Page 313 - Ray Dalio - Principles

family members have to perform excellently or be cut. If I had
a family business and a family member wasn’t performing
well, I would want to let them go because I believe that it isn’t

good for either the family member (because staying in a job
they’re not suited to stands in the way of their personal
evolution) or the company (because it holds back the whole
community). That’s tough love.

To give you an idea of how Bridgewater’s culture
developed and how it’s different from what you’d find at most
companies, I will tell you about how we handled benefits in

our early days. When the company was just me and a small
group of people, I didn’t provide employees with health
insurance; I assumed that they would buy it on their own. But I
did want to help the people I shared my life with during their
times of need. If someone I worked with got seriously sick and
couldn’t afford proper care, what was I going to do, stand by
and not help them? Of course I’d help them financially, to

whatever extent I could. So when I did begin providing health
insurance to my employees, I felt that I was insuring myself
against the money I knew I’d give them if they were injured or
fell ill as much as I was insuring them.

Because I wanted to make certain that they received the
best care possible, the policies I provided allowed them to go
to any doctor they chose and spend whatever amount was

required. On the other hand, I didn’t protect them against the
little things. For example, I didn’t provide dental insurance
any more than I provided car insurance, because I felt that it
was their own responsibility to protect their teeth, just as it
was their own responsibility to take care of their car. If they

needed dental insurance, they could pay for it out of their own
pocket. My main point is that I didn’t approach benefits in the
impersonal, transactional way most companies do, but more
like something I provided for my family. I was more than
generous with some things and expected people to take
personal responsibility for others.

When I treated my employees like extended family, I found

that they typically behaved the same way with each other and
our community as a whole, which was much more special than
having a strictly quid pro quo relationship. I can’t tell you how