Here are the forces behind Bridgewater’s self-reinforcing evolutionary spiral: We went from one independent thinker who wanted to achieve audacious goals to a group of independent thinkers who wanted to achieve audacious goals. To enable these independent thinkers to have effective collective decision-making, we created an idea-meritocracy based on principles that ensured we would be radically honest and transparent with each other, have thoughtful disagreements, and have idea-meritocratic ways of getting past our disagreements to make decisions. We recorded these decision-making principles on paper and later encoded them into computers and made our decisions based on them. This produced our successes and failures, which produced more learnings, which were written into more principles that were systemized and acted upon. This process resulted in excellent work and excellent relationships that led us to having well-rewarded and happy employees and clients. That led us to be able to bring in more audacious independent thinkers with more audacious goals to strengthen this self-reinforcing upward spiral.
We did that over and over again, which produced the evolutionary looping behind Bridgewater’s forty-plus years of success.
This really works! You don’t have to take my word for it. There are two ways you can evaluate the likelihood that this approach and the principles that follow from it are as powerful as I believe they are. You can look at the results they produced and look at the logic behind them.
As for the results, our track record speaks for itself. We consistently got better over forty years, going from my two-bedroom apartment to becoming the fifth most important private company in the U.S., according to Fortune, and the world’s largest hedge fund, making more total money for our clients than any other hedge fund in history. We have received over one hundred industry awards and I’ve earned three lifetime achievement awards, not to mention remarkable financial and psychological rewards and most importantly, amazing relationships.
But even more important than these results is the underlying cause-effect logic behind these principles, which came before the results. Over forty years ago, this way of being was a controversial, untested theory that nevertheless seemed logical to me.
There’s no doubt that our approach is very different. Some people have even described Bridgewater as a cult. The truth is that Bridgewater succeeds because it is the opposite of a cult. The essential difference between a culture of people with shared values (which is a great thing) and a cult (which is a terrible thing) is the extent to which there is independent thinking. Cults demand unquestioning obedience. Thinking for yourself and challenging each other’s ideas is anti-cult behavior, and that is the essence of what we do at Bridgewater.
Some people say that our approach is crazy, but think about it: Which approach do you think is crazy and which one is sensible?
One where people are truthful and transparent, or one in which most people keep their real thoughts hidden?
One where problems, mistakes, weaknesses, and disagreements are brought to the surface and thoughtfully discussed, or one in which they are not forthrightly brought to the surface and discussed?
One in which the right to criticize is nonhierarchical, or one in which it primarily comes from the top down?
One in which objective pictures of what people are like are derived through lots of data and broad triangulations of people, or one in which evaluations of people are more arbitrary?
One in which the organization pursues very high standards for achieving both meaningful work and meaningful relationships, or one in which work quality and relationship quality are not equally valued and/or the standards aren’t as high?
Which kind of organization do you think will enable better development for the people who work there, foster deeper relationships between them, and produce better results? Which approach would you prefer to see the leaders and organizations that you deal with follow? Which way of being would you prefer the people who run our government to follow?
My bet is that after reading this book, you will agree that our way of operating is far more sensible than conventional ways of operating. But remember that my most fundamental principle is that you have to think for yourself.