Bridgewater Associates Hedge Fund is bringing its culture of “radical transparency" to Silicon Valley.....
HEDGE-FUND GURU RAY DALIO IS BRINGING HIS “CULT” TO SILICON VALLEY
Bridgewater’s nightmarish management philosophy is headed west.
BY BESS LEVIN SEPTEMBER 18, 2017 11:54 AM
Bridgewater Associates, the multi-billion dollar hedge fund founded by Ray Dalio, has prospered thanks to a singularly unorthodox culture of “radical transparency,” a management philosophy that Dalio has enshrined in a 123-page manifesto called “Principles.” Or Bridgewater may have prospered in spite of it; it all depends on whom you ask. Soon, however, we may finally have an answer to the mystery that has long hung over the world’s largest hedge fund. Dalio believes so strongly in his “Principles” that he is pulling back the curtain of secrecy and sharing it with the world. Think the Bridgewater Way might be right for your team? Ahead of the release of the Principles book later this month, consider a taste of what life is like at the Westport, Connecticut, investment firm:
Employees are required to promote “radical truth” and “radical transparency” in everything they do, including sharing blunt assessments of their colleagues’ behavior, performance, and personality. Failure to do so is taken extraordinarily seriously: one senior executive was subjected to a series of interrogations by then general counsel James Comey over whether she had lied about typing an e-mail versus merely dictating it.
There is a three-week Principles bootcamp for new hires who, throughout their time at the firm, are assigned a “weekly quota of homework that includes watching case studies and answering how they would solve a problem based on the rules.” One employee who failed to complete the task was fired by Dalio in a firm-wide e-mail. Dalio later claimed he was just trying to “shake things up.”
Employees “rate” their colleagues on 75 different attributes 15 times a week to generate “baseball cards” that show “how much their views can be trusted.” All meetings are recorded, archived, and made available for others to view later so they can point out what their colleagues did wrong. Perhaps not coincidentally, people often cry in the bathrooms. Twenty percent of new hires leave within the first year.
There is a ritual called “public hangings,” wherein employees are taken to task in front of their co-workers. A Harvard Business School case study of one of these “hangings” includes a video of a meeting that involves a “Maoist-like struggle session where a young male employee was berated by a group of peers and superiors for not being good enough.” At the end of the video, the man fires himself.
Some academics have praised Dalio’s method. Others call it a “cauldron of fear and intimidation.” At least one former executive has gone as far as to describe Bridgewater as a “cult,” recalling a colleague who couldn’t sleep at night and would throw up before meetings with Dalio. Which, in a weird way, makes Principles the perfect fit for Silicon Valley, where fear, utopian management philosophies, harassment, aggression, and cults of personality are the norm.
This being the year 2017, Dalio has recently turned his management system into a number of apps, Bloomberg reports, like “the Dot Collector, which employees use to rate one another on a grid visible to the entire firm; the Pain Button, used to record emotions like anger or frustration; and Baseball Cards, a summary of each employee’s strengths and weaknesses—again, available for all at Bridgewater to see.”
Naturally, Dalio has already sold them on it. Per Bloomberg:
“We’re about to take the algorithms we have, and we’re going to give them to others,” Dalio said in an interview with Bloomberg Television. “We’re figuring out how to make that fit in a number of other companies, to just pass it along.” [. . .] Several large technology companies in Silicon Valley are eager to implement his ideas, said Dalio. He declined to name them and estimated the first roll-out is at least 18 months away. “In Silicon Valley there’s more of that notion that there’s a power in crowd-sourced decision-making and that it is idea-meritocratic,” said Dalio. “Traditional organizations are more challenged by that.”