Page 433 - Ray Dalio - Principles

A good guardrail typically takes the form of a team member whose strengths compensate for
the weaknesses of the team member who needs to be guardrailed. A good guardrailing
relationship should be firm without being overly rigid. Ideally, it should work like two people
dancing—they’re literally pushing against each other, but with a lot of mutual give-and-take. Of
course, having someone in a job who needs to be guardrailed is not as good as having someone in
a job who will naturally do the right things. Strive for that.
a. Don’t expect people to recognize and compensate for their own blind spots. I constantly see people form wrong
opinions and make bad decisions, even though they’ve made the same kinds of mistakes before—
and even though they know that doing so is illogical and harmful. I used to think that they would
avoid these pitfalls when they became aware of their blind spots, but typically that’s not the case.
Only very rarely do I hear someone recuse himself from offering an opinion because they aren’t
capable of forming a good one in a particular area. Don’t bet on people to save themselves;
proactively guardrail them or, better yet, put them in roles in which it’s impossible for them to
make the types of decisions they shouldn’t make.
b. Consider the clover-leaf design. In situations where you’re unable to identify one excellent
Responsible Party for a role (which is always best), find two or three believable people who care
deeply about producing excellent results and are willing to argue with each other and escalate
their disagreements if necessary. Then set up a design in which they check and balance each other.
Though it’s not optimal, such a system will have a high probability of effectively sorting the
issues you need to examine and resolve.

13.8 Keep your strategic vision the same while making
appropriate tactical changes as circumstances dictate.

Bridgewater’s values and strategic goals have been the same since the beginning (to produce
excellent results, meaningful work, and meaningful relationships through radical truth and
transparency) but its people, systems, and tools have changed over forty-plus years as we have
grown from a one-person company to a 1,500-person organization—and they can continue to
change while maintaining values and strategic goals as newer generations replace older ones. That
can happen for organizations in much the same way as it happens for families and communities.
To help nurture that, it is desirable to reinforce the traditions and reasons for them, as well as to
make sure the values and strategic goals are imbued in the successive leaders and the population
as a whole.
a. Don’t put the expedient ahead of the strategic. People often tell me they can’t deal with the longer-term
strategic issues because they have too many pressing issues they need to solve right away. But
rushing into ad hoc solutions while kicking the proverbial can down the road is a “path to
slaughter.” Effective managers pay attention both to imminent problems and to problems that
haven’t hit them yet. They constantly feel the tug of the strategic path because they worry about
not getting to their ultimate goal and they are determined to continue their process of discovery
until they do. While they might not have the answer right away, and they might not be able to
come up with it by themselves, through a combination of creativity and character they eventually
make all the necessary upward loops.

b. Think about both the big picture and the granular details, and understand the connections between them. Avoid
fixating on irrelevant details. You have to determine what’s important and what’s unimportant at
each level. For example, imagine you are designing a house. First you need to start with the big
picture: Your house will sit on a plot of land, and you have to think through where the water
comes from, how the house gets hooked up to the power grid, and so on. Then you need to decide
how many rooms it will have, where the doors will go, where you need windows, and so on.
When designing the plan, you need to think about all of these things and connect them, but that
doesn’t mean that you actually need to go out and pick the hinges for the door yourself. You just
need to know that you’ll need a door with hinges and how it fits into the bigger picture of the
house.