What Warren Buffett could profit from
Berkshire Hathaway, legendary billionaire businessman Warren Buffett’s giant holding company, has an appropriately unrefined website that none the less could show a big return on modest investment, says David Bowen.
|Berkshire Hathaway||Morgan Motor Company|
|“(external)FT Bowen Craggs Index> methodology”:http://www.bowencraggs.com/ftindex/methodology|
The most intriguing large corporate website is so intriguing that we do not include it in our FT Bowen Craggs Index of corporate website effectiveness. Warren Buffett’s Berkshire Hathaway is… let’s see what its site says it is. No, it doesn’t have an About us section, so no help there.
On to Wikipedia, to discover that Berkshire Hathaway is “a conglomerate holding company headquartered in Omaha, Nebraska, that oversees and manages a number of subsidiary companies”. The FT Global 500, which we use as the basis for our Index, ranked it as number 13 by market capitalisation last year, so it is well within our criteria for inclusion.
But we don’t include it because we can’t, or at least I don’t think we can. Does that mean there is a major flaw in our methodology? Or that Berkshire Hathaway is doing it all wrong? The question is worth asking because there are still quite a few companies that have a highly decentralised philosophy. They may not be as quirky as Mr Buffett’s beast, but they, too, must wonder just what something as intrinsically ‘central’ as a corporate website is for. Maybe they should follow his line. Maybe.
Scarcely made to measure
Let’s have a quick go at scoring the Berkshire Hathaway site using out methodology. We start with construction. Is the site conventionally-built? Well, no: it is without sections, it has a single page that leads to other pages and from there to PDF documents. Can you see where you? Not often – there are no clickable headers nor any navigation at all, really. How well integrated are subsidiary sites? You can get to them easily by clicking on a list of links; but you can only return by backspacing. Search engine? No. Score maybe 20 out of 64 for construction as a whole.
Message next. The plain-text look has not changed one jot since 1997: the site has just got a lot bigger or, rather, fuller of PDF documents. Is it appropriate to the company? Maybe it is. It says, ‘we don’t have a brand, we don’t do synergy, we are different, we are Warren Buffett’. The message comes across not in look and feel but in tone of voice, particularly in Mr Buffett’s folksy letters to his shareholders. Does it serve an international audience? Not unless they read English, though the English is often rather beautiful. Does it have any company information? I’ve answered that: no. It would be difficult to judge the ‘message’ metrics using the specific questions we ask in our analysis, but if (like me) you think that good English is a nice way of getting your message across, we might get to 24 out of 48.
Contact information? There’s a telephone number and e-mail address – 6 out of 12.
Serving society – corporate social responsibility (CSR), reputation management. No, doesn’t do that: 2 to be generous.
Serving investors? Yes, that’s what the site is for, though investors/analysts will have to plough diligently through PDF documents to find what they want need. No overview information, just year-by-year letters and news releases, as well as the ‘owner’s manual’ issued in 1996 ‘to explain Berkshire Hathaway’s broad economic ‘principles of operation’. Pushing it, we might give 20 out of 32 for the investor metric.
Serving the media next. A deep press release archive goes back to 1996, without any filters, of course. No background material, no pictures: 10 out of 32.
Serving jobseekers? No, that’s not the company’s job – give it 3 for linking to subsidiaries.
Finally, serving customers. This is super quirky. The same line has appeared on the home page since 1997: “GEICO. For a free car insurance rate quote that could save you substantial money. www.GEICO.com or 1-888-395-6349”. More recently, we have been given another ad for a subsidiary, Borsheims, with a quote from Mr Buffett himself: “If you don’t know jewelry, know the jeweller”. I’d be fascinated to know how many clicks these links get. Mr Buffett also sometimes uses his letter to shareholders to plug other companies. ‘Customer journeys’ are otherwise lacking, though if you do link to a subsidiary site, you may well find what you want. Maybe 13 out of 32 for this metric.
For a few dollars more
Being generous, then, we would give berkshirehathaway.com 98 out of 280 – which puts it at the bottom of the Index, two points behind China Mobile. Would this be silly?
It would probably. After all, the site‘s job is to communicate with investors, who are an exclusive bunch with shares valued at $92,400 each (a lot less than a year ago). They presumably get their letters in the post, though they might like to look up old ones online. They may well appreciate Mr Buffett’s economy with web development (a few hundred dollars a year, I would guess). So we could make a good case for saying that the site is not really bad, it’s appropriate.
On the other hand, if Mr Buffett moved into four figures on his web budget, he could do so much more. Just by adding a navigation bar and a search engine, he could make life much easier for analysts and journalists. He doesn’t completely ignore customers, so why not have a changing page of recommendations, each leading to the respective subsidiary’s site? Maybe he could offer similar endorsements aimed at people looking for jobs. I’m sure quite a few people would want to work in a Buffett-owned and Buffett-approved company.
On the right lines
In other words, I think we are right to keep Berkshire Hathaway out of the list. But that does not mean it could not be thinking about using the web more effectively. Maybe it should keep its retro look – the appeal of the Morgan sports car lies in its refusal to change. Could this be the Morgan of the web? Or is the Berkshire Hathaway site just rubbish, and should be replaced as soon as possible? Discuss.
What lessons are there for other decentralised companies? Well, they should no more try to do what Berkshire Hathaway is doing, than other car companies should ape Morgan. But I do think they should study Mr Buffett’s use of language. I’ve always wondered about the received wisdom that people won’t read lengthy text on websites. Maybe, just maybe, it is because the text is generally not well enough written.
First published on 27 May, 2009