Habits are a Moat
Charlie Munger and Warren Buffett often talk about companies with “moats” or with some intangible asset that makes it very hard for other companies to effectively compete with them. Coca-Cola’s brand is their moat. The network effect has created an amazing moat for Microsoft around their operating system business. Google has a similar network effect moat around their advertising business. While I have almost always heard moats discussed in a business context, I was considering Munger’s “multi-disciplinary” approach recently and realized that moats apply just as well to individuals and the success that they can achieve.
An individual’s moat is their habits. After reading just a little of Munger’s writing it becomes clear that his great success in life comes from his habits of learning constantly, using mental checklists, and approaching all problems in a multi-disciplinary way. I’ve learned enough to recognize how powerful these practices can be but I haven’t really made them into habits. Most people haven’t. Of course, these aren’t the only habits that lead to success, and I’m sure Munger himself has many more. In some ways, his message for individuals is the same as Stephen Covey’s in The Seven Habits of Highly Effective People. Although Covey discusses seven specific habits to develop, he also states up front that it is the habits we have that create success. He wouldn’t limit success to just seven habits any more than Munger would.
Of course, corporations have the equivalent of habits in their corporate culture, and some corporations have great cultures that work like moats. The moats I discussed above, however, are not primarily culture based. Likewise, individuals can have non-habit moats such as personal networks or reputation. However, I believe that to develop these we need to have the right habits. Scoble’s habits of constant blogging and networking have made him into a force to reckoned with in the technology world. Many others have developed the same habits and the same ability to influence others.
Regardless, as I try to become a better software developer in the coming months, one thing that is weighing on me is the idea that I need to be developing the habits of a professional engineer in order to create a personal moat that makes me more competitive. But I’m also looking beyond that to the habits I need to be more successful in other areas of my life - my family, church, hobbies, etc. I suppose its time to go back and read 7 Habits, if only for the reminder of how to change them.