Work Principles

• Make Work and Life One and the Same (avoid dichotomies) Dalio’s most fundamental work principle is to make work and passion one and the same and to do it with people one wants to be with.
• Trust in Radical Truth and Radical Transparency Radical truth and radical transparency are essential to creating a real idea meritocracy. However, adapting to radical truth and transparency takes time and is difficult. This is because each person has “two yous.” There is the logical and conscious “you,” and the emotional and subconscious “you.” These “two yous” often work in conflict with each other. While the conscious, “upper- 18 level” you understands the benefit of radical truth and radical transparency, the subconscious, “lower-level” you is skeptical, impatient, and easily frustrated. Adapting can take about eighteen months.
• Use Tough Love Tough love means pointing out mistakes and weaknesses. It is the hardest and most important type of love to give. People may prefer compliments, but accurate and fair criticism is more valuable to their growth and success.
• Meaningful Relationships and Meaningful Work are Mutually Reinforcing The most meaningful relationships are those where people can speak honestly about important matters, learn together, and be open to hold one another accountable to be excellent. Having this type of relationship with coworkers helps people get through challenging work. Meanwhile, the challenging work leads to closer and stronger relationships. This cycle is self-reinforcing and creates success, as shown in the triangle diagram below (p. 337):
• Cultivate Meaningful Work and Meaningful Relationships After establishing a common mission, be loyal to it and watch out for those not operating in concert with it. Ensure everyone is on the same page about expectations and what things are nonnegotiable. One non-negotiable item is that people must give more consideration to others than to themselves. To be considerate means to allow others to do what they want, as long as it’s consistent with the company’s principles and the law, and to be willing to put others ahead of oneself. Understanding the difference between fairness and generosity is important too. Not every generous act needs to be equal. On the management side, determine what is fair and be on the far (generous) side of it, including making sure that employees are well paid. Be aware that the size of an organization can hurt or prevent meaningful relationships. As a company grows, it needs to carefully consider how to maintain a sense of community. For Bridgewater, having departments of 50–150 people helped maintain their sense of community even as they grew.
• Create a Culture in Which It Is Okay to Make Mistakes and Unacceptable Not to Learn From Them While everyone makes mistakes, the difference is successful people learn from their mistakes and unsuccessful people don’t. Directly address mistakes. A work environment where it is okay to safely make mistakes that can be learned from leads to rapid progress and less mistakes over time. Observe mistakes for patterns. Write down mistakes and infer connections between them. Then identify the biggest, most common weakness, known at Bridgewater as the “one big challenge.” No one can see themselves objectively, so everyone should help others learn what is true about themselves by providing honest feedback, by holding them accountable, and by working through disagreements in an open-minded way. The worst mistake someone can make is not owning up to their mistake. Penalize people who cover up mistakes, and foster a culture in which highlighting a mistake is normal.
• Principles to: Get and Stay in Sync People need to be aligned in terms of their shared mission, treatment of one another, and shared understanding of their work responsibilities. Alignment is important to any idea meritocracy and must be conscious, continuous, and systematic:
  1. Conflicts are Essential for Great Relationships Disagreements help determine whether the principles are aligned and lead to a more constructive resolution of differences. Getting in sync through productive conflict and discussion saves time in the long run.
  2. Know How to Get in Sync and How to Disagree Well The key is to know how to move from disagreement to making decisions. To do so, surface the areas of disagreement, either formally in writing or informally in discussion. Not all complaints are worth discussing, so focus on those that are constructive. Always try to see the other sides to a story.
  3. Be Open-minded and Assertive at the Same Time Getting in sync involves two attributes: assertiveness and open-mindedness. To be open-minded is to see things through another’s eyes. To be assertive is to clearly communicate how one sees things through one’s own eyes. To encourage open-mindedness, use the two-minute rule in meetings: allow the speaker two minutes uninterrupted to explain their thinking. Anyone can become more open-minded and assertive with practice, training, and reinforcement.
• Principles to: Get Beyond Disagreements Sometimes people can’t agree on what’s true and what to do about it. In these instances, Bridgewater follows a set of procedures for believability-weighted voting that enforces the outcome. Below are ways to proactively manage disagreements:
  1. Principles Can’t be Ignored Treat principles like laws. Apply the same standard to everyone, i.e., the same levels of openmindedness, consideration, and integrity. Hold everyone accountable to the principles.
  2. Don’t Confuse the Right to Complain, Give Advice, and Openly Debate with the Right to Make Decisions Everyone has their role, responsibilities, and authority based on their demonstrated ability. Challenging and probing individuals and managers alike can improve thinking and provide alternative perspectives. Advice and debate move throughout the hierarchy, but the decisionmaking authority does not transfer.
  3. Don’t Leave Important Conflicts Unresolved The long-term consequence of avoiding confrontation is “massively destructive.” Avoid the “narcissism of small differences”, i.e., avoid allowing little differences to divide when in agreement on the big things. Don’t get stuck in disagreement. Vote on it as a group or risk escalating the matter.
  4. Support a Decision Once it is Made, Regardless of the Individual Disagreement When those in a group who don’t get what they want continue to fight, the group fails. The cohesion of the group always supersedes individual desires.
• What is Work? People should view work as an opportunity to achieve a combination of three things:
  1. To accomplish a desired mission together in bigger and better ways than one could do alone.
  2. To develop quality relationships that together make for a great community.
  3. To earn money to buy what’s wanted and needed for oneself and others.
     
     The above are mutually supportive. It’s up to each person to decide how much of each they want.