Page 388 - Ray Dalio - Principles

and can’t be trusted to do based on what they are like. From there, you can determine what to do
about it.

e. Remember that when it comes to assessing people, the two biggest mistakes you can make are being overconfident in your
assessment and failing to get in sync on it. If you believe that something is true about someone, it’s your
responsibility to make sure that it is true and that the person you’re assessing agrees. Of course, in
some cases it may be impossible to get in sync (if you believe that someone was dishonest and they
insist that they weren’t, for example), but in a culture of truth and transparency it is an obligation to
share your view and let others express theirs.
f. Get in sync on assessments in a nonhierarchical way. In most organizations, evaluations run in only one
direction, with the manager assessing the managee. The managee typically disagrees with the
assessment, especially if it is worse than his or her self-assessment, because most people believe
themselves to be better than they really are. Managees also have opinions about managers that they
wouldn’t dare bring up in most companies, so misunderstandings and resentments fester. This
perverse behavior undermines the effectiveness of the environment and the relationships between
people. It can be avoided by getting in sync in a high-quality way.
Your reports have to believe that you’re not their enemy—that your sole goal is to move toward
the truth; that you are trying to help them and so will not enable their self-deception, perpetuate a
lie, or let them off the hook. This has to be done in an honest and transparent way, because if
someone believes they are being pigeonholed unfairly the process won’t work. As equal partners, it
is up to both of you to get to the truth. When each party is an equal participant, no one can feel
cornered.
g. Learn about your people and have them learn about you through frank conversations about mistakes and their root causes.
You need to be clear in conveying your assessments to your reports and open-minded in listening to
their replies so you can work on setting their training and career paths together. Recognizing and
communicating people’s weaknesses is one of the most difficult things managers have to do. It’s
important for the party receiving feedback to be sympathetic to the person trying to give it, because
it’s not easy—it takes character on the part of both participants to get to the truth.
h. Understand that making sure people are doing a good job doesn’t require watching everything that everybody is doing at
all times. You just have to know what they are like and get a sampling. Regular sampling of a
statistically reliable number of cases will show you what a person is like and what you can expect
from them. Select which of their actions are critical enough to need preapproval and which can be
examined later. But be sure to do the audit, because people will tend to give themselves too much
slack or could cheat when they see that they’re not being checked.
i. Recognize that change is difficult. Anything that requires change can be difficult. Yet in order to learn and
grow and make progress, you must change. When facing a change, ask yourself: Am I being open-
minded? Or am I being resistant? Confront your difficulties head-on, force yourself to explore
where they come from, and you’ll find that you’ll learn a lot.
j. Help people through the pain that comes with exploring their weaknesses. Emotions tend to heat up during most
disagreements, especially when the subject is someone’s weaknesses. Speak in a calm, slow, and
analytical manner to facilitate communication. Put things in perspective by reminding them that
their pain is the pain that comes with learning and personal evolution—and that knowing the truth
will put them on the path to a much better place. Consider asking them to go away and reflect when
they are calm, and have a follow-up conversation a few days later.
Ultimately, to help people succeed you have to do two things: First let them see their failures so
clearly that they are motivated to change them, and then show them how to either change what they
are doing or rely on others who are strong where they are weak. While doing the first without the
second can be demoralizing to the people you are trying to help, doing them both should be
invigorating, especially when they start experiencing the benefits.

9.7 Knowing how people operate and being able to judge
whether that way of operating will lead to good results is
more important than knowing what they did.

Knowing what people are like is the best indicator of how well they are likely to handle their
responsibilities in the future. At Bridgewater, we call this “paying more attention to the swing than