Giving constructive criticism is one thing, but telling your boss that they're doing a terrible job at communicating is on a whole other level. But, that's what some workers did to Bridgewater Associates then-head Ray Dalio back in 1993.

As detailed in a recent Business Insider article, three employees took him out to dinner and gave him a memo from all of the employees at the hedge fund that said:

"Ray sometimes says or does things to employees which makes them feel incompetent, unnecessary, humiliated, overwhelmed, belittled, oppressed, or otherwise bad. The odds of this happening rise when Ray is under stress... The impact of this is that people are demotivated rather than motivated."

To be fair, the employees also outlined the positive: "He has good intentions about teamwork, building group ownership, providing flexible work conditions to employees, and compensating people well."

A bit of a gut-punch for Dalio, the memo made him sit up and take notice of exactly how his behavior was affecting the people who worked for him.

His response? Change the corporate culture.

What got him into trouble with his employees was his leadership style of so-called "radical truthfulness," which can be summarized as being brutally honest at all times regardless of people's feelings.

While this can work as a leadership style, what Dalio found was that it can only work if everybody gets to be radically truthful instead of just the boss.

So, he and his managers found a way to extend radical truthfulness to everybody in the company, which allowed everyone to present their issues up front so they could all work through them.

Communication Roadblock

My own moment of communication failure happened back when my and my wife's first company was only 15-people strong. I had hired someone who I thought was a good first lieutenant, but after a few years of stagnation for the company, I had to let that person go.

Once I did that, the floodgates opened.

The rest of my staff started coming up to me and talking freely and I realized that I had been living in a bubble for the past few years created largely by the fact that my second in command -- who I relied on for my information about the company -- had been giving me a false picture of everything. It turns out most of the staff were unhappy and considering leaving, which I knew nothing about.

Once I started getting a true picture of how things were at the company, I took steps to change the culture and make sure I was more involved. Basically, it was my moment of transitioning from manager to leader. I had to lead myself to change before I could actually lead the company.

Principles

As for Dalio, he and his team developed a set of principles to address communication in the workplace that involved:

  • Everyone putting their honest thoughts on the table.

  • Having thoughtful disagreements and being open to shifting opinions while learning.

  • Having agreed-upon ways of moving beyond disagreements that cannot be resolved so that the parties do not feel resentment for each other.

He later included these in his best-selling book Principles: Life and Work, which he has recently turned into an interactive app.

Here are three reasons why Dalio's strategy is brilliant and how you can use it for your own business.

1. Clear communication means office politics can be managed easier.

You'll never be able to avoid the dreaded office politics, but you can help make them less harmful if everything is out in the open. Instead of secrets and cliques, you can have open dialogue and collaboration among your team.

Honesty should be a part of your corporate culture. To expect honesty and clear communication, you have to give it. When you do, you can demand honesty and your words will have more impact.

2. Disagreeing is healthy.

By acknowledging and talking about disagreements, you allow your team to grow and evolve. If everyone agrees (or pretends to agree) you end up with hive thinking and that can be dangerous for a company.

As a leader, one of your most important tasks is to find and use diverse viewpoints -- and even disagreement -- to your advantage. You should not finish a meeting until you are sure that everyone who has something to say has had a chance to say it, even -- and especially -- if somebody has a different opinion. This will allow you to see situations from different perspectives and get those all important dissenting viewpoints.

3. Things don't always need to be resolved.

Sometimes people just aren't going to agree on something and that is fine. If it is not disruptive to the company, just agree to disagree and move on. Your time is much more important than coming to some kind of closure on a subject.