Page 326 - Ray Dalio - Principles

Self-reflectiveness is the quality that most differentiates those
who evolve quickly from those who don’t. Remember: Pain +
Reflection = Progress.

b. Know that nobody can see themselves objectively. While we should all

strive to see ourselves objectively, we shouldn’t expect
everyone to be able to do that well. We all have blind spots;
people are by definition subjective. For this reason, it is
everyone’s responsibility to help others learn what is true
about themselves by giving them honest feedback, holding
them accountable, and working through disagreements in an

open-minded way.

c. Teach and reinforce the merits of mistake-based learning. To encourage
people to bring their mistakes into the open and analyze them
objectively, managers need to foster a culture that makes this
normal and that penalizes suppressing or covering up
mistakes. We do this by making it clear that one of the worst
mistakes anyone can make is not facing up to their mistakes.

This is why the use of the Issue Log is mandatory at
Bridgewater.

3.5 Know what types of mistakes are

acceptable and what types are

unacceptable, and don’t allow the

people who work for you to make

the unacceptable ones.

When considering the kinds of mistakes you are willing to
allow in order to promote learning through trial and error,

weigh the potential damage of a mistake against the benefit of
incremental learning. In defining what latitude I’m willing to
give people, I say, “I’m willing to let you scratch or dent the
car, but I won’t put you in a position where there’s a
significant risk of your totaling it.”