I've been having a bit of a man crush on Ray Dalio lately. He's one of the 100 wealthiest people in the world and also one of the most successful investors ever. Impressively, his team at Bridgewater Associates predicted the 2008 housing bubble and recession.
But what really impresses me most are the leadership qualities he talks about in his book Principles: Life and Work. It turns out he runs kind of an oddball operation at his wildly successful hedge fund, so much so that some call it a cult.
To my mind though that's just a bunch of talk. He runs an organization really well, and so there's a lot we can learn. Here are some of the most interesting and unconventional insights to success, straight from Dalio.
He's learned a lot from his own failures.
People are always told to make adjustments based on what they learn from failure. Most of us don't change much--but Dalio did.
In 1993, he got a performance assessment as a chairman of Bridgewater that described his interactions with employees as negative. It said that he made workers feel "incompetent, unnecessary, humiliated, overwhelmed, belittled, pressed, or otherwise bad."
The memo urged Dalio to improve his management skills for the sake of the company. It was a turning point for him mentally. Much of this piece describes what he's done as a result of this self-reflection.
Be totally honest to everyone.
Dalio now stresses the importance of establishing relationships of openness, honesty, and trust with employees. In the more than 500 pages of Principles, he preaches for higher-ups to embrace constructive criticism, and to use blunt and honest critiques to grow.
Dalio asks that employees take similar honest criticism as an opportunity to improve. Many who have passed through Bridgewater criticize this arrangement, saying that workers haven't always felt heard when they voice their criticism.
Despite that, I think it's fascinating that someone as powerful as Dalio is making honesty a two-way street. Certainly many entrepreneurs could learn a thing or two by injecting more of it into their company cultures.
Talking 'tough love.'
In order to make honesty more of a two-way street, you have to have "tough love."
Dalio encourages all employees to have healthy senses of humility, and to make changes internally in response to criticism. "Tough love" shouldn't be strict or emotionless. It should build a culture of introspection and self-improvement.
He advocates putting your genuine thoughts on the table and discussing them so that nobody is secretly mad at each other.
It's okay to make mistakes.
Despite advocating blunt honesty, Dalio doesn't harshly penalize employees for making mistakes. On the contrary, he says they're teaching opportunities.
The eighth of Dalio's principles says it's ok to make mistakes, but not okay to fail to learn from them. He recognizes that "effective, innovative thinkers are going to make mistakes," and believes they are part of the creative process.
Embrace open-minded disagreements.
The 20th principle says to "constantly get in synch about what is true."
Dalio says the key is open communication in the workplace. Everyone always has the right to ask questions, but you have to earn the right to have an opinion.
He says to be open-minded yet assertive at the same time and embrace the concerns of others. He encourages open-minded disagreements at work, especially when between "two or more thoughtful people."
Don't ignore your own flaws.
There is a consistent message about self-reflection in these principles. In a competitive age of wanting to do better than everyone else, it can be hard to swallow your pride and examine your flaws. Yet this is exactly what Dalio says to do if you want success.
Self-reflection is key for everyone, even higher-ups. It's a highly beneficial way for people to recognize when to make changes, in themselves or others.
Recognize different people are built differently.
Dalio is a believer in embracing differences between people. Everyone brings unique values, beliefs, and abilities. The only way to know what to expect from an employee is to get to know them.
He encourages employers to use personality assessment tests with employees to identify differences. Recognizing these differences is the key to assigning the right people to the right responsibilities, and encouraging employees to explore unique paths.
It's true that not everyone likes Dalio's ideas. There are plenty of organizations with a much more top-down structure. Often it's necessary, depending on the business.
However, there's a lot of emotional intelligence to what Dalio is preaching. When you let workers express themselves more, and they know you actually listen, that can result in all kinds of benefits, from longer employee tenure to higher quality effort. If you take these keys to success to heart, you may just transform your enterprise.