Page 427 - Ray Dalio - Principles

13 Design Improvements to Your

Machine to Get Around Your Problems

Once you’ve successfully diagnosed the problems standing in the way of your achieving your
goals, you need to design paths for solving them. Designs need to be based on deep and accurate
understandings (which is why diagnosis is so important); for me, it’s an almost visceral process of
staring at problems and using the pain they cause me to stimulate my creative thinking.
This is exactly how it was for the team responsible for client service analytics—and especially
for Bridgewater’s co-CEO David McCormick, who was then head of the Client Service
Department. Coming out of the diagnosis, he moved quickly to design and implement changes.
He fired the team members who had allowed standards to slip and reflected deeply on what new
designs he could implement to get the right people into the right roles. In selecting his new
Responsible Parties for client service analytics, he picked one of our top investment thinkers who
also had extremely high standards (and was very outspoken about cases where he saw them
slipping) and paired him with one of our most experienced managers, who knew how to build the
right process flows and make sure everything that needed to happen would go precisely as
planned.
But that wasn’t all. When coming up with a design, it’s impor-tant to take time to reflect and
make sure you’re looking at the problems from the highest level. David knew it would be a
mistake to look only at this one part of the department, because the same slip in quality that had
happened there was likely to have occurred in other places too. He needed to think creatively to
come up with a design that would build a durable culture of pervasive excellence throughout the
entire department. This led to his invention of “Quality Day,” biannual meetings in which
members of the Client Service Department would review each other’s mock presentations and
memos and give direct feedback on what was good and what wasn’t. More importantly, the
meetings were a chance to step back and assess whether the ways of ensuring quality were
working as expected—by bringing in a bunch of tough, independent thinkers to offer criticism
and get the process realigned on what good looks like.
Of course, there were many more details to all of David’s plans for transforming the
department. But the important thing is how all the details and plans extended from a high-level
visualization of what was required. Only when you have such a sketch can you begin to fill it in
with specifics. Those specifics will be your tasks; write them down so you don’t forget them.
While the best designs are drawn from a rich understanding of actual problems, when you’re
just starting out on something, you often have to design based on anticipated problems as opposed
to actual ones. That’s why having systematic ways of tracking issues (the Issue Log) and what
people are like (the Dot Collector) is so useful: Instead of just relying on your best guesses of
what might go wrong, you can look at data from prior “at bats” for yourself and others and come
to the design process with understanding rather than having to start from scratch.
The most talented designers I know are people who can visualize over time, running through
different collections of people from the scale of small teams to entire organizations, accurately
anticipating the kinds of results they’ll produce. They excel at design and systemization. Hence
the overriding principle of this chapter: Design and systemize your machine. Creativity is also
important to this process, as is character, because the most important problems to design around
are often the hardest, and you need to come up with original ways of addressing them and be
willing to make hard choices (especially when it comes to people and who should do what).
The following principles delve into designing and how to do it well.