John Cassidy penned a powerful piece for the current issue of the New Yorker titled, Mastering the Machine: How Ray Dalio built the worldâ€™s richest and strangest hedge fund. Part of Dalio’s success in creating massive financial returns while controlling risk stems from his financial wisdom, but the success of his 1000-person organization that runs their three funds has been attributed to how he’s created a culture of “truth and transparency” which helps them (among other things) avoid and learn from failure.
My summary of the key characteristics as described in the article:
- Discussing issues by citing evidence and experience rather than mere educated guesses
- Expressing opinions in a transparent way, and giving forthright feedback to anyone else in the organization
- Removing the emotional reaction to mistakes so people understand clearly why they happened and can logically discuss how to avoid them next time
And one quote from Dalio:
What weâ€™re trying to have is a place where there are no ego barriers, no emotional reactions to mistakes…. If we could eliminate all those reactions, weâ€™d learn so much faster.