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With $150 billion in assets under management, Bridgewater Associates isn’t just the world’s largest hedge fund. It’s also a company with a quirky and intense culture unique to any industry.
Its policies of “radical truth” and “radical transparency” are based on a collection of lessons, known as “Principles,” written by its founder, chairman, co-CIO, and co-CEO Ray Dalio. At Bridgewater’s Westport, Connecticut offices, its 1,500 employees rate each other’s performance using an iPad app. Most meetings are recorded, via an opt-in audio recorder or camera, to possibly be scrutinized later.
It’s an intense, unusual place that’s not for everyone – 30% of employees leave within their first two years – and Dalio told Business Insider last year that he often found it misrepresented by outsiders. “It can sound mean, crazy, or like a cult to people who don’t know what it’s really like,” he said.
But in a recent interview with BI, Bridgewater co-CIO Bob Prince, who’s been with the firm since 1986, used the metaphor of a basketball game to explain the company’s approach.
“In a basketball game, there’s radical transparency, right? Because you’ve got five players on the court in little short uniforms, and you’ve got a scoreboard, and you’ve got 20,000 people watching, and then you’ve got instant replays, and you’ve got a post-game interview. If you lose the game, A, it’s crystal clear that you lost the game, and B, it’s crystal clear why, and we can pin it to the players on the court and the coach who put him there and so forth.
“On a team, you may see that a three-point shooter might think they’re a rebounder, or that rebounder might think they’re a three-point shooter, but it becomes evident that they’re not. But if you just switch positions, maybe everything’s great.
“The first thing that you have to do to put a team together is you have to know what everybody’s like. What are their strengths? What are their weaknesses? And the real challenge when you have a company is that it’s not as visible as being 7 feet tall versus 5-foot-11. But truly, some people are more creative than others. Some people are more analytical than others. Some people are better at communicating. You have big differences in people – they’re just not as evident as on a basketball team.
“You have to find a way of figuring out what people are like, and a big part of that is each person really has to want to know what they’re like. Because if I’m not open to an objective assessment of what I’m like, it breaks down the whole system. My defensiveness is going to break down that process.”
Therefore, the way Prince sees it, managers and employees shouldn’t be withholding judgment of each other in the office, in the same way they wouldn’t on the court. And because someone’s build and style of play may be more obvious than someone’s thought process and skills, the latter set requires this “radical truth” to unveil it.