Charlie Munger is Warren Buffett’s right-hand man. And one of the richest men in the world. As vice chairman of Berkshire Hathaway, Munger has a net worth of $2.4 billion (according to Forbes).
Most people recognize Warren Buffett’s name, but few know his very talented partner. Does that minimize Charlie Munger’s wealth or success? Absolutely not.
It may sometimes seem like I’m always pushing you in the direction of becoming No. 1 – of having your own business and being your own boss. And I won’t deny that I spend a lot of time talking about the advantages of entrepreneurship and equity. But some people are better off as No. 2.
In my career, I’ve been both. There’ve been times when I’ve been the unknown No. 2 in a business someone else started. I’ve also been No. 1 in businesses I started myself. But whenever I’ve been the head honcho, I’ve installed a CEO as fast as I could. That’s because I firmly believe that almost any business will do better if it is run by two people.
One person should have the majority of power. But he needs a partner (or sometimes two partners) he can rely on to do things that he can’t do as top dog. He needs a partner to balance out his personality, to excel in the areas where he is weak. If you can provide these skills to the person who owns the business you work for, you can make an extremely good career for yourself as No. 2.
Now I’m not talking about being an assistant. I’m talking about being a full-fledged partner – someone with almost as much power and influence as the No. 1 guy, but with slightly less equity in the business. In fact, being No. 2 can be a fantastic deal for chicken entrepreneurs and ambitious career execs who want the benefits of being the head of a business without having to invest as much time or money as No. 1.
Your goal is probably to be the one on top. If so, that’s fine – because what we are helping you do with ETR will put you there. But realize that it’s possible to have more success, make more money, achieve more, and more fully enjoy your life’s work in the No. 2 position.
Which Role Is Better for You?
It is important to understand the difference between the two roles. Because if you are a No. 1 kind of guy, you will be unhappy and eventually fail as a second banana. And if you are a No. 2 kind of guy, you’ll probably fail if you try to go out on your own.
The story of Pat Farrah illustrates the point.
In 1962, Mr. Farrah went to work for a building-supply store in Bellflower, California. In the challenging atmosphere of a fast-growing company, Mr. Farrah thrived, working his way up to general manager. Then, in 1978, he tried running his own show. He rented a huge warehouse and filled it with household goods.
The idea… as a marketing strategy… worked wonderfully. The store was flooded with customers. But financial controls were lacking, and the store went bust.
A couple of years later, Bernard Marcus, a veteran retailer who had watched Mr. Farrah’s brilliant failure, hired him to become chief merchandising officer of Home Depot.
As the No. 2 guy in a very similar business, Mr. Farrah was able to apply his proven marketing strategy again. But this time, he was free of the operational tasks that he didn’t do so well.
The result? Well, you know the history of Home Depot.
So spend some time asking yourself, “Am I a top dog or a second banana?” Consider what you’ve done before and where you’ve had your successes. Ask yourself honestly, “Do I work better for myself or for someone else?”
You may not arrive at the answer right away, and that’s okay. Most of what you will be learning from ETR… most of the strategies you’ll be applying to achieve your dreams… will get you to one of the top two spots. And by the time you’re there, you should know who you are so you won’t have to go through what Mr. Farrah did.
By the way, Mr. Farrah eventually left Home Depot and tried to run his own business again. Guess what? He failed again. He was hired back as assistant to the man who had replaced him at Home Depot, and very quickly worked his way back to the No. 2 spot. Home Depot profited immensely from his return – and Farrah retired rich and happy.
How to Be a Good No. 2
If you decide your goal is to be the top man’s No. 2, here are some tips to help you:
- Compliment him. I’m not telling you to be a “yes man,” and I’m not telling you to fawn. Find out what he’s great at and tell him how much you admire him for it. Ask to be his protege. Do this earnestly. If you fake it, he’ll know.
- Complement him. Identify something he is weak at and learn to do that well. If he’s great at big ideas and short on follow-up (a very common leadership flaw), become great at follow-up yourself
- Disagree with him. Not all the time – and only when you are sure he is wrong. Have the facts at your disposal and have at least two alternative ideas handy to offer when he accepts your correction.
- Be loyal. This is the main rule for being a good No. 2. Find out what he really wants to accomplish, and make that your primary business goal. You must operate in support of his goal even when he’s not watching. The only way you can do that is by making it your top goal too.
Being No. 2 may not be as glamorous as being top dog. But it has its advantages:
- You have a lot of power, sometimes as much as No. 1.
- You can make a lot of money, sometimes more than No. 1.
- You have the support of the most important guy (something he can’t say).
- You are first in line to take over when No. 1 retires.
There’s no shame in being No. 2. In fact, it could be your ticket to wealth and respect and success.[Ed. Note: Mark Morgan Ford was the creator of Early To Rise. In 2011, Mark retired from ETR and now writes the Palm Beach Letter. His advice, in our opinion, continues to get better and better with every essay, particularly in the controversial ones we have shared today. We encourage you to read everything you can that has been written by Mark.]