Both leaders love a bargain and abhor unnecessary risk: Abel shares with Buffett a sorcerous talent for dealmaking. The future CEO is especially adept at grabbing great assets at distressed prices in rough markets. Notable examples are BHE’s purchases of pipeline and natural gas giants for a song in the early 2000s, after buyers intoxicated by deregulation such as Enron and Williams Companies vastly overpaid for them. The difference: Abel did the sweat-the-details stewardship that made the businesses better. Buffett famously didn’t get much into operations, relying instead on his one-of-a-kind knack for picking crack operators. Like Buffett, Abel is an accounting whiz. Going forward, Abel is most likely to continue Buffett’s practice of spreading acquisitions and investments across diverse industries so that through the cycle, winners in rising markets offset the laggards in temporarily falling sectors, and he would never bet the franchise on the purchase of a single gigantic business.
Expect Abel to be more hands-on than Buffett: The best wager is that Abel will impose tougher operating goals on the businesses, then help diplomatically steer their CEOs toward the best route for getting there. Jim Weber, former head of Brooks, disclosed that Abel visited the running-shoe maker’s Seattle headquarters several times a year for strategy sessions. “If you’re not performing, he’ll tell you, and you have a few months to get on track,” Weber said during an interview at the 2021 annual meeting. Abel is also taking a closer look at how much the subs are spending on new plants and other capex. Says Adam Mead, who wrote the definitive book on Berkshire’s financial history, “a couple of the CEOs told me that he’s imposed a kind of advisory cap on capital spending. Go over the limit and it triggers a conversation with Greg.”
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Contact CEO Daily via Diane Brady at diane.brady@fortune.com
