Page 371 - Ray Dalio - Principles

8 Hire Right, Because the

Penalties for Hiring

Wrong Are Huge

Remember back in Understand That People Are Wired Very

Differently when I described Bridgewater’s hit-or-miss hiring
practices in its early days? At the very beginning, we just hired
people we liked. But too many of them turned out to be bad fits.
Because we liked them, we were reluctant to give up on them, and
things often went from bad to worse. So we started hiring like
most companies do, by looking at résumés, narrowing the lists,
and then interviewing to get a gut feel for who was right. But the
questions we asked our candidates, unlike the questions on a
scientifically constructed personality test, were unlikely to elicit
answers truly indicative of what they were like.

What we were doing, essentially, was looking at prospective
employees through our own biased perspectives. Those of us who
were linear thinkers tended to want to hire linear thinkers; those of
us who were lateral thinkers tended to want to hire lateral thinkers.
We all thought the type we chose would perform best in all jobs,
and as a result we weren’t able to accurately predict who would
succeed and who would fail in our very unusual environment. As
a result, we continued to make a lot of bad hires.

Eventually we learned from our mistakes and failures that we
could improve our hiring results in two ways: 1) by always being

crisp and clear on exactly what kind of person we were looking
for, and 2) by developing our vocabulary for and means of
evaluating people’s abilities at a much more granular level. This
chapter lays out in detail the principles we’ve learned for doing
this. While we still make too many hiring mistakes, we have
significantly reduced the odds of making them by following these
processes, which we continually try to improve.