Opinion: Ray Dalio and the way Bridgewater Associates operates | Wall Street Financier: Notes from High Altitude©

If you’re not familiar with a WSJ article on Bridgewater Associates (BA) culture, click the link. Today, Henry Blodget of Business Insider published a Q&A interview with Ray Dalio which represents Dalio’s rebuttal to the earlier Journal report. I’ll comment on BA’s self described “idea meritocratic way” and Dalio’s apparent critique of the original report.

I thought Bradley Hope’s and Rob Copeland’s WSJ report was fair, informative, judiciously researched and well put together. Of course, Dalio is struggling with having to organize a bureaucracy of 1500 or so employees and his problems are not unique but very much common.

The WSJ piece is good journalism that does not deserve criticism as “biased news”. Here are my observations on Dalio’s Q&A and the way he described operating at BA :

1. Peoples management should not be the employee focus. While the “culture of radical transparency” is a seductive idea, spending time reviewing co-worker and personnel files is a waste of time for employees that work outside HR and that are not your immediate supervisor.

2. The letter where the employee wrote “I love you Ray” is not the letter he should have quoted in the interview.

3. Ray has some 210 Principles laid out into three sections -it is good to have a layout, a structure. I will discuss those in greater detail when I have some more time, but I already have a problem with “Don’t pick your battles’. Fight them all.” I think Dalio is trying to engender himself into Eastern philosophy. My opinion, as a strategist, is that you need to pick your battles so that you don’t expend energy needlessly. Examples: What do you win if you fight a fool ? Or do you go into a battle with an adversary that’s bigger and stronger than you ? I think fighting other peoples battles is a foolish way to live.

See also Playing bridge with the media

4. Let’s suppose Ray has this idea to get everyone on the TM (Transcendental Meditation) train, and offers the course for free (it was around $1000 when I took it years ago), so that folks don’t even have to pay for it. We know Ray practices and values that practice. Substitute for meditation with anything else, say, fencing, anyone ? that is deemed “beneficial” by management. What you will have is some folks hopping in for fear of not standing out. Someone might get criticized at the next video meeting. “How was TM ? Oh, well, not for me.” Ummhh -wrong answer. Two points down. My point is the hunt for points (pun indented, BA has the points score system) doesn’t necessarily create better people despite its best intentions.

5. The “idea meritocratic way” is not a fail-proof method. In a large organization there will inevitably be better employees and weaker ones riding the coattails. People are not supposed to be static. What I mean is BA should administer their personality and skills tests repeatedly, so that they can hopefully see shifts, next year, or next quarter, etc.

6. BA is using big data trying to homogenize its employee population. That’s not unique to them, It’s been seen and done in most large organizations.

7. Blodget missed to ask a very important question, which is how do Ex-Bridgewater employees fare after they leave. How successful are they ? How good are they when they open their own shops ? Answering that gives a better picture on how effective BA’s ops manual is.

See also Ray Dalio's Principles

8. Dalio dodged the question Blodget asked on what he thought about Trump not accepting what some journalists write about him. “journalists…they try to write the truth in a fair way, and our President Elect, Donald Trump, doesn’t like it or believe it. Have they done their job?” Dalio goes on rambling about how “the President must operate by rules…, if you pull rank, you lose all credibility, etc.”. On this blog I wrote how Trump became the President of the United States by not playing by the rules. Also, we learned though the journalistic work at the Washington Post that Trump might have had a role model earlier in life, a shyster by the name of Ray Cohn.

9. It is not the job of the one that’s interviewed to figure out the mindset of the person who’s interviewing him. Why expend energy unnecessary ?

10. So is it See you Ray at the World Economic Forum in Davos this month ? Probably not. Also, for those of you that are looking for jobs at BA it’s fair to say your chances are very close to none, since the firm has an internal hiring priority process system (as have many in the industry).