Page 102 - Ray Dalio - Principles

confident that the transition would go well, as I hadn’t done
such a thing before. I do things through trial and error—
making mistakes, figuring out what I did wrong, coming up

with new principles, and finally succeeding—and I didn’t see
why my transition should be any different. I also didn’t believe
that it would be fair for me to dump the heavy workload I was
carrying on those I was passing my CEO responsibilities to. I
knew that Lee Kuan Yew, the wise founder and leader of
Singapore for forty-one years, had transitioned out of his
leadership responsibilities to be a mentor, and I had seen how

well that went. For all those reasons, I decided I would stay on
as a mentor. That meant I would either not speak at all or
speak last, but always be available to provide advice. My
partners liked the idea.

We agreed we should begin as soon as possible, so those
replacing me could gain experience and we could make
adjustments as needed. Since what we didn’t know about

transitioning was greater than what we did know about it, we
knew we would need to be careful. We expected that
transitioning well would take a number of years—perhaps two
or three, perhaps as many as ten. Since we had worked
together for many years, we were optimistic that it would be
on the shorter end of that range.

On the first day of 2011 I announced to the company that I

would be stepping down as CEO, with Greg Jensen and David
McCormick replacing me. On July 1, I handed over my
management responsibilities to Greg, David, and the rest of
the Management Committee. Simultaneously, we explained
our “up-to-ten-year transition plan” to our clients.

LEARNING WHAT SHAPERS ARE

LIKE

Naturally the new management team struggled over the next
eighteen months or so. We diagnosed why in the same way an
engineer would diagnose why a machine is operating
suboptimally so it could be reengineered to perform better.