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To be “good,” something must operate consistently with the laws of reality and contribute to the evolution of the whole; that is what is most rewarded.
Evolution is the single greatest force in the universe; it is the only thing that is permanent and it drives everything.
Evolve or die.
Evolving is life’s greatest accomplishment and its greatest reward.
The individual’s incentives must be aligned with the group’s goals.
Reality is optimizing for the whole—not for you.
Adaptation through rapid trial and error is invaluable.
Realize that you are simultaneously everything and nothing—and decide what you want to be.
What you will be will depend on the perspective you have.
It is a fundamental law of nature that in order to gain strength one has to push one’s limits, which is painful.
Think of yourself as a machine operating within a machine and know that you have the ability to alter your machines to produce better outcomes.
By comparing your outcomes with your goals, you can determine how to modify your machine.
Distinguish between you as the designer of your machine and you as a worker with your machine.
The biggest mistake most people make is to not see themselves and others objectively, which leads them to bump into their own and others’ weaknesses again and again.
Successful people are those who can go above themselves to see things objectively and manage those things to shape change.
Asking others who are strong in areas where you are weak to help you is a great skill that you should develop no matter what, as it will help you develop guardrails that will prevent you from doing what you shouldn’t be doing.
Because it is difficult to see oneself objectively, you need to rely on the input of others and the whole body of evidence.
If you are open-minded enough and determined, you can get virtually anything you want.
An organization is a machine consisting of two major parts: culture and people.
A great organization has both great people and a great culture.
Great people have both great character and great capabilities.
Great cultures bring problems and disagreements to the surface and solve them well, and they love imagining and building great things that haven’t been built before.
Tough love is effective for achieving both great work and great relationships.
In order to be great, one can’t compromise the uncompromisable.
A believability-weighted idea meritocracy is the best system for making effective decisions.
For any group or organization to function well, its work principles must be aligned with its members’ life principles.
A great organization has both great people and a great culture. Companies that get progressively better over time have both. Nothing is more important or more difficult than to get the culture and people right.
Great cultures bring problems and disagreements to the surface and solve them well, and they love imagining and building great things that haven’t been built before. Doing that sustains their evolution.
By meaningful work, I mean work that people are excited to get their heads into, and by meaningful relationships I mean those in which there is genuine caring for each other (like an extended family). I find that these reinforce each other and that being radically truthful and radically transparent with each other makes both the work and the relationships go better.
1) having clear goals, 2) identifying the problems preventing the goals from being achieved, 3) diagnosing what parts of the machine (i.e., which people or which designs) are not working well, 4) designing changes, and 5) doing what is needed. This is the fastest and most efficient way that an organization improves.
A manager’s ability to recognize when outcomes are inconsistent with goals and then modify designs and assemble people to rectify them makes all the difference in the world. The more often and more effectively a manager does this, the steeper the upward trajectory.
The rare few that have been able to evolve well over the decades have been successful at that evolutionary/looping process, which also is the process that has made Bridgewater progressively more successful for forty years.
Work was a game I played with passion and I wanted to have a blast playing it with people I enjoyed and respected.
I started Bridgewater out of my apartment with a pal I played rugby with who had no experience in the markets and a friend we hired as our assistant. I certainly wasn’t thinking about management at the time.
Tough love is effective for achieving both great work and great relationships.
In order to be great, one can’t compromise the uncompromisable.
the more caring we gave each other, the tougher we could be on each other, and the tougher we were on each other, the better we performed and the more rewards there were for us to share.
As hard as they were, we look back on some of these challenging times as our finest moments. For most people, being part of a great community on a shared mission is even more rewarding than money.
Our overriding objective is excellence, or more precisely, constant improvement, a superb and constantly improving company in all respects. Conflict in the pursuit of excellence is a terrific thing. There should be no hierarchy based on age or seniority. Power should lie in the reasoning, not the position, of the individual. The best ideas win no matter who they come from.
Criticism (by oneself and by others) is an essential ingredient in the improvement process, yet, if handled incorrectly, can be destructive. It should be handled objectively. There should be no hierarchy in the giving or receiving of criticism.
Teamwork and team spirit are essential, including intolerance of substandard performance. This is referring to 1) one’s recognition of the responsibilities one has to help the team achieve its common goals and 2) the willingness t...
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Our fates are intertwined. One should know that others can be relied upon to help. As a corollary, substandard performance cannot be tolerated ...
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1. We went from one independent thinker who wanted to achieve audacious goals to a group of independent thinkers who wanted to achieve audacious goals. 2. 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. 3. We recorded these decision-making principles on paper and later encoded them into computers and made our decisions
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As for the results, like Lombardi’s and the Packers’, our track record speaks for itself. We consistently got better over forty years, going from my two-bedroom apartment to become 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.
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.
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?
Think of these principles as being like a GPS. A GPS helps you get where you’re going, but if you follow it blindly off a bridge—well, that would be your fault, not the GPS’s.
No matter what path you choose to follow, your organization is a machine made up of culture and people that will interact to produce outcomes, and those outcomes will provide feedback about how well your organization is working. Learning from this feedback should lead you to modify the culture and the people so your organizational machine improves.
Make your passion and your work one and the same and do it with people you want to be with.
meaningful relationships enable the radical truth and transparency that allow us to hold each other accountable for producing excellence.
