Ray Dalio On His Three Favorite Books

Ray Dalio On His Three Favorite Books
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Ray Dalio of Bridgewater Associates on his top books – An Everyone Culture: Becoming a Deliberately Developmental OrganizationOriginals: How Non-Conformists Move the World and Learn or Die by Edward Hess

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An Everyone Culture

Robert Kegan, Ph.D., and Lisa Lahey, Ed.D., are professors at Harvard’s Graduate School of Education, where they have also served as the co-director and associate director of the Change Leadership Group. In addition to their work on adult development, their recent research focuses on Deliberately Development Organizations (or DDOs), which they describe as “the most powerful settings in the world we have found for developing people’s capabilities.” Kegan and Lahey approached Bridgewater about studying our culture, and we gave them access to live meetings, recorded meetings, and dozens of employees at all levels to interview. The results of their study are written up in An Everyone Culture: Becoming a Deliberately Developmental Organization. While we recommend the book in its entirety, what follows below are a few relevant excerpts:

Ray Dalio

Ray Dalio on what it means to be a Deliberately Developmental Organization like Bridgewater:

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“Imagine finding yourself in a trustworthy environment, one that tolerates—even prefers—making your weaknesses public so that your colleagues can support you in the process of overcoming them. . .You’re imagining an organization that, through its culture, is an incubator or accelerator of people’s growth.”

“A DDO enables people to uncover and value their growing edge, and experience themselves as still valuable even as they are screwing up—and they can potentially be even more valuable if they can overcome the limitations they are exposing.”

“The companies have come up with novel and effective means to meet a host of challenges—how to increase retention, profitability, coaching support, readiness to learn, speed to promotability, frankness in communication, effective delegation, effective downsizing, acceptance of responsibility; how to reduce political maneuvering, impression management, behind-the-back disparagement, downtime, and disengagement; how to anticipate crises no one in the company has experienced and manage successfully through them; how to invent future possibilities no one has experienced and realize them. ….. This is what we believe [this type of organization] to be: the jet engine culture for meeting adaptive challenges when most organizations are still flying a prop plane.”

On Bridgewater’s culture and principles specifically:

“Bridgewater stands for the pursuit of what is true, no matter how inconvenient, both as a business necessity in the financial markets and as a path for personal evolution and cultural integrity.”

“At Bridgewater, learning from one’s mistakes is a job requirement… Bridgewater destigmatizes (and even celebrates) making mistakes. More than that, it treats the ongoing, often painful experience of one’s imperfections as valuable data for learning rather than unproductive blame.”


Adam Grant, Ph.D., is the top rated professor at the Wharton School of the University of Pennsylvania. While studying the differences between conformity and originality and how they can influence a company, Adam became interested in Bridgewater and contacted us. We invited him to learn about our culture and what makes us unique through interviews and by reviewing case studies and other tapes of Bridgewater meetings. You can read the results of his study in Originals: How Non-Conformists Move the World, which Adam describes as being about “taking the road less traveled, championing a new set of novel ideas that go against the grain but ultimately make things better.” The book was a critically-acclaimed #1 New York Times bestseller. A few relevant excerpts are below:

Ray Dalio on Bridgewater's culture:

“When I polled executives and students about the strongest culture they had ever encountered in an organization, the landslide winner was Bridgewater Associates.”

“Although there’s always a lot of debate, Bridgewater is a highly cohesive, close-knit community, to the point that its staff frequently call it a family, and it’s common for employees to stay for decades.”

Ray Dalio on promoting independent thinking in an idea meritocracy:

“In the investment world, you can only make money if you think different from everyone else. Bridgewater has prevented groupthink by inviting dissenting opinions from every employee in the company. When employees share independent viewpoints instead of conforming to the majority, there’s a much higher chance that Bridgewater will make investment decisions no one else has considered and recognize financial trends no one else has discerned. That makes it possible to be right when the rest of the market is wrong.”

“At Bridgewater, employees are expected to challenge the principles themselves. During training, when employees learn the principles, they’re constantly asked: Do you agree? … Rather than deferring to the people with the greatest seniority or status . . . decisions at Bridgewater are based on quality. The goal is to create an idea meritocracy, where the best ideas win. To get the best ideas on the table in the first place, you need radical transparency.”

“Dalio can be confident that members of his staff won’t feel pressured to nod and smile whenever he presents an opinion; his whole team will be radically transparent in challenging his assumptions about markets, and they’ll be the same with one another. Decisions will be made based on an idea meritocracy, not a status hierarchy or democracy.”

Edward Hess, L.L.M., is a professor of business administration at the University of Virginia Darden School of Business. He is currently studying how to apply the science of learning in a business environment. His most recent book, Learn or Die: Using Science to Build a Leading-Edge Learning Organization, provides a guidance on turning an organization into a “High-Performance Learning Organization (HPLO),” which he describes as requiring “the right kinds of people, in the right learning environment, using the right learning processes, to continually learn faster and better than the competition.” As part of his investigations into the topic, Hess visited Bridgewater, observed meetings, and interviewed employees. The book contains many insights, though we’ve pulled out a few here:

Ray Dalio on what makes Bridgewater a high-performance learning organization:

“[High-quality] learning requires high-quality critical thinking and high-quality learning conversations, which in turn require an environment of trust and authenticity, the freedom to speak freely, and the freedom to be ‘human’ and disclose our weaknesses … Bridgewater has put in place these processes that enable and promote not only critical thinking but also the confrontation of each individual’s ego defenses that inhibit his or her learning and growth.”

“I am not saying that Bridgewater is just like the Navy SEALs. Making the best investment decisions is not analogous to executing a Navy SEAL mission; however, it’s clear that there are common threads between the cultures of these two high-performance but very different organizations. The fact that some of the same learning mindsets, capabilities, and processes apply in high-change environments, both business and nonbusiness, is compelling.”

“Bridgewater is probably the most advanced learning organization I have studied—by that I mean that its learning culture and processes are consistent with what is known in the science of learning. Bridgewater has confronted our “humanness” better than most organizations I have studied or worked with; the only other organization that I have found that relies as heavily on the science of learning is the U.S. Army.”

Ray Dalio on Bridgewater’s culture and principles:

“Disagreements are encouraged because . . . the process of wrestling through disagreements and stress testing one’s thinking and beliefs [gets one] to the truth or a better place. One senior manager told me ‘I don’t like conflict. But I deal with it here because it has rational benefits.’”

“At Bridgewater, Ray continually emphasizes that people’s differences—their unique ways of thinking and seeing the world—are good, because all jobs are not the same. It is those differences that bring together different ideas and the different perspectives necessary to stress test ideas and create the best outcomes for an organization. The challenge is to educate people to embrace each other’s uniqueness and independent thinking.”

Source: Ray Dalio's Linkedin

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