Page 416 - Ray Dalio - Principles

In the case of our client service analytics team, I knew that
unless we got to the root cause of the problems, standards
would continue to decline. Bridgewater’s other leaders agreed.

So I led a series of diagnostic sessions with the team, getting
everyone at every level into the room to probe and find out
what had gone wrong. I started with my mental map of how
things should’ve gone—based on the machine I’d built—and
asked the new managers to describe what had actually
happened. Bad outcomes don’t just happen; they occur
because specific people make, or fail to make, specific

decisions. A good diagnosis always gets to the level of
determining what it is about those people that led to the bad
outcomes. This can be uncomfortable but if someone isn’t
suited for a job, they need to be moved out of it so that the
same mistakes won’t keep occurring. Of course, nobody is
perfect; everyone makes mistakes. So it is important to look at

people’s track records and their specific strengths and
weaknesses in doing a diagnosis.

Coming out of these sessions, a few things were clear:
Several of the new line managers who the top managers had
brought in to run client service analytics didn’t have the right
skills, synthesis abilities, or levels of caring to oversee the
quality-control process; and the top managers were far too

distant from the area and not probing adequately to make sure
that everything was going well. This was the “what is”—the
reality we faced that produced our problems. It wasn’t a pretty
picture, but it was exactly what we needed to know in order to
move to the next step of designing the changes we had to
make.

The following principles flesh out how to diagnose well,
beginning with a basic overview.

12.1 To diagnose well, ask the following

questions:

1. Is the outcome good or bad?
2. Who is responsible for the outcome?