To Get The Cultural Right
1.Trust in truth.
2.Realize that you have nothing to fear from truth.
Understanding, accepting, and knowing how to effectively deal with reality are crucial for achieving success. Having truth on your side is extremely powerful. While the truth itself may be scary—you have a weakness, you have a deadly disease, etc.—knowing the truth will allow you to deal with your situation better. Being truthful, and letting others be truthful with you, allows you to explore your own thoughts and exposes you to the feedback that is essential for your learning. Being truthful is an extension of your freedom to be you; people who are one way on the inside and another on the outside become conflicted and often lose touch with their own values. It’s difficult for them to be happy, and almost impossible for them to be at their best. While the first-order effects of being radically truthful might not be desirable, the second- and third-order effects are great.
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3.Create an environment in which everyone has the right to understand what makes sense and no one has the right to hold a critical opinion without speaking up about it.
4.Be extremely open.
Openness leads to truth and trust. Being open about what you dislike is especially important, because things you don’t like need to be changed or resolved. Discuss your issues until you are in synch or until you understand each other’s positions and can determine what should be done. As someone I worked with once explained, “It’s simple–just don’t filter.” The main reason Bridgewater performs well is that all people here have the power to speak openly and equally and because their views are judged on the merits of what they are saying. Through that extreme openness and a meritocracy of thought, we identify and solve problems better. Since we know we can rely on honesty, we succeed more and we ultimately become closer, and since we succeed and are close, we are more committed to this mission and to each other. It is a self-reinforcing, virtuous cycle.
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5.Have integrity and demand it from others.
Integrity comes from the Latin word integer, meaning “one.” People who are one way on the inside and another way outside lack integrity; they have duality.
The second- and third-order effects of having integrity and avoiding duality are great. Thinking solely about what’s accurate instead of how it is perceived helps you to be more focused on important things. It helps you sort the people you are around and the environments you are in. It improves the organization’s efficiency and camaraderie because the secret things that people think and don't say to each other drive resentment and key issues underground and don’t lead to improvement. Having nothing to hide relieves stress. It also builds trust. For these reasons:
5A. Never say anything about a person you wouldn’t say to them directly, and don’t try people without accusing them to their face.
Badmouthing people behind their backs shows a serious lack of integrity and is counterproductive. It doesn’t yield any beneficial change, and it subverts both the people you are badmouthing and the environment as a whole. Next to being dishonest, it is the worst thing you can do at Bridgewater. Criticism is both welcomed and encouraged at Bridgewater, so there is no good reason to talk behind people’s backs. You need to follow this policy to an extreme degree. For example, managers should not talk about people who work for them without those people being in the room. If you talk behind people’s backs at Bridgewater, you are called a slimy weasel.
5B. Don’t let “loyalty” stand in the way of truth and openness. In some companies, employees hide their employer’s mistakes, and employers do the same in return. In these places, openly expressing your concerns is considered disloyal, and is discouraged. Because it prevents people from bringing their mistakes and weaknesses to the surface and because it encourages deception and eliminates the subordinates’ right of appeal, unhealthy loyalty stands in the way of improvement. I believe in a truer, healthier form of loyalty, which does the opposite. Healthy loyalty fosters improvement through openly addressing mistakes and weaknesses. The more people are open about their challenges, the more helpful others can be. In an environment in which mistakes and weaknesses are dealt with frankly, those who face their challenges have the most admirable character. By contrast, when mistakes and weaknesses are hidden, unhealthy character is legitimized.
6.Be radically transparent.
Provide people with as much exposure as possible to what’s going on around them. Allowing people direct access lets them form their own views and greatly enhances accuracy and the pursuit of truth. Winston Churchill said, “There is no worse course in leadership than to hold out false hopes soon to be swept away.” The candid question-and-answer process allows people to probe your thinking. You can then modify your thinking to get at the best possible answer, reinforcing your confidence that you’re on the best possible path.
6A. Record almost all meetings and share them with all relevant people.
Provide tapes of all meetings that don’t contain confidential information to enhance transparency. Of course, there are some times when privacy is required. If someone gives you confidential information, keep it confidential until you have permission to disclose it.
7.Don’t tolerate dishonesty.
People typically aren’t totally honest, which stands in the way of progress, so don’t tolerate this. There’s an adjustment process at Bridgewater in which one learns to be completely honest and expect the same from others. Increasingly you engage in logical, unemotional discussions in pursuit of truth in which criticisms are not viewed as attacks, but as explorations of possible sources of problems.
- 7A. Don’t believe it when someone caught being dishonest says they have seen the light and will never do that sort of thing again. Chances are they will. The cost of keeping someone around who has been dishonest is likely to be higher than any benefits.
8.CREATE A CULTURE IN WHICH IT IS OK TO MAKE MISTAKES BUT UNACCEPTABLE NOT TO IDENTIFY, ANALYZE, AND LEARN FROM THEM
9.Recognize that effective, innovative thinkers are going to make mistakes and learn from them because it is a natural part of the innovation process.
For every mistake that you learn from you will save thousands of similar mistakes in the future, so, if you treat mistakes as learning opportunities that yield rapid improvements, you should be excited by them. But if you treat them as bad things, you will make yourself and others miserable, and you won’t grow. Your work environment will be marked by petty back-biting and malevolent barbs rather than by a healthy, honest search for truth that leads to evolution and improvement. Because of this, the more mistakes you make and the more quality, honest diagnoses you have, the more rapid your progress will be. That’s not B.S. or just talk. That’s the reality of learning.
10.Do not feel bad about your mistakes or those of others. Love them!
Remember that 1) they are to be expected, 2) they’re the first and most essential part of the learning process, and 3) feeling bad about them will prevent you from getting better. People typically feel bad about mistakes because they think in a short-sighted way that mistakes reflect their badness or because they’re worried about being punished (or not being rewarded). People also tend to get angry at those who make mistakes because in a short-sighted way they focus on the bad outcome rather than the educational, evolutionary process they’re a part of. That’s a real tragedy.
I once had a ski instructor who had taught Michael Jordan, the greatest basketball player of all time, how to ski. He explained that Jordan enjoyed his mistakes and got the most out of them. At the start of high school, Jordan was an unimpressive basketball player; he became a champion because he loved using his mistakes to improve. Yet despite Jordan’s example and the example of countless other successful people, it is far more common for people to allow ego to stand in the way of learning. Perhaps it’s because school learning overemphasizes the value of having the right answers and punishes wrong answers. Good school learners are often bad mistake-based learners because they are bothered by their mistakes. I particularly see this problem in recent graduates from the best colleges, who frequently shy away from exploring their own weaknesses. Remember that intelligent people who are open to recognizing and learning from their weaknesses substantially outperform people with the same abilities who aren’t similarly open.
11.Observe the patterns of mistakes to see if they are a product of weaknesses.
Connect the dots without ego barriers. If there is a pattern of mistakes, it probably signifies a weakness. Everyone has weaknesses. The fastest path to success is to know what they are and how to deal with them so that they don’t stand in your way. Weaknesses are due to deficiencies in learning or deficiencies in abilities. Deficiencies in learning can be rectified over time, though usually not quickly, while deficiencies in abilities are virtually impossible to change. Neither is a meaningful impediment to getting what you want if you accept it as a problem that can be designed around.
12.Do not feel bad about your weaknesses or those of others.
They are opportunities to improve. If you can solve the puzzle of what is causing them, you will get a gem—i.e., the ability to stop making them in the future. Everyone has weaknesses and can benefit from knowing about them. Don’t view explorations of weaknesses as attacks. A person who receives criticism-particularly if he tries to objectively consider if it’s true-is someone to be admired.
13.Don’t worry about looking good-worry about achieving your goals.
Put your insecurities away and get on with achieving your goals.
To test if you are worrying too much about looking good, observe how you feel when you find out you’ve made a mistake or don’t know something. If you find yourself feeling bad, reflect— remind yourself that the most valuable comments are accurate criticisms. Imagine how silly and unproductive it would be if you thought your ski instructor was blaming you when he told you that you fell because you didn’t shift your weight properly. If a criticism is accurate, it is a good thing. You should appreciate it and try to learn from it.
14.Get over “blame” and “credit” and get on with “accurate” and “inaccurate.”
When people hear, “You did XYZ wrong,” they have an instinctual reaction to figure out possible consequences or punishments rather than to try to understand how to improve. Remember that what has happened lies in the past and no longer matters, except as a method for learning how to be better in the future. Create an environment in which people understand that remarks such as “You handled that badly” are meant to be helpful (for the future) rather than punitive (for the past). While people typically feel unhappy about blame and good about credit, that attitude gets everything backwards and can cause major problems. Worrying about “blame” and “credit” or “positive” and “negative” feedback impedes the iterative process essential to learning.
15.Don’t depersonalize mistakes.
Identifying who made mistakes is essential to learning. It is also a test of whether a person will put improvement ahead of ego and whether he will fit into the Bridgewater culture. A common error is to say, “We didn’t handle this well,” rather than, “Harry didn’t handle this well.” This occurs when people are uncomfortable connecting specific mistakes to specific people because of ego sensitivities. This creates dysfunctional and dishonest organizations. Since individuals are the most important building blocks of any organization and since individuals are responsible for the ways things are done, the diagnosis must connect the mistake to the specific individual by name. Someone created the procedure that went wrong, or decided we should act according to that procedure, and ignoring that fact will slow our progress toward successfully dealing with the problem.
16.Write down your weaknesses and the weaknesses of others to help remember and acknowledge them.
It’s unhealthy to hide them because if you hide them, it will slow your progress toward successfully dealing with them. Conversely, if you confront and don’t tolerate them, you will inevitably evolve past them.
17.When you experience pain, remember to reflect.
You can convert the “pain” of seeing your mistakes and weaknesses into pleasure. If there is only one piece of advice I can get you to remember it is this one. Calm yourself down and think about what is causing your psychological pain. Ask other objective, believable parties for their help to figure it out. Find out what is true. Don’t let ego barriers stand in your way. Remember that pains that come from seeing mistakes and weaknesses are “growing pains” that you learn from. Don’t rush through them. Stay in them and explore them because that will help build the foundation for improvement. It is widely recognized that 1) changing your deep-seated, harmful behavior is very difficult yet necessary for improvement and 2) doing this generally requires a deeply felt recognition of the connection between your harmful behavior and the pain it causes. Psychologists call this “hitting bottom.” Embracing your failures is the first step toward genuine improvement; it is also why “confession” precedes forgiveness in many societies. If you keep doing this, you will learn to improve and feel the pleasures of it.
18.Be self-reflective and make sure your people are self-reflective.
This quality differentiates those who evolve fast from those who don’t. When there is pain, the animal instinct is "fight or flight" (i.e., to either strike back or run away) -reflect instead. When you can calm yourself down, thinking about the dilemma that is causing you pain will bring you to a higher level and enlighten you, leading to progress. That is because the pain you are feeling is due to something being at odds-maybe it’s you encountering reality, such as the death of a friend, and not being able to accept it. If when you are calm, you can think clearly about what things are at odds, you will learn more about what reality is like and how to better deal with it. It really will produce progress. If, on the other hand, the pain causes you to tense up, not think, feel sorry for yourself, and blame others, it will be a very bad experience. So, when you are in pain, try to remember: Pain + Reflection = Progress. It’s pretty easy to determine whether a person is reflective or deflective: self-reflective people openly and objectively look at themselves while deflective people don’t.
19.Teach and reinforce the merits of mistake-based learning.
We must bring mistakes into the open and analyze them objectively, so managers need to foster a culture that makes this normal and penalizes suppressing or covering up mistakes. Probably the worst mistake anyone can make at Bridgewater is not facing up to mistakes-i.e., hiding rather than highlighting them. Highlighting them, diagnosing them, thinking about what should be done differently in the future, and then adding that new knowledge to the procedures manual are all essential to our improvement.
- 19A. The most valuable tool we have for this is the issues log (explained fully later), which is aimed at identifying and learning from mistakes. Using this tool is mandatory because we believe that enforcing this behavior is far better than leaving it optional.
20.CONSTANTLY GET IN SYNCH
21.Constantly get in synch about what is true and what to do about it.
Getting in synch helps you achieve better answers through considering alternative viewpoints. It can take the forms of asking, debating, discussing, and teaching how things should be done. Sometimes it is to make our views on our strengths, weaknesses, and values transparent in order to reach the understanding that helps us move forward. Sometimes it is to be clear about who will do what and the game plan for handling responsibilities. So this process can be both a means of finding the best answers and pushing them ahead. Quality conversations about what is true and what should be done will produce better outcomes and many fewer misunderstandings in the future.
22.Talk about “Is it true?” and “Does it make sense?”
In a culture that values both independent thinking and innovation, each individual has both the right and the obligation to ensure that what they do, and what we collectively do, in pursuit of excellence, makes sense to them. So, get in synch about these things.
23.Fight for right.
Discuss or debate important issues with the right relevant parties in an open-minded way until the best answers are determined. This process will maximize learning and mutual understanding. Thrash it out to get to the best answer.
24.Be assertive and open-minded at the same time.
Just try to find out what is true. Don’t try to "win" the argument. Finding out that you are wrong is even more valuable than being right, because you are learning.
24A. Ask yourself whether you have earned the right to have an opinion. Opinions are easy to produce, so bad ones abound. Knowing that you don’t know something is nearly as valuable as knowing it. The worst situation is thinking you know something when you don’t.
24B. Recognize that you always have the right to have and ask questions.
24C. Distinguish open-minded people from closed-minded people. Open-minded people seek to learn by asking questions; they realize that what they know is little in relation to what there is to know and recognize that they might be wrong. Closed-minded people always tell you what they know, even if they know hardly anything about the subject being discussed. They are typically made uncomfortable by being around those who know a lot more about a subject, unlike open-minded people who are thrilled by such company.
24D. Don’t have anything to do with closed-minded, inexperienced people. They won’t do you any good and there’s no helping them until they open their minds, so they will waste your time in the meantime. If you must deal with them, the first thing you have to do is open their minds. Being open-minded is far more important than being bright or smart.
24E. Be wary of the arrogant intellectual who comments from the stands without having played on the field. And avoid that trap yourself.
24F. Watch out for people who think it’s embarrassing not to know. They’re dangerous.
25.Make sure responsible parties are open-minded about the questions and comments of others.
They are required to explain the thinking behind a decision openly and transparently so that all can understand and assess it. Further, in the event of disagreement, an appeal should be made to either the manager’s boss or an agreed-upon, knowledgeable group of others, generally including people more believable than and senior to the decision-maker. The person(s) resolving the dispute must do this objectively and fairly; otherwise our system will fail at maintaining its meritocracy of ideas.
26.Recognize that conflicts are essential for great relationships because they are the means by which people determine whether their principles are aligned and resolve their differences.
I believe that in all relationships, including the most treasured ones, 1) there are principles and values each person has that must be in synch for the relationship to be successful and 2) there must be give and take. I believe there is always a kind of negotiation or debate between people based on principles and mutual consideration. What you learn about each other via that “negotiation” either draws you together or drives you apart. If your principles are aligned and you can work out your differences via a process of give and take, you will draw closer together. If not, you will move apart. It is through such open discussion, especially when it comes to contentious issues, that people can make sure there are no misunderstandings. If that open discussion of differences doesn’t happen on an ongoing basis, the gaps in perspectives will widen until inevitably there is a major clash. Ironically, people who suppress the mini-confrontations for fear of conflict tend to have huge conflicts later, which can lead to separation, precisely because they let minor problems fester. On the other hand, people who address the mini-conflicts head-on in order to straighten things out tend to have the great, long-lasting relationships. That’s why I believe people should feel free to say whatever they really think.
26A.Expect more open-minded disagreements at Bridgewater than at most other firms. They fuel the learning that helps us be at our best. Sometimes when there are disagreements, people get angry. But you should remind them that the management at most other companies doesn’t welcome disagreement or encourage open debate. As a result, there is less of both. So instead of getting angry, they should welcome the fact that disagreements and open debate are encouraged here.
26B.There is giant untapped potential in disagreement, especially if the disagreement is between two or more thoughtful people —yet most people either avoid it or they make it an unproductive fight. That’s tragic.
27.Know when to stop debating and move on to agreeing about what should be done.
I have seen people who agree on the major issues waste hours arguing over details. It’s more important to do big things well than to do small things perfectly. Be wary of bogging down amid minor issues at the expense of time devoted to solidifying important agreements.
27A. However, when people disagree on the importance of debating something, it should be debated. Operating otherwise would essentially give someone (typically the boss) a de facto veto right.
27B. Recognize that “there are many good ways to skin a cat.” Your assessment of how responsible parties are doing their jobs should not be based on whether they’re doing it your way but whether they’re doing it in a good way.
27C. For disagreements to have a positive effect, people evaluating an individual decision or decision-maker must view the issue within a broader context. For example, if the responsible party being challenged has a vision, and the decision under disagreement involves a small detail, evaluate the decision within the context of the broader vision. The ensuing discussion resulting from challenging someone’s decision will help people understand all the considerations behind it.
27D. Distinguish between 1) idle complaints and 2) complaints that are meant to lead to improvement.
28.Appreciate that open debate is not meant to create rule by referendum.
It is meant to provide the decision-maker with alternative perspectives in anticipation of a better answer. It can also be used to enhance understanding of others’ views and abilities and, over time, assess whether someone should be assigned a responsibility. It doesn’t mean there can’t be some designs in which a group oversees a person. But that’s designed and embedded in the organizational structure, specifying the people responsible for oversight who are chosen because of their knowledge and judgment.
29.Evaluate whether an issue calls for debate, discussion, or teaching.
Debate, discussion, and teaching are all ways of getting in synch, but they work differently and the approach you choose should reflect your goal and the relative believability of the people involved. Debate is generally among approximate equals; discussion is open-minded exploration among people of various levels of understanding; and teaching is between people of different levels of understanding.
29A. ETo avoid confusion, make clear which kind of conversation (debate, discussion, or teaching) you are having and recognize that the purpose is ultimately to get at truth, not to prove that someone is right or wrong.
29B. Communication aimed at getting the best answer should involve the most relevant people. Not everyone should randomly probe everyone else, because that’s an unproductive waste of time. People should consider their own levels of believability and understanding to assess if the probing makes sense. As a guide, the most relevant people are your managers, direct reports, and/or agreed experts. They are the most impacted by and most informed about the issues under discussion, and so they are the most important parties to be in synch with. If you can’t get in synch, you should escalate the disagreement.
29C. Communication aimed at educating or boosting cohesion should involve a broader set of people than would be needed if the aim were just getting the best answer.
Less experienced, less believable people will be included. They may not be necessary to decide an issue, but if you aren’t in synch with them, that lack of understanding will likely undermine morale and the organization’s efficiency. In cases where you have people who are both not believable and highly opinionated (the worst combination), you will drive their uninformed opinions underground if you don’t get in synch. Conversely, if you are willing to be challenged, and others behave the same way, you can demand that all critical communication be done openly.
Imagine if a group of us were trying to learn how to play golf with Tiger Woods, and he and a new golfer were debating how to swing the club. Would it be helpful or harmful to our progress to ignore their different track records and experience? Of course it would be harmful and plain silly to treat their points of view equally, because they have different levels of believability. It is better to listen to what Tiger Woods has to say, without constant interruptions by some know-nothing arguing with him. While I believe this is true, it would be most productive if Tiger Woods gave his instructions and then answered questions. However, because I’m pretty extreme in believing that it is important to obtain understanding rather than accepting doctrine at face value, I also think the new golfer shouldn’t accept what Tiger Woods has to say as right only because he has won loads of tournaments and has years of experience playing golf. In other words, I believe the new golfer shouldn’t stop questioning Tiger until he is confident he has found truth. At the same time, I also think the new golfer would be pretty dumb and arrogant to believe he’s probably right and the champion golfer is wrong. So he should approach his questioning with that perspective rather than overblown confidence. It would be really bad for the group’s learning if all the people in the group treated what the new golfer and Tiger Woods had to say as equally valuable. I feel exactly the same way about getting at truth at Bridgewater. While it’s good to be open-minded and questioning, it’s dumb to treat the views of people with great track records and experience the same as those without track records and experience.
29D. Leverage your communication. While open communication is very important, the challenge is figuring out how to do it in a time-efficient way. It is helpful to use leveraging techniques like open e-mails posted on a FAQ board. If the reporting ratios are organized as described in the principles on organizational design, there should be ample time for this. The challenges become greater the higher you go in the reporting hierarchy because the number of people affected by your actions and who have opinions and/or questions grows larger than just two reporting levels down. In such cases, you will need even greater leverage and prioritization (e.g., having some of the questions answered by a well-equipped party who works for you, asking people to prioritize their questions by urgency or importance, etc.).
30.Don’t treat all opinions as equally valuable.
Almost everyone has an opinion, but many are worthless or harmful. The views of people without track records are not equal to the views of people with strong track records. Treating all people equally is more likely to lead away from truth than toward it. People without records of success who are nonetheless confident about how things should be done are either naïve or arrogant. In either case, they’re potentially dangerous to themselves and others. However, all views should be considered in an open-minded way, albeit placed in the proper context of experience and track record. Ultimately, the proof is in the pudding: can you handle your responsibilities well? As a general rule, if you can, then you can have an opinion of how to do it—if you can’t, you can’t.
30.A hierarchy of merit is not only consistent with a meritocracy of ideas but essential for it.
Not only is better decision-making enhanced, so is time management. It’s not possible for everyone to debate everything all the time and still get work done effectively.
31.Consider your own and others’ “believabilities.”
By believability, I mean the probability that a person’s view will be right. While we can never know this precisely, we can roughly assess it according to the quality of a person’s reasoning and their track record. Of course, different people will have different views of their own and other’s believability, which is fine. Just recognize that this is a reality that is relevant in a number of ways. Ask, “Why should I believe you?” and “Why should I believe myself?”
31A. Ask yourself whether you have earned the right to have an opinion. As a general rule, if you have a demonstrated track record, then you can have an opinion of how to do it—if you don’t, you can’t, though you can have theories and questions.
31B. People who have repeatedly and successfully accomplished the thing in question and have great explanations when probed are most believable. Those with one of those two qualities are somewhat believable; people with neither are least believable.
At the same time, people’s ideas should always be assessed on their merit in order to encourage them to always think in an open-minded way. I have seen that inexperienced people can have great ideas, sometimes far better than more experienced people, though often much worse. So we must be attuned to both the good and the bad and allow people to build their own track records and their own levels of believability. Because of Bridgewater’s radical openness, you can see how we make our assessments of that.
Someone new who doesn’t know much, has little believability, or isn’t confident in his views should ask questions. On the other hand, a highly believable person with experience and a good track record who is highly confident in his views should be assertive. Everyone should be upfront in expressing how confident they are in their thoughts. A suggestion should be called a suggestion; a firmly held conviction should be presented as such. Don’t make the mistake of being a dumb shit with a confident opinion.
31C. If someone asks you a question, think first whether you’re the responsible party/right person to be answering the question.
32.Spend lavishly on the time and energy you devote to “getting in synch” because it’s the best investment you can make.
You will inevitably need to prioritize because of time constraints, but beware of the tremendous price of skimping on quality communication.
33.If it is your meeting to run, manage the conversation.
There are many reasons why meetings go poorly, but frequently it is because of a lack of clarity about the topic or the level at which things are being discussed (e.g., the principle/machine level, the case-at-hand level, or the specific-fact level). To manage the meetings well:
33A. Make it clear who the meeting is meant to serve and who is directing the meeting. Every meeting is for the purpose of meeting someone’s goals; that person is the responsible party for the meeting and decides what s/he wants to get out of it and how s/he will do so. Meetings without a clear responsible party run a high risk of being directionless and unproductive.
33B. Make clear what type of communication you are going to have in light of the objectives and priorities. For example, if the goal of the meeting is to have people with different opinions work through their differences to try to get closer to what is true and what to do about it (i.e., open-minded debate), you will run it differently than if the meeting is meant to educate. Debating issues takes time. That time increases geometrically depending on the number of people participating in the discussion, so you have to carefully choose the right people in the right numbers to suit the decision that needs to be made. In any discussion try to limit the participation to those whom you value most in light of your objectives. The worst way to pick people is based on whether their conclusions align with yours.
33C. Lead the discussion by being assertive and open-minded. Group-think and solo-think are both dangerous.
33D. A small group (3 to 5) of smart, conceptual people seeking the right answers in an open-minded way will generally lead to the best answer. Next best is to have decisions made by a single smart, conceptual decision-maker, but this is a much worse choice than the former. The worst way to make decisions is via large groups without a smart, conceptual leader. Almost everyone thinks they’re smart and conceptual, but only a small percentage of any group really is. Even when there is a large number of smart, conceptual leaders, more than five trying to make a decision is very inefficient and difficult. This is especially the case when people think they need to satisfy everyone.
33E. 1+1=3.
Two people who collaborate well will be about three times as effective as the two of them operating independently because they will see what the other might miss, they can leverage each other, and they can hold each other to higher standards. This symbiotic relationship of adding people to a group will have incremental benefits (2+1=4.25) up to a point at which there are no incremental gains and beyond which adding people produces incremental losses in effectiveness. That is because 1) the marginal benefits diminish as the group gets larger-e.g., two or three people might be able to cover most of the important perspectives so adding more people doesn't bring much more, and 2) larger group interactions are less efficient than smaller group interactions. Of course, what's best in practice is a function of 1) the quality of the people and the differences of the perspectives that they bring and 2) how well the group is managed. As noted before, each group should have someone who is responsible for managing the flow to get out of the meeting the most possible.
33F. Navigate the levels of the conversation clearly. When considering an issue or situation, there should be two levels of discussion: the case at hand and the relevant principles that help you decide how the machine should work. Since the case at hand is a manifestation of one or more relevant principles, you need to clearly navigate between these levels in order to 1) handle the case well, 2) improve the machine so that cases like this will be handled better in the future, and 3) test the effectiveness of your principles.
33G. Watch out for “topic slip.” Topic slip is the random and inconclusive drifting from topic to topic without achieving completion. Tip: Avoid topic slip by tracking the conversation on a whiteboard so everyone can see where you are.
33H. Enforce the logic of conversations. There is a tendency for people’s emotions to heat up when there is a disagreement, so focusing on the logic of your exchange will facilitate communication. If you are calm and analytical in listening to others’ points of view, it is more difficult for them to shut down a logical exchange than if you get emotional or allow them to get emotional.
33I. Worry about substance more than style. This is not to say that some styles aren’t more effective than others with different people and in different circumstances, but don’t let style or tone prevent you from getting in synch. I often see people complain about the delivery of a criticism in order to deflect from its substance. If you think someone’s style is an issue, box it as a separate issue to get in synch about (start by asking whether it’s true and whether it’s important).
33J. EAchieve completion in conversations. The main purpose of discussion is to achieve completion and get in synch, which leads to decisions and/or actions. Conversations often fail to reach completion. This amounts to a waste of time because they don’t result in conclusions or productive actions. When there is an exchange of ideas, especially if there is a disagreement, it is important to end it by stating the conclusions. If there is agreement, say it; if not, say that. Where further action has been decided, get those tasks on a to-do list, assign people to do them, and specify due dates. Write down your conclusions, working theories, and to-do’s in places that will lead to their being used as foundations for continued progress.
33K. Have someone assigned to maintain notes in meetings and make sure follow-through happens. Generally speaking, to avoid distraction during the discussion itself, prioritizing follow-ups and assignments should be done afterwards.
33L. Be careful not to lose personal responsibility via group decision-making. Too often groups will make a decision to do something without assigning personal responsibilities so it is not clear who is supposed to do what. Be clear in assigning personal responsibilities.
34.Make sure people don’t confuse their right to complain, give advice, and debate with the right to make decisions.
Discussion does not mean rule by referendum. While our culture is marked by extreme openness, some people mistakenly assume we have group decision-making in which all views are treated equally and consensus rules. Since not all views are equally valuable, I don’t believe in consensus decision-making or referendums. We operate not only by open debate but also by clearly assigning personal responsibility to specific people. While these two values might seem at odds, personal responsibility and open debate work together to synthesize effective decision-making at Bridgewater. Everyone does not report to everyone here. Instead, responsibility and authority are assigned to individuals based on our assessment of their ability to handle them. I want the most capable individuals assigned to each job. We hold them accountable for their outcomes, but we also give them the authority to achieve those outcomes. It is perfectly OK for a responsible party to carry through a decision he thinks is best even when others who are knowledgeable disagree, although this disagreement should be considered and weighed seriously. We have, and should have, an explicit decision-making hierarchy, ideally based on merit.
35.Recognize that getting in synch is a two-way responsibility.
In any conversation there is a responsibility to transmit and a responsibility to receive. Misinterpretations are going to take place. Often, difficulty in communication is due to people having different ways of thinking (e.g., left-brained thinkers talking to right-brained thinkers). The parties involved should 1) realize that what they might be transmitting or receiving might not be what was meant, 2) consider multiple possibilities, and 3) do a back and forth so that they can get in synch. People do the opposite—confidently thinking that they’ve communicated their intent clearly, not considering multiple possibilities and then blaming the other parties for the misunderstanding. Learn lessons from your problems in communications to improve.
36.Escalate if you can’t get in synch.
If you can’t understand or reconcile points of view with someone else, agree on a third party to provide guidance. This person could be your manager or another agreed-upon, believable person or group who can resolve the conflict objectively, fairly, and sensibly. This mechanism is a key element of our culture and crucial for maintaining a meritocracy of ideas.