Page 129 - Ray Dalio - Principles

of the founder-leader role. So I reached out to some of the
greatest experts I could speak with for advice. Perhaps the best
advice we received came from management expert Jim

Collins, who told us that “to transition well, there are only two
things that you need to do: Put capable CEOs in place and
have a capable governance system to replace the CEOs if
they’re not capable.” That was what I had failed to do and
what I now had a second shot at doing right. So I began to
think about governance in a way that I never had before.

Simply put, governance is the system of checks and

balances ensuring that an organization will be stronger than
whoever happens to be leading it at any one time. Because I
was a founder-entrepreneur, I had run Bridgewater for thirty-
five years with no formal rules to check and balance me
(though I had created an informal governance system by
having me report to our Management Committee as a check on
my decision making).

While that informal system had worked for me, it could not
work well without me. Clearly, we needed to build a new
governance system that would allow Bridgewater to retain its
unique way of being and its uncompromising standards no
matter who was in charge—and build it to be resilient enough
to change the company’s management if that was required. I
went on to do that with the help of others, and we are doing

that still.

I had learned that it’s wrong to assume either that a person
in one role will be successful in another role or that the ways
one person operates will work well for another. This difficult
year also taught me a lot about the people around me,
especially David McCormick and Eileen Murray, who showed
their commitments to our shared mission, as numerous other

people did. There were some failures that we would have
rather not had, but that was to be expected, given our unique
culture of trial and error and learning from mistakes. Thanks to
the changes we put into place, I was able to step out of my
temporary stint as CEO after one year, in April 2017.

As I write these words in 2017, I view this year as the final

one in my transition from the second phase of my life to the