Ray Dalio: High Performance by Avoiding Failure

John Cassidy penned a powerful piece for the current issue of the New Yorker titled, Mastering the Machine: How Ray Dalio built the world’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 we’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, we’d learn so much faster.


  1. That echoes points from Adam Connor’s presentation on design critiques at Big Design (Googling for a link on the iPad is a pain so excuse the laziness.)

    It also echoes the design studio techniques being detailed by Will Evans and Jeff Gotthelf.

  2. I cringe at the mention of critique because it is so often a painful, one-way, subjective process, devoid of research. These gentlemen seem to be describing something different which is nice to see.

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