Timeless Wisdom - Praise by Name and Criticize by Category
How Warren Buffet followed advice given by Tom Murphy 60 years ago and it still holds true...
Warren buffet is 94 years old. He is known to the world as Oracle of Omaha and one of the worlds richest man.
For me, while I’m in awe of his financial success, I’m even more inspired by the life lessons and principles he has taught. These lessons transcends markets and money. They were relevant yesterday, hold up today, and will remain relevant for generations to come. Why? Because they tap into the fundamentals of human behavior, judgment, and decision-making.
In this post, I’ll dive into one such lesson, one that I’ve embraced and now apply daily in my communication.
The Origin: Tom Murphy’s Timeless Advice
Over six decades ago, Buffett received this sage advice from Tom Murphy, the CEO of Capital Cities Communications. Murphy, known for his integrity and effective leadership, emphasized the importance of acknowledging individual contributions while addressing issues in a broader context. This approach fosters a culture of recognition and collective responsibility.
Buffett has consistently applied this principle in his communications. In his 2024 shareholder letter, he wrote:
“When discussing problems at specific subsidiaries, we do, however, try to follow the advice Tom Murphy gave to me 60 years ago: ‘praise by name, criticize by category.”
Application in Buffett’s Communications
Buffett’s adherence to this principle is evident in his annual letters, where he openly discusses mistakes and successes. He acknowledges errors in judgment and emphasizes the importance of addressing issues promptly.
Warren in 2024 shareholder letter -
“A decent batting average in personnel decisions is all that can be hoped for. The cardinal sin is delaying the correction of mistakes or what Charlie Munger called “thumb-sucking.” Problems, he would tell me, cannot be wished away. They require action, however uncomfortable that may be.”
This approach not only demonstrates humility but also builds trust with shareholders and employees.
My Learnings and Actions
I apply this principle while managing my team effectively. This principle does enhance team dynamics and productivity:
Praise by Name
Publicly acknowledge individual achievements. This reinforces positives and shares path for others to follow and learn.
Few examples:
“X’s optimization of the database queries improved our application’s performance by 30%.”
”Y’s refactoring efforts improved code readability across the module. Superb work!
Criticize by Category
Address issues collectively without singling out individuals.
Few examples:
“We’ve noticed an increase in bugs post feature development. Let’s revisit our testing approach to improve build quality.”
“As a team, we need to improve our unit test coverage to prevent regressions.”
This approach encourages a culture of recognition and continuous improvement without assigning blame.
If I need to give critical feedback, I always do it in a 1:1. The focus is always on the problem, not the person. Giving and receiving feedback is an important skill that I’ll explore in a future post.
Conclusion: A Leadership Lesson for All
“Praise by name, criticize by category” is more than a managerial tactic; it’s a philosophy that fosters respect, accountability, and growth. By acknowledging individual contributions and addressing challenges collectively, leaders can build cohesive and resilient teams.
As Buffett and Munger have demonstrated, such principles are timeless and universally applicable, transcending industries and roles. It’s helping me and I hope now it helps you in your communications.