Page 384 - Ray Dalio - Principles

culture like Bridgewater’s, you have no choice. You must choose excellence, even though it might
be difficult at the moment, because it’s best for everyone.

9.1 Understand that you and the people you manage will go
through a process of personal evolution.

No one is exempt from this process. Having it go well depends on people’s abilities to make frank
assessments of strengths and weaknesses (most importantly weaknesses). While it’s generally as
difficult for managers to give this feedback as it is for their subordinates to hear it, in the long run it
makes people happier and the organization more successful.
a. Recognize that personal evolution should be relatively rapid and a natural consequence of discovering one’s strengths and
weaknesses; as a result, career paths are not planned at the outset. The evolutionary process is about discovering
people’s likes and dislikes as well as their strengths and weaknesses; it occurs when people are put
into jobs they are likely to succeed at, but in which they have to stretch themselves. Each person’s
career will evolve based on what we all learn about what the person is like.
They should be given enough freedom to learn and think for themselves while being coached so
they are prevented from making unacceptable mistakes. The feedback they receive should help them
reflect on whether their problems are the kind that can be resolved by additional learning or stem
from natural abilities that are unlikely to change. Typically it takes from six to twelve months to get
to know a new employee in a by-and-large sort of way, and about eighteen months for them to
internalize and adapt to the culture. During this time there should be periodic mini-reviews and
several major ones. Following each of these assessments, new assignments should be made that are
tailored to their likes and dislikes and strengths and weaknesses. This is an iterative process, in
which the accumulated experiences of training, testing, and adjusting direct the person to ever more
suitable roles and responsibilities. At Bridgewater, it is typically both a challenging and rewarding
process that benefits the individual by providing better self-understanding and greater familiarity
with various jobs. When it results in a parting of ways, it’s usually because people find they cannot
be excellent and happy in any job at the firm.
b. Understand that training guides the process of personal evolution.Trainees must be open-minded; the process
requires them to suspend their egos while they discover what they are doing well and what they are
doing poorly and decide what to do about it. The trainer must be open-minded as well, and it’s best
if at least two believable trainers work with each trainee in order to triangulate their views about
what the trainee is like. This training is an apprentice relationship; it occurs as the trainer and trainee
share experiences, much like when a ski instructor skis alongside his student. The process promotes
growth, development, and transparency around where people stand, why they stand where they
stand, and what they can do about improving it. It hastens not just their own personal evolution but
the evolution of the organization.
c. Teach your people to fish rather than give them fish, even if that means letting them make some mistakes. Sometimes
you need to stand by and let someone make a mistake (provided it’s not too serious) so they can
learn. It’s a bad sign if you are constantly telling people what they should do; micromanagement
typically reflects inability on the part of the person being managed. It’s also not a good thing for you
as a manager. Instead of micromanaging, you should be training and testing. Give people your
thoughts on how they might approach their decisions, but don’t dictate to them. The most useful
thing you can do is to get in sync with them, exploring how they are doing things and why.
d. Recognize that experience creates internalized learning that book learning can’t replace. There are huge differences
between memory-based book learning and hands-on, internalized learning. A medical student who
has learned to perform an operation in a medical school class has not learned it in the same way as a
doctor who has already conducted several operations. People who excel at book learning tend to call
up from memory what they have learned in order to follow stored instructions. People who have
internalized their learning use the thoughts flowing from their subconscious without thinking, in the
same way they walk down the street. Understanding these differences is essential.

9.2 Provide constant feedback.