Principles: Life and Work

by Ray Dalio

b. Don’t let loyalty to people stand in the way of truth and the well-being of the organization. In some companies, employees hide their employer’s mistakes, and employers do the same in return. This is unhealthy and stands in the way of improvement because it prevents people from bringing their mistakes and weaknesses to the surface, encourages deception, and eliminates subordinates’ right of appeal. The same thing applies to the idea of personal loyalty. I have regularly seen people kept in jobs that they don’t deserve because of their personal relationship to the boss, and this leads to unscrupulous managers trading on personal loyalties to build fiefdoms for themselves. Judging one person by a different set of rules than another is an insidious form of corruption that undermines the meritocracy. I believe in a healthier form of loyalty founded on openly exploring what is true. Explicit, principled thinking and radical transparency are the best antidotes for self-dealing. When everyone is held to the same principles and decision making is done publicly, it is difficult for people to pursue their own interests at the expense of the organization’s. In such an environment, those who face their challenges have the most admirable character; when mistakes and weaknesses are hidden, unhealthy character is rewarded instead.