The Kaufman Formula: How Glenair's CEO Combines Culture, Integrity, and Lifelong Learning for Success
At a recent Fidelity Bancorp Funding event, Peter Kaufman, CEO of Glenair and a distinguished business leader, provided invaluable insights and methodologies to achieving business and personal success. As the steward of Poor Charlie's Almanack: The Wit and Wisdom of Charles T. Munger, Kaufman has learned from some of the brightest minds in business and has successfully led Glenair, a world-class company, for decades. Here are some key takeaways from his talk.
A Balanced Network Drives a Balanced Life
According to Kaufman, a balanced life is important for personal well-being but also drives business success. It is important to invest in diverse areas of life, such as spirituality, friendships, and community involvement. This holistic approach provides the foundation for personal growth and sustained professional success.
One example Kaufman shared is the importance of volunteering. Volunteering isn't just about giving back as it also provides a venue to acquire and polish new skills. In environments without formal hierarchy, individuals must learn to lead through influence rather than authority. This nurtures leadership skills that are often underdeveloped in traditional corporate settings.
Kaufman advises treating personal aspects of life, like health and emotional well-being, as the highest priority. Many human relationships are transactional, but to truly thrive, one must cultivate non-transactional relationships—those found in family, spirituality, volunteering, and hobbies. These enrich life and provide meaning far beyond material success.
Culture Creates a Competitive Advantage
Under Kaufman’s leadership, Glenair has developed a unique company culture centered on treating employees as family. The collaborative atmosphere allows everyone to feel safe, supported, and part of the team. Glenair does not conduct layoffs and refrains from systematically cutting low performers, fostering a high-performing workforce that feels valued while delivering one of the world’s best kept compounding results over the past half century.
The Five Aces for a Money Manager
In his discussion on finance, Kaufman shared five essential traits he looks for in a great money manager, which he refers to as the "Five Aces":
Total Integrity: Honesty, transparency, and trust are the foundation. A financial advisor must always do what is in the best interest of the investor, ideally even putting the clients’ interests above their own.
Deep Fluency: The advisor possesses deep knowledge and expertise in their professional area. Simply put, they do what they say they can do and will deliver on their professional promises.
Fair Fee Structure: Compensation should be fair, and performance based. The best managers align fee structures to results. Warren Buffett only earned a fee once a 6% rate of return was achieved. He then shared in the upside with 25% of the profits over 6% earned thereby creating a win-win scenario.
Operate in an Uncrowded Space: Operate in areas with less competition and where innovation and creativity provide significant opportunities to differentiate. Use unique approaches that cannot be easily copied such as company culture and business strategies to separate from the crowd. “Where there is mystery, there is margin” and visa versa.
Runway: Longevity and the potential for future growth are important. While experience matters, businesses and investments require a long-term trajectory for success and providing ample time and opportunity for growth and development is critical.
Personal Philosophies for Growth
Kaufman, heavily influenced by the teachings of Charlie Munger, shared some of his personal philosophies that have shaped his leadership approach:
Live in Acceptance: “A wise man surrounds himself with other wise people and avoids engaging with fools.” The smartest people offer the strongest advice which is anchored to long-term success.
Be a Lifelong Learner: Lifelong learning through reading and study is essential. Reading allows individuals to accumulate knowledge while avoiding the mistakes that others have made.
Find What Works and Copy It: Identify successful strategies and replicate them versus attempting to reinvent from scratch.
Avoid Asininities: Avoid the classic mistakes, negative behaviors, and toxic relationships that lead to poor outcomes. Surround yourself with additive people and systems.
Business Philosophies for Long-Term Success
For business, Kaufman applies principles that drive organizations and individuals to grow and succeed:
Top Down and Bottom Up: A dual approach will ensure that both strategic vision and grassroots feedback are considered for stronger decision-making, essential for minimizing blind spots.
Sticks Before Logs: Start small, gather feedback, and make incremental improvements before committing to larger investments. This ensures that your foundation is strong before scaling.
People-Based Goals: Don’t focus on rigid numeric goals. Kaufman advocates for flexible, “non-numeric, people-based goals” that keep people first during changing circumstances.
Something to Add, Not Something to Prove: Shift your mindset from trying to prove yourself to focusing on adding value to others. Meaningful relationships are built when people focus on making a long-term impact in others versus seeking personal validation.
Conclusion
By focusing on timeless principles such as cultivating a culture of care, balancing personal and professional life, and applying wisdom from books and mentors, Peter Kaufman offers a rich roadmap for success. Through his leadership at Glenair, where people are prioritized, he has proven that investing in people generates long-term success while also allowing everyone to build meaningful, rewarding, and high performing careers and lives.