracy, it’s very hard to settle for anything else.”
— Sam Zell
Effective Communication
"Most of the successful people I've known are the ones who do more listening than talking."
— Bernard Baruch
Carl Braun believes that effective communication is crucial among an organisation. As a matter of fact, in his book, he highlights the importance of conveying thoughts clearly and respectfully. As mentioned above, mutual respect in communication is essential, as one would not like to be spoken to in a condescending tone. As he once said, "If we talk to a man as though he were a child, he is sure to resent it."
But more importantly, Braun believes in asking questions when communicating with others. He believes that asking questions allows you to better understand others and to foster an open exchange of ideas, which is essential in a meritocracy.
"One of the quickest ways of getting on a basis of friendly understanding with another man, is via the question-route. By questioning, we get attention—for a man can hardly answer questions without concentrating. By questioning, we become acquainted. And by questioning, we may often lead a man both to solve the problem for himself and to convince himself."
— Carl Braun
Furthermore, by asking questions, Braun mentions that one will avoid from being too pushy or forceful when sharing his or her own thoughts. As he explains, "If we want our opinions or beliefs to be accepted, the worst thing that we can do is to press too hard for them or to make a personal issue of them. Better not crowd for acceptance, but rather invite it." One way of doing this according to Braun is to use softening phrases like “it seems to me” or “perhaps” when expressing your own opinions or beliefs.
This should be a reminder that it is important to always understand both sides of the equation before you can have an opinion on the subject. As Charlie Munger once said, “I never allow myself to have an opinion on anything that I don’t know the other side’s argument better than they do.” In an organisation context, this allows business leaders to have all the information at hand to make a better decision.
On the same line of thought, if we are encouraged to ask questions, we must also be open to be questioned. As Braun mentions, it is important for us to embrace open discussion and questioning in the workplace. As such, we should not feel offended if we are questioned on our actions. Instead, we should see questions and discussion as an opportunity to help individuals and organisations progress.
"After all, if we will only think about it, we will see that a man questions us for one of two reasons. First, he doesn’t understand us perhaps. Much better have him tell us so than to leave us imagining that he does understand. Then, too, men question as a means of helping us—of saving us from error, or of getting us closer to the truth. In either case, we need their questioning."
— Carl Braun
Braun mentions that it is a big mistake to live life without being open to be criticised and questioned. As he explains, "Many men, if their work or methods are discussed, feel at once that they are being attacked. They fly to their own defense with bad, petty, or ill-considered arguments. They try to make the other man’s ideas or questions seem silly. They not only do no good, they make enemies. And they retard progress."
Braun also believes that refusing to talk when being questioned is also not ideal. He says, "Some men when their work is questioned or discussed, refuse to talk. They suffer the supposed injustice in hurt silence. They do themselves no good. But they do hinder the search for truth. They defeat the very purpose of organization— to make full use of everyone’s talents and ideas."
In fact, we should remember that it is only by being questioned that we can change our mind about things. And as Winston Churchill once said, “Those who never change their minds, never change anything.”
“The ability to destroy your ideas rapidly instead of slowly when the occasion is right is one of the most valuable things. You have to work hard on it. Ask yourself what are the arguments on the other side. It’s bad to have an opinion you’re proud of if you can’t state the arguments for the other side better than your opponents. This is a great mental discipline.”
— Charlie Munger
Shared Responsibilities
“Praise publicly. Criticize privately.”
— Warren Buffett
Carl Braun mentions that collective responsibility is extremely important among an organisation. In fact, he suggests that individuals should take ownership of both successes and failures of the company. By promoting a culture where everyone feels accountable, it cultivates a long-term team oriented mindset which is crucial for achieving common goals.
For example, Braun mentions how crucial it is in company to avoid fingerpointing when a mistake or an error happens. It is a lot more efficient to consider it a collective failure and to find ways to solve the issue. As he explains, “when errors or misjudgments have occurred, let’s if possible include ourselves in the responsibility for them. Let’s not inexorably pin them on the other man. For instance, if we must talk about some Company-action that might better have been otherwise, let’s speak of it as our. Our engineering. Our price. Our design. Let’s never point the accusing finger at a fellow-worker by calling it your.”
Braun further explains that errors can only be improved on if companies openly talk about them. Unfortunately, employees tend to not talk about mistakes if they are criticised publicly, which in the long-run hurts the company.
“The recognition of error and its examination, if openly talked of, is a sure way to avoid its being repeated, either by the same man or by others. Everyone errs at one time or another. The Company pays for it. Okay. But the Company should not have to pay twice.”
— Carl Braun
However, Braun believes in praising individuals for success. This is a great way in promoting a culture that puts an importance of supporting and encouraging others in their efforts. As he once said, "Let’s lean over backwards in giving to others the credit for ideas. This is the generous thing."
In my opinion, shared responsibility starts at the top. Only executives, who are willingly taking responsibilities of the employees under him, are able to promote a work culture that encourages this concept of “praising publicly and criticising privately” through example. Previously, we have learned about the five qualities J. Paul Getty believed all good executives should have:
Example is the best means to instruct or inspire others. The man who shows them as well as tells them is the one who gets the most from his surbordinates.
A good executive accepts full responsibility for the actions of the people under him. If called before his superiors because something has gone wrong in his department or office, he accepts full personal blame, for the fault is his for having exercised poor supervision.
The best leader never asks anyone under him to do anything he is unable or unwilling to do himself.
The man in charge must be fair but firm with his subordinates, showing concern for their needs and doing all he can to meet their reasonable requests. He treats his juniors with patience, understanding and respect and backs them to the hilt. On the other hand, he does not pamper them, and always bears in mind that familiarity breeds contempt.
There is one seemingly small-but actually very important-point that all executives should remember. Praise should always be given in public, criticism should always be delivered in private. Employees who have done a good job should be told so in front of their fellows; this raises morale all around. Employees who have done something wrong should be told so in private: otherwise, they will be humiliated and morale will drop.
You will see that a lot of those traits are reiterated in Carl Braun’s “Fair Thought and Speech” and are related to communication skills. As Richard Branson once said, “Communication is the most important skill any leader can possess.”
Beyond the Book
Read "The Work Required to Have an Opinion" by Farnam Street
Read "When Things Go Wrong: The Warren Buffett Way to Handle Problems" by Farnam Street
Read "Carl Braun’s Writing Lessons for Clear Thinking and Productive Communication" by Farnam Street
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