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Honest policy

Now most times, when someone comes up and says, “Hey give me your honest feedback on my performance / speech / act / article”, the person on the other side becomes fairly guarded. Should they speak the truth and risk losing an important relationship? Or do they just continue to parade the emperor with no clothes?

This may not matter much in the larger scheme of things in the personal realm. But honesty / transparency are hugely important for company culture. Whether to customers, between employees and management, to shareholders or other stakeholders – admitting mistakes without worry of being censured and the ability to speak freely is quite a superpower. 

The example of Bridgewater Associates, run by Ray Dalio comes to mind. Dalio released some candid feedback he received from one of his employees. “Ray – you deserve a “D-” for your performance today in the meeting. You did not prepare at all because there is no way you could have and still been that disorganized. In the future, I/we would ask you to take some time and prepare and maybe even I should come up and start talking to you to get you warmed up or something but we can’t let this happen again. If you in any way think my view is wrong, please ask the others or we can talk about it.”

And that’s exactly what Mr. Dalio did. He asked the rest of the people in that meeting to rate him on a scale of A to F. Let’s just say the result was closer to F than to A. He immediately published the result for his entire employee base of >2000 people to see.

This is debilitating and extreme honesty to be a recipient of. But its unique culture has been instrumental in helping Bridgewater build itself into one of the world’s largest hedge funds, persisting for over 45 years – when the average life of a hedge fund is only 5 years.

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