Page 432 - Ray Dalio - Principles

You have to consider whether you should be outsourcing or developing capabilities in-house.
Though temps and consultants are good for a quick fix, they won’t augment your capacities in the
long term.

13.6 Create an organizational chart to look like a pyramid,
with straight lines down that don’t cross.

The whole organization should look like a series of descending pyramids, but the number of
layers should be limited to minimize hierarchy.

a. Involve the person who is the point of the pyramid when encountering cross-departmental or cross-sub-departmental
issues. Imagine an organizational chart as a pyramid that consists of numerous pyramids.
When issues involve parties not in the same part of the pyramid, it is generally desirable to
involve the person who is at the point of the pyramid, and thus has the perspective and knowledge
to weigh the trade-offs and make informed decisions.
b. Don’t do work for people in another department or grab people from another department to do work for you unless you
speak to the person responsible for overseeing the other department. If there is a dispute about this, it needs to
be resolved at the point of the pyramid.

c. Watch out for “department slip.” This happens when a support department mistakes its responsibility
to provide support with a mandate to determine how the thing they are supporting should be done.
An example of this sort of mistake would be if the facilities group thought it should determine
what facilities we should have. While support departments should know the goals of the people
they’re supporting and provide feedback regarding possible choices, they are not the ones to
determine the vision.

13.7 Create guardrails when needed—and remember it’s
better not to guardrail at all.

Even when you find people who are great clicks for your design, there will be times when you’ll
want to build guardrails around them. No one is perfect, everyone has strengths and weaknesses,
and as hard as you look, you won’t always be able to find everything you want in one person. So
look down on your machine and the people you choose for your roles, and think about where you
might need to supplement your design by adding people or processes to ensure that each job is
done excellently.
Remember, guardrailing is meant to help people who can by and large do their jobs well—it’s
intended to help good people perform better, not to help failing people reach the bar. If you’re
trying to guardrail someone who is missing the core abilities required for their job, you should
probably just fire them and look for someone else who will be a better click.