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"We Eat Our own Cooking"!

Written by: Pia Lord

Article Overview: Warren Buffet : Ownership Principle No. 2 “We eat our own cooking!” is an article discussing the importance of integrity, honesty, and careful and consistent work in all business related matters and life as seen across a wide cross section of fields in the world.

"We Eat Our own Cooking"!



As my mother used to say, “You sleep in the bed that you make”! This saying follows in the same vein as Warren Buffett’s phrase “we eat our own cooking”. Phrases like these can become cliques but there is a certain underlying truth to them. So let’s explore for a bit the meaning of this phrase and how it applies to Berkshire Hathaway and building our own businesses.

How you ever made a dinner that you thought was not fit for a king? Or even for a dog? Well if you are like my mother the answer is of course “NO”! She has a way with everything from apple pie to zucchini frittata. Her Quiche Lorraine ranks supreme with those that know of it in Maryland where she has served it at most of her parties over the last 40 years. However, most of us at one time or another, if we haven’t ruined an entire meal have at least done injustice to a dish or a side dish! In order to have the dinner come out right, we either had to cook again and pay closer attention to what created the faux pas or we had to make excuses to our family. Perhaps we even went as far as scrapping it all and going out to dinner that evening! There are some of us that at one time or another probably did not even bother and just went out to dinner to begin with! Well what ever the circumstances and whatever the error involved some how we had to pay for it with money, time, effort or all three.

Mr. Buffett says that he, his board members and family have most of their assets invested in Berkshire Hathaway. This means that when they cause a downturn in the company stock value or price due to some mishap on their part, they too will have to pay in some way, in relation to their percent ownership in the company. Even though he says he is putting a lot of “eggs in one basket”, he is still confident due to the character of the Berkshire Hathaway Holding Company. Berkshire Hathaway owns many companies in many different areas.

“Haste makes waste” and “the early bird catches the worm” are two other phrases my father repeats often that deal with working and daily activity in a timely manner. When we are building a business it is important to work carefully, thoughtfully and in the time frame required for the functioning of the business. We need to set appropriate short, medium and long term goals, have a daily planner with top priority activities, and have the will, desire and determination to get them done. We must know each step of the path to build and build it well. We must not take short cuts. We must be honest in our work, in our ways and in our business and personal relations with others.

A company that I read about recently, was making hamburgers. This company sold a product labeled as “select cuts” when the meat inside was really from trimmings of the source. The resultant law suit due to a serious illness that was contracted by numerous people points out the fact that false advertising (dishonesty) does harm. Selling something as a choice item when it is not can undermine your business from a goodwill as well as an ethical point of view. The goodwill that a business builds up in the long run is crucial to its success. So much so that “goodwill” is even a line item in the annual report of some companies. When a company goes up for sale, the “goodwill” value is a high consideration in determining the selling price. Many investors will pay more for a company that has an outstanding reputation. They will bid higher than just the actual book value of the capital, inventory, machinery, land owned and improvements that comprises the company. For example, a stock value will sometimes reflect that intangible “goodwill”. When investors really like a company or think there is something great going on with it they can sky rocket the stock price. For example, a company like Chicos clothing stores. A few years ago the stock price of Chicos was sky high due to the fact that everyone thought Chicos was selling lots of clothing and shoes. This is a temporary reflection though of the “popularity” of a product or a perceived popularity by the general investing public. Today, my father mentioned to me that Chicos is back down again.

A long term goodwill that I am referring to deals with a company that has built up a solid great reputation for doing what they do really well. Companies that have a high goodwill rating could have it for varying reasons: perhaps their product is very useful and earthfriendly, they have outstanding customer service, or they sell a known reliable product such as Farberware. Goodwill is subjective to a certain extent as implies the phrase “beauty is in the eye of the beholder”. When we go to the museum and see a great work of art, we all see something different. Depending upon your tastes and aesthetic sense, you may value one work more highly than another. Just as some people may prefer Puccini to Wagner, both composers have great followings among music lovers. The testament to Wagner’s greatness for some lies in the continuation of his opera performances at Bayreuth Opera House in Germany. Puccini operas generally are beloved the world over for their glorious sounds, finely crafted plots and exquisite arias and choral music.

Every company, as it is building up their reputation, experiments with what will work for them and what does not. But in this process it is important to be terribly honest and produce a great product that will last. Even in religion, honesty, clarity of purpose and solid creates the foundation. In the Christian religion we see that “ the church is built upon the one foundation, the rock of Jesus Christ”. Jesus embodied principles of life for good solid living. In the Jewish, Buddhist or Islam religions we see that there is also one God towards whom the followers harken to build their lives in the best way. They too have laws to live by, customs to follow and works to do daily in building their lives.

In science, the scientific method is there so that when someone makes a science experiment, they follow a certain prescribed method. Most people are familiar with this as a standard acceptable way of operating. The truth in the method usually brings out the truth in the experiment. This truth may not be what we want but we will know it when we see it. It is important to not obscure the truth once it comes to the fore. Rather try to build upon the truth in a way that works best for all people.

“We eat our own cooking” is a phrase to remember when building your business. If you like the taste of your creations then there is a good chance that others will too and you will have success. Good Luck in your endeavors and your life.

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Article Tags: apple pie, assets, berkshire hathaway, board members, cliques, company stock, downturn, eggs in one basket, holding company, injustice, mishap, money time, mr buffett, phrases, quiche lorraine, rsquo, side dish, stock value, time effort, warren buffett
Referred by: http://jaykubassek.com



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"You've got to bounce back and just keep going. They're all great lessons to learn." Words of Wisdom "I think we both subconsciously were willing to start in a really meager setting, just because it was an opportunity not to work for a man." Penniless But Passionate "We had come home [from France] with the intent to open a restaurant together, and we didn't have a penny to our names. I was 23 years old. I had not been to college. I had no idea how to launch a business. None. Susan had a degree in economics and had been to chef's school. She's five years older than me. But she also didn't have any idea how to launch a business." Cook What You Know "First of all, you just copy things. But then, it starts to be a very personal cuisine, which is what we basically used those three-and-half years at City Cafe for-to create our own personal style of food. And it was so well-received. It started out as country French food, and it kept expanding all the time." 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A Thankless Job Has Its Rewards "When the Food Network came asking for us to come and promote our second book, and they noticed we were funny and how we finished each other's sentences, they said, 'You girls should have a TV show.' The reason we should have had a TV show was that we did all of this really thankless teaching before that, and I'm not even sure it brought bodies into the restaurant. A lot of people might have looked at it as a waste of time. But I think you never know what skill you're going to develop, [and our teaching gave us the skills we needed to do the Food Network show.]" Be a Great Boss "We learn a lot from our colleagues, and from other companies that we want to be like. We're always looking for innovative ways to really make our workplace so phenomenally attractive that we can't lose good people, and we can attract the best. Those are big goals for us all the time." My Most Rewarding Business Moments... 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