Buffet and Augustine on The Balanced Inner Scorecard

We’re all familiar with the balanced scorecard as a performance management tool used to keep track of strategic or operational activities and their consequences.    

The Oracle of Omaha

Warren Buffet speaks about a different kind of scorecard. He looks for three things in managers: integrity, intelligence, and energy—and remarks that the second and third of these will kill you if you don’t have the first.  

In respect of the first, he says that one way to test for integrity is to test people’s “inner scorecard”: To use Buffet’s example, would somebody prefer to be known as the greatest lover in the world, while in fact they are the worst, or would they rather be known as the worst, while in fact they are the best?      

The first person prefers glamour to performance, appearance to reality, and reputation to substance. Given that there is a trade-off here, the second person chooses performance and accepts bad press; chooses achievement over the fame that goes with the appearance of achievement; and chooses conscience over the limelight (much as they might like the limelight).  Such a person, Buffet argues, is trustworthy, because they possesses the character to make the right choices when they are unpleasant; because they are both humble and authentic; because they focus on success in the matter at hand and not on the adulation that follows success (or the appearance of success).      

Enter Augustine

The Algerian-Roman philosopher, Augustine of Hippo (354 – 430 AD), who was trained in Rome’s most famous schools of rhetoric and knew a thing or two about making a winning impression, wrote about a different kind of inner scorecard. Since it includes multiple elements, I’ll refer to it as a balanced inner scorecard.    

Augustine originally called this the “ordo amoris”—the “order of loves” or, perhaps better, the “hierarchy of loves”. And this is, roughly, what the Oracle of Omaha had in mind when he spoke of an “inner scorecard”.    

Augustine observed that we not only prioritize certain things and certain values in individual actions, but that there is an internal prioritization that becomes embedded (firmly, though it can be altered) in our character or, indeed, in our hearts: work, family, money, pleasure, power, friendship, authenticity, integrity, and many other values are somehow ranked within us. The ranking reveals itself when we must choose between, for example, relationships and independence, fame and service, health and wealth, pleasure and loyalty, and so forth.    

Each of us has one. Such a hierarchy is only “balanced” when a leader has their priorities straight. If they don’t, then there will be consequences for them and for many other stakeholders.  

Story from the Road

A simple example: Rich Lesser, Global Chair at BCG, related the story of a young associate who, in the middle of a consulting mandate, became aware that the client’s success in a given region was the consequence of inappropriate “payments” to customers. The associate raised the matter with her managing partner, who raised it with the client and terminated the mandate. The associate—and the partner—had the courage to prioritise truth, ethics and compliance over billings and, potentially, career progress. The inner scorecard was balanced.        

How do we apply this in executive search scenarios?  

Anthony Howard, the “CEO whisperer”, has an interesting answer. He proposes asking candidates the following question: “Tell me about an ethical conflict that you have recently faced in your work”. The answers to such a question will reveal a lot about a) what a candidate deems to be an ethical conflict, b) how they prioritize competing values or demands, and c) and whether, in a given situation, they were able find intelligent solutions while remaining faithful to their values.  

The idea of a balanced inner scorecard provides a concept with which we may evaluate our own lives and careers, as well as a framework for thinking about specific challenging scenarios, and a concept that can provide immediate added value when recruiting executives for mission-critical roles.  

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We’re all familiar with the balanced scorecard as a performance management tool used to keep track of strategic or operational activities and their consequences. Warren Buffet looks for three things in managers: integrity, intelligence, and energy—and remarks that the second and third of these will kill you if you don’t have the first.