That insight led me to talk with many psychologists, psychiatrists, neuroscientists, personality testers, and other believable people in the field, and it led me to read many books. I discovered that though it is obvious to all of us that we are born with different strengths and weaknesses in areas such as common sense, creativity, memory, synthesis, attention to detail, and so forth, examining these differences objectively makes even most scientists uncomfortable. But that doesn’t make it any less necessary, so I pushed forward with these explorations over several decades.
As a result, I have learned a lot that helped me and that I believe can help you. In fact, I attribute as much of my success to what I’ve learned about the brain as I do to my understanding of economics and investing.
When I started Bridgewater two years out of business school, I had to manage people for the first time. At first I thought that hiring smart people, for instance, the top students out of the top schools, should get me capable employees, but as often as not, those people didn’t turn out well. “Book smarts” didn’t typically equate to the type of smarts I needed.
I wanted to work with independent thinkers who were creative, conceptual, and had a lot of common sense. But I had a hard time finding those sorts of people and even when I did, I was shocked at how differently their brains seemed to work. It was as though we were speaking different languages. For example, those who were “conceptual” and imprecise spoke one language while those who were literal and precise spoke another. At the time, we chalked this up to “communication problems,” but the differences were much deeper than that, and they were painful for all of us, particularly when we were trying to achieve big things together.
I remember one research project, an ambitious attempt to systemize our global understanding of the bond markets, that took place years ago. Bob Prince was running it, and while we agreed conceptually on what we were trying to do, the project didn’t get pushed through to results. We’d meet with Bob and his team to agree on the goal and lay out how to get there. But when they’d go off to work on it, they’d make no progress. The problem was that conceptual people who visualized what should be done in vague ways expected more literal people to figure out for themselves how to do it. When they didn’t, the more conceptual people thought the more literal people had no imagination, and the more literal people thought the more conceptual people had their heads in the clouds. To make matters worse, none of them knew which were which, the more literal people thought that they were as conceptual as the conceptual people and vice versa. In short, we were gridlocked, and everyone thought it was someone else’s fault, that the people they were locking horns with were blind, stubborn, or just plain stupid.
Those meetings were painful for everyone. Because no one was clear about what they were good or bad at, everybody expressed opinions about everything and there wasn’t any sensible way of sorting through them. We discussed why the group was failing, which led us to see that the individuals Bob had chosen for his team reflected his own strengths and weaknesses in their own roles. While that took frankness and open-mindedness and was a big step forward, it wasn’t recorded and systematically converted into adequate changes, so the same people kept making the same sort of mistakes, over and over again.
Isn’t it obvious that our different ways of thinking, our emotional responses, and our not having ways of dealing with them is crippling us? What are we supposed to do, not deal with them?
I’m sure you’ve been in contentious disagreements before, ones where people have different points of view and can’t agree on what’s right. Good people with good intentions get angry and emotional; it is frustrating and often becomes personal. Most companies avoid this by suppressing open debate and having those with the most authority simply make the calls. I didn’t want that kind of company. I knew we needed to dig more deeply into what was preventing us from working together more effectively, bring those things to the surface, and explore them.