The Three Golden Virtues – Revisiting Warren Buffet’s Hiring Method

by Dan Barthell

Warren Buffett likes to say that he hires people based on three things:

1. Intelligence

2. Energy (aka Initiative)

3. Integrity

…with Integrity being the most important. “If they don’t have Integrity, then you want them slow and stupid.”

These three qualities are essentially what every hiring manager, every search firm, and every company looks for in a qualified candidate, though they may not describe it in those exact words.

In another post, I talked about the importance of industry and functional experience, the reality of today’s competitive hiring landscape, and the unwillingness of hiring managers to take a risk on candidates who don’t have the requisite “hard” skills.

While that all remains true, the best hiring managers and organizations put just as much emphasis, if not more, on the “Three Golden Virtues” that Mr. Buffett delineates.

Let’s start with Intelligence, the most quantifiable of the three. In my opinion, the best way to assess Intelligence is through a formal assessment. If you don’t have one in your recruiting process, go find one. There are many out there, but I would suggest using one that includes a cognitive portion — something that measures a person’s speed of reasoning. I recommend Prevue HR Systems. 

Without a “test” of some kind, you have no material proof of a person’s mental capacity and discernment. Instead, you complete the interview and then make your best guess based on the candidate’s answers. This may be called the “Gut Instinct Method.”

Though many hiring managers have had success by trusting their instinct, imagine if other institutions did not utilize their almost infamous quantitative tools. For example, undergrad and graduate schools place a huge value on various test scores (SAT, ACT, GMAT, etc.), grade point averages, and class rank. NFL teams use combine numbers and the Wonderlic test. Other professional groups like Accountants, Financial Advisors and Lawyers use the CPA, CFA, and the Bar respectively, in order to test a person’s knowledge and intelligence.

The first quality on Buffet’s list, therefore, should not be wholly left to the judgement of the interviewer. An assessment should also play a part.

That leaves us with the final two “Virtues”: Energy and Integrity.

Energy and Integrity are very difficult to judge in a one-on-one interview, simply because these qualities are “tested” over a period of time. Phone references and letters of recommendations can be useful, but they can also be biased toward the candidate. Rarely does a reference speak negatively him or her.

Assessing these two qualities is really at the heart of the interview process. Great hiring managers are able to combine all the little clues and impressions from different sources into one big picture. An obvious instance of this is someone who has had several jobs in a small period of time. This is a red flag to so many people. But why exactly?

At the risk of sounding too blunt, I think it boils down to a lack of work ethic and motivation; or in other words, a lack of Energy and Integrity. People who are high on these scales tend to feel like they owe something to their employer (what some might call Gratitude) and so make a commitment for a least two years in a given role.

I can’t stress enough that your goal as the hiring manager should be to bring out these two qualities, as if you were painting a picture, based on all the information available. And typically the more information the better. Use an assessment, call their references, analyze their resume, check their LinkedIn profile, check Google, Facebook, Twitter, etc. The more details you can gather, the more accurate your “picture” will be.

If, at the end of the process, you can confidently check all three boxes (Intelligence, Energy, Integrity), with Integrity being the most important, then congratulations, you’ve found a great candidate. And you’ve made Mr. Buffett proud.