Page 409 - Ray Dalio - Principles

about a case in which we initially failed to maintain
excellence, then perceived the problem, got at its root causes,
designed changes, and pushed those changes through to

produce excellent results.

When I started Bridgewater, I was responsible for
everything. I made the company’s investment decisions and its
management decisions and then I built the organization to
support me and eventually to carry on excellently without me.
As Bridgewater grew, the standard I set was uncompromising
and straightforward: The analysis we provide to clients should

always be of the same quality it would be if I did it myself.
That’s because when clients ask what “we” think, they aren’t
asking what just anyone thinks—they want to know what I and
the other CIOs, who are in charge of our investments, are
thinking. To achieve that goal, Bridgewater’s Client Service
Department either handles the questions they get from clients
themselves or passes them on to people with various levels of

expertise who are assigned to answer questions based on their
level of difficulty. The client advisor (who is a knowledgeable
professional designed to be the interface between Bridgewater
and the client) has to understand the questions well enough to
know who they should be routed to, and they need to review
the answers before they go back to the client to ensure they are

excellent. To be certain that always happens, I created a
checks-and-balances system in which some of our best
investment thinkers both draft memos to clients themselves
and quality-control their colleagues’ work, grading it to
provide traceable metrics that can be followed to monitor how
well things are going and make changes as needed.

In 2011, as a part of my management transition, I handed
the oversight of this process to others, and several months later
one of the people in the Client Service Department began
noticing problems. It started with one memo, which two senior
investment advisors noticed had gone out the door to a client
even though it contained errors. Though these were minor
errors, they were important errors to me. With my prodding,
the new management team began investigating other memos

and discovered that this poorly prepared memo wasn’t just a
one-off; it was symptomatic of a more widespread breakdown