Charlie Munger, the longtime vice chairman of Berkshire Hathaway, who died on Tuesday at the age of 99, will be exalted for many things in the coming days — his business acumen, his aphorisms on both investing and life, his constant presence as Warren Buffett’s sidekick and right-hand man as they built Berkshire into a hugely successful and powerful conglomerate.
But that last one is not quite right. He was more than a No 2; he was the ultimate second banana. These are far from the same thing.
Let me explain. In 1991, the great John Huey wrote an article for my former employer, Fortune Magazine, called “Secrets of Great Second Bananas.” I joined the magazine long after the article was published, but it was required reading for young reporters and writers. In it, Huey lays out what it means to be one of the “Great Second Bananas of US Business”: “strong-willed, independent operating executives who passed up the glories of the top job — each has turned down other offers to be CEO somewhere else — and instead pursued the hands-on running of some of the best-performing, most challenging big companies around.”
When it comes down to it, second bananas are a CEO’s equal partner rather than a lackey. They don’t want — or are at least willing to cede — the spotlight and have no real aspirations for the top job. Barring some sort of disaster, Munger was never going to have that title at Berkshire. For one thing, he was seven years older than Buffett, who had made it clear he never planned to retire. “I will keep working until about five years after I die,” he joked, “and I’ve given the directors a Ouija board so they can keep in touch.”
Until I reread Huey’s piece last night, I had forgotten that in it, Buffett sounds off on the importance of having a second banana. At the time, his two biggest holdings (Coca-Cola and Capital Cities/ABC) had second bananas, and of course he also had one in Munger: “I guess a significant number of CEOs don’t want the No 2 guy to be very close because it’s no fun being on top if nobody’s on the bottom. Because the CEO dispenses all favors, his biggest problem is to avoid being treated like God. Second is to avoid thinking he is God.” That was an area where Munger excelled. He kept Buffett grounded. “Charlie says everything I do is dumb,” Buffett once said. “If he says it’s really dumb, I know it is, but if he just says it’s dumb, I take that as an affirmative vote.”
Clearly, Munger wasn’t a yes man, but he also wasn’t rival or a threat. Instead, the two were often productive counterweights in ideology and management. Munger was a Republican; Buffett is a Democrat. Munger was the pessimist; Buffett is the perpetual optimist. Munger was the quality guy, Buffett the value guy. Where Munger could be more direct and biting, Buffett tends to be more tactful. These differences were not points of argument or disagreement but rather areas of discussion and debate during their daily phone calls. It was an arrangement that required that they both keep their egos in check.
Munger’s passing also seems to signal that the era of the second banana might regrettably be closing, too. In today’s ultra-polarized world, it’s hard to think of a partnership where two people with such opposing points of view could consider their differences an asset. Instead, leaders often look to surround themselves with people who think and behave just as they do. Rather than share power, the celebrated path to the top seems to be consolidating it. Contemporary CEOs don’t want to worry about looking over their shoulders, but something’s lost when there’s no one left to tell the emperor that he’s not wearing any clothes.
So along with all the lessons in life and leadership Munger left the business world, let’s add this one: If you truly want to succeed, go find yourself a second banana. - Bloomberg Opinion
