Reports from former employees have suggested a workplace rife with accusations, confrontations, and interrogations. There was, for example, an episode in which “former COO Hope Woodhouse was shredded in front of the management committee and the sessions were sent out to the company to learn from (she was brought to the point of crying in the recording).” Implementation of the Principles is just about as Orwellian as you might expect:
Two dozen Principles “captains” are responsible for enforcing the rules. Another group, “overseers,” [bit of an unfortunate choice of title, no?] some of whom report to Mr. Dalio, monitor department heads. The video cameras that record daily interactions for future case studies are so ubiquitous that employees joke about “the men in the walls.” … Each day, employees are tested and graded on their knowledge of the Principles. They walk around with iPads loaded with the rules and an interactive rating system called “dots” to evaluate peers and supervisors. The ratings feed into each employee’s permanent record, called the “baseball card.”
Dalio tells readers that they need to get over their mushy, sentimental reactions, and embrace radical truth for the sake of the common good. He gives the example of a wildebeest being eaten alive, witnessed on one of his many hunting trips, in order to show that what appears to be horrific suffering might actually be “wonderful”:
When I went to Africa a number of years ago, I saw a pack of hyenas take down a young wildebeest. My reaction was visceral. I felt empathy for the wildebeest and thought that what I had witnessed was horrible. But was that because it was horrible or was it because I am biased to believe it’s horrible when it is actually wonderful? That got me thinking. Would the world be a better or worse place if what I’d seen hadn’t occurred?… I could see that the world would be worse. I now realize that nature optimizes for the whole, not the individual, but most people judge good and bad based only on how it affects them. … Most people call something bad if it is bad for them or bad for those they empathize with, ignoring the greater good.
Matt Levine of Bloomberg, who has observed Bridgewater for quite some time, has said that the company never seems to offer any real substantiation for the link between management culture and the high investment returns:
Does Bridgewater ever analyze whether its culture of constant self-examination and radical transparency is actually good for its investing? … [In Bridgewater’s self-descriptions] it’s never “our culture of constantly rating each other on iPad apps leads to better investment returns,” always “our culture of constantly rating each other on iPad apps leads to better ratings on the iPad apps.”… I am always left with the sense that the group therapy is the point, that the investor returns are a happy accident that subsidize all the introspection, and that Bridgewater is an odd little eddy in financial capitalism that uses investor money to fund the pursuit of personal enlightenment… I have joked before that Bridgewater’s business model is that it has a computer that does its investing, and that the computer uses the personal-rating games to distract the human employees so they don’t interfere with the investment process. If you spend all your meetings debating what the meetings should be about, then sure, you’re probably not going to have time to monkey with the investment algorithms.
An alternative perspective from Current Affairs: “How To Make Everyone In Your Vicinity Secretly Fear And Despise You”.
The entire article is worth reading.