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NewsMaterial4 min readDisconfirmAI Editorial

John Garrett, Author of Investment Masters Class: Listening Is a Compound-Interest Source for Management That Is Severely Undervalued

In the author of Investment Masters Class John Garrett's compilation of attribution statements from operators such as Warren Buffett, John Malone, and Ken Iverson, listening is argued not to be a soft skill but a disciplined practice. Managers willing to listen are brought information; those unwilling are brought reassurance. Over ten to twenty years, these two flows compound into vastly different competitive positions. The article concludes with a set of observable due diligence questions for investors.

2026-10-28 13:11 GMT+8

Warren Buffett was once asked about the management fads that seem to sweep through business schools and boardrooms every few years. His answer was typically understated: “There are these fads in management… obviously, listening to your customer and things like that… nothing makes more sense. But it’s hard to write a 300-page book that just says, ‘Listen to your customer.’” John Garrett, author of Investment Masters Class, believes this line captures the dilemma of many truly important ideas in business: they are too simple to sell. Nobody builds a consulting practice around listening. Yet when he reviews his notes on hundreds of businesses studied and the coaches and captains who built great teams, a recurring finding emerges: when the builders explain what made the difference, surprisingly many do not talk about vision or persuasion, but about listening—not as a soft skill or a pleasant personal quality, but as a discipline practiced daily and embedded in how the company operates.

Garrett distills this argument into a mechanism of information flow. Ken Iverson, who built Nucor into the most efficient steelmaker in America, pointed out that a reputation for good listening encourages others to proactively bring information. Garrett derives from this a distinction with direct significance for investors: a leader known for listening is brought information, while a leader known for not listening is brought reassurance. Over ten to twenty years, the difference between these two information flows compounds like everything else. One company discovers its problems while they are still small; the other finds out from its customers, competitors, or share price.

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This mechanism can be observed at three levels. First, at the customer level: Dallas car dealer Carl Sewell refused to assume he knew what his customers wanted, instead actively seeking out customers who had left to ask why they bought a Mercedes or Lexus instead of a Cadillac—most companies study existing customers, rarely those who have churned, and the truth usually lies with the latter. Second, at the employee level: When Tom Hennesy took over Tractor Supply, he asked store managers only one question, “What’s wrong?” After listening for a month or two, he said, “We have two problems: we’re confused, and we don’t have any inventory to sell.” The solution followed, and the company subsequently became one of America’s finest compounding machines. Third, in the behavioral patterns of new executives: David Marquet, upon taking command of the nuclear submarine Santa Fe, skipped the standard two-week file review procedure and instead spent time talking to people on the ship; within two years, the submarine went from the worst-performing in the fleet to the best.

Garrett ultimately translates these observations into executable due diligence questions for investors: How did the CEO spend their first three months in the role? When was the last time an executive or board member heard directly from a dissatisfied customer? What happened the last time someone told the CEO they were wrong? Where do improvement ideas come from? Can management point to a significant decision changed because of feedback from employees or customers? These answers rarely appear in annual reports; they emerge in conversations with customers, employees, and management, often requiring years of accumulation. The author points out that the real challenge may not lie in knowing what questions to ask, but in being willing to hear the answers.

It should be noted that the strength of this argument lies in the richness of its attributions and the clarity of its mechanism, rather than quantitative validation. Garrett provides no control groups, regression analysis, or measurable proxy indicators to isolate the independent contribution of listening relative to other management advantages. A company that listens well may simultaneously possess better hiring, stronger culture, and superior products; listening is not necessarily the sole causal variable. However, as a due diligence framework—that is, observing whether information reaches decision-makers before distortion—it provides a set of specific test points more concrete than reading strategic statements. Its value lies not in proving causality, but in narrowing the scope of judgment.

Sources

  • mastersinvest.comInvestment Masters Class↗
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