The Oracle of Omaha meets the Visionaries of Galillee

Iscar Metalworking was an Israeli producer of metal working and metal cutting tools for industries requiring precise tolerances. Iscar had grown into a global enterprise with employees and offices throughout the world, though it was founded in 1952 in modest circumstances. The business thrived on innovation, passion and dedication to a client-centered approach. Something appeared on the horizon, however, which could potentially disrupt the hard-developed strategies and prosperity of its winning approach. Iscar was a second generation family firm whose CEO was not a family member. Retirement loomed in the medium-term for the family member chairman and the family was unsure of next generation interest in hands-on management of the company. How best to preserve for the future what two generations had worked so diligently to build and nourish? Management evaluated a broad range of options. But Iscar’s special brand of success was unique and to be protected at all costs. It became evident that the best solution for the company was to evolve into a situation where it could remain operationally independent yet have its future—corporate culture, strategic approach– assured. It felt like looking for a needle in a haystack but the answer finally appeared. Berkshire Hathaway, run by the famed investor Warren Buffett, appeared to operate in fashion very recognizable to Iscar. Independence, maturity, values-driven management were evident in the way BH did business. This case explores Iscar’s steps toward growth and success, its recognition that both a familiar and a different future must be assured for the long-term and the process and reality of becoming part of the BH dynasty.

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