An alternative perspective from Current Affairs: “How To Make Everyone In Your Vicinity Secretly Fear And Despise You”.
Reports from former employees have suggested a workplace rife with accusations, confrontations, and interrogations. There was, for example, an episode in which “former COO Hope Woodhouse was shredded in front of the management committee and the sessions were sent out to the company to learn from (she was brought to the point of crying in the recording).” Implementation of the Principles is just about as Orwellian as you might expect:
Two dozen Principles “captains” are responsible for enforcing the rules. Another group, “overseers,” [bit of an unfortunate choice of title, no?] some of whom report to Mr. Dalio, monitor department heads. The video cameras that record daily interactions for future case studies are so ubiquitous that employees joke about “the men in the walls.” … Each day, employees are tested and graded on their knowledge of the Principles. They walk around with iPads loaded with the rules and an interactive rating system called “dots” to evaluate peers and supervisors. The ratings feed into each employee’s permanent record, called the “baseball card.”
Dalio tells readers that they need to get over their mushy, sentimental reactions, and embrace radical truth for the sake of the common good. He gives the example of a wildebeest being eaten alive, witnessed on one of his many hunting trips, in order to show that what appears to be horrific suffering might actually be “wonderful”:
When I went to Africa a number of years ago, I saw a pack of hyenas take down a young wildebeest. My reaction was visceral. I felt empathy for the wildebeest and thought that what I had witnessed was horrible. But was that because it was horrible or was it because I am biased to believe it’s horrible when it is actually wonderful? That got me thinking. Would the world be a better or worse place if what I’d seen hadn’t occurred?… I could see that the world would be worse. I now realize that nature optimizes for the whole, not the individual, but most people judge good and bad based only on how it affects them. … Most people call something bad if it is bad for them or bad for those they empathize with, ignoring the greater good.
Matt Levine of Bloomberg, who has observed Bridgewater for quite some time, has said that the company never seems to offer any real substantiation for the link between management culture and the high investment returns:
Does Bridgewater ever analyze whether its culture of constant self-examination and radical transparency is actually good for its investing? … [In Bridgewater’s self-descriptions] it’s never “our culture of constantly rating each other on iPad apps leads to better investment returns,” always “our culture of constantly rating each other on iPad apps leads to better ratings on the iPad apps.”… I am always left with the sense that the group therapy is the point, that the investor returns are a happy accident that subsidize all the introspection, and that Bridgewater is an odd little eddy in financial capitalism that uses investor money to fund the pursuit of personal enlightenment… I have joked before that Bridgewater’s business model is that it has a computer that does its investing, and that the computer uses the personal-rating games to distract the human employees so they don’t interfere with the investment process. If you spend all your meetings debating what the meetings should be about, then sure, you’re probably not going to have time to monkey with the investment algorithms.
The entire article is worth reading.
This seems to elide an important reason for withholding information: power imbalances. I think this is part of what Said is getting at. Except for somewhat equal partnerships or other genuinely nonhierarchical arrangements, I’d expect disclosing this sort of info to be used to extract more from me, and not to help me.
The cost, of course, is way more communication about seemingly non-work-related things. You’d be processing personal stuff with coworkers all the time. The hope is that this is actually cheaper than the costs of the bad decisions made when you don’t have enough honest communication, but it’s an empirical matter whether that works out in practice, and the authors don’t have data so far.
As described in this post, a “DDO” sounds to me like a dystopian hellscape (and I very much doubt that I’m the only one; “processing personal stuff with coworkers all the time”, in particular, sounds like torture).
But hiding within that observation is a more subtle point:
It is, perhaps, possible that operating as a DDO is “cheaper”—for the company (though I am inclined to doubt it). But it’s a heck of a lot more expensive for the employees. Even in the best case (where the company’s performance improves as a result of adopting this model of company culture), this sort of approach boils down to the firm externalizing a large chunk of its operating costs onto its employees.
It is, perhaps, possible that operating as a DDO is “cheaper”—for the company (though I am inclined to doubt it). But it’s a heck of a lot more expensive for the employees. Even in the best case (where the company’s performance improves as a result of adopting this model of company culture), this sort of approach boils down to the firm externalizing a large chunk of its operating costs onto its employees.
This doesn't seem to make economic sense. If the company is imposing large costs on its employees, the employees would demand bigger salaries (or other compensation) to work at that company instead of another, so "externalizing" doesn't apply here. Of course there are exceptions to this, like if the employees are being tricked to not notice the imposed costs, or are biased to underestimate the imposed costs, but I don't see an obvious reason to think that's the case. I mean, when someone interviews for Bridgewater, do they hide the company culture and what it's like to work there? Presumably not since the CEO wrote a book about it?
if the employees are being tricked to not notice the imposed costs
That’s precisely what I think is going on, yes. It’s not that people don’t notice, it’s that they don’t perceive them as costs—because of, among other things, posts like the OP, which frame the whole thing as a sort of “personal growth” thing, that actually benefits the employee, that makes working at the company more enjoyable, more fulfilling, etc. Certainly, it would stand to reason that employees would demand substantially bigger salaries/compensation for putting up with this sort of thing. But it’s in the interests of employers who want to use this sort of approach, to trick prospective (and current) employees not to act in their own economic best interests… which is, of course, precisely what we see.
But it’s in the interests of employers who want to use this sort of approach, to trick prospective (and current) employees not to act in their own economic best interests… which is, of course, precisely what we see.
So actually not. As I mentioned in another comment, adding people to your DDO who aren't on board with being in a DDO is a recipe for disaster: they will be unhappy at what a DDO asks of them, and the organization will be less DDO-like (to the point it may cease to really be a DDO). Maybe that's what's happened at Bridgewater; I don't know there so I can't say.
All businesses ask employees to make particular choices about a bundle of goods that they purchase with their labor. DDOs offer a currently uncommon bundle of goods that some people like a lot. Some people don't like it, so they work at other businesses that offer a different bundle of goods in exchange for labor. Yes, some of the bundle of goods can be negotiated on an individual basis, such that, for example, someone who isn't excited about working at a DDO but that the DDO really wants to hire might pay them extra to compensate them for doing labor they view as more costly, but the case is exactly the same when we consider an organization with a culture of Taylorism or something else: if it wants to hire someone who isn't excited about the culture, they will have to compensate them to offset the costs associated with the culture. As it turns out, though, mind space is big, not everyone wants the same thing, and so there are plenty of people to go around who want to work in these different types of cultures and are happy to do so for not much additional compensation on the margin.
I also liked "An Everyone Culture", but then I'm biased heavily in favor of Kegan, so no surprise there.
"An Everyone Culture" is Kegan and Lahey's most accessible book, by which I mean it asks you to agree with them the least about constructive developmental theory relative to their other books. I personally found it kind of boring since I read Kegan forward rather than backward and if you've read "The Evolving Self" then basically everything else he's done since then is just an elaboration on the key insights found there, but if you want to gently understand Kegan without getting thrown straight in the deep end of philosophy then reading his works backwards makes a lot of sense. If you were to read only one book of which Kegan is the author, though, I think "Immunity to Change" is the best bet, since it provides the most concise explanation of the theory and the most how-to knowledge of all his and Lahey's works.
A few words now on working/creating a DDO.
I don't think anyone but me would call my employer a DDO, but I molded it to be that. It's a startup, I was an early employee, and as we grew I got my hands dirty shaping the culture into the kind of place I wanted to work. There are lots of way I did this culture shaping from active nudging at the edges to major efforts to get folks aligned, but if I had to boil it down to a few slogan-sized descriptions of what I did it would be:
Unlike a place like Bridgewater, say, we don't spend much time talking about our personal lives in formal settings and almost no one yells at anyone else, but it's a place where you can be yourself, no one is afraid for their job to tell their manager that they are causing problems (though they might not for other reasons), everyone gives and accepts feedback, and everyone supports everyone else (at least passively). If that sounds pretty ideal it's because it is.
Is there no middle ground? You say that Kegan paints it as a binary ("nothing inside the range of what we think of as a normal workplace"). But you suggest that kaizen is an intermediate. Your summary as two phrases suggests that they are separable ("everyone talks about mistakes and improvements, and where the personal/professional boundaries are broken down").
Also, the negative book is about how things actually work, while the positive book is about the system working as promised. But this could be cherry-picking successes. Is there any reason to believe that DDO is self-correcting? Why shouldn't we expect the worst of both worlds, implementations with the face of a DDO that actually work as describe in Moral Mazes? (which is probably what people insinuate with the word "cult") Does the book make an argument, or does it just profile success stories?
Added: Indeed, "The Western Elite from a Chinese Perspective" talks about the discussion of emotion at business school and implies that people are faking it.
This isn't a direct response to your question, I just had a thought about the "nothing inside the range of what we think of as a normal workplace" line.
There might be plenty of middle ground available, but I would expect virtually all of those solutions to consistently fail. I expect this because people are mostly going to continue doing what they were doing, with as few adjustments as possible. So people will usually do the same thing and just call it the new thing; or if it is an additional thing do the absolute minimum or completely ignore it; if they do have to put real effort into whatever the new thing is they will take it out of something else.
The appeal of radical solutions is that they make it very clear that both the process and the incentives have changed at the same time, so doing it the old way is impossible.
This makes reasonable sense, with a caveat:
I've worked at an early-stage startup inspired by Bridgewater culture. It was aspiring to be "radical honesty + compassion."
There were a number of issues with the company (some of them my fault). But in general, the company didn't succeed at making radical honesty feel safe (meanwhile, I've heard that Bridgewater is an incredibly stressful place to work at, although some stories made it seem more like "the first year feels sort of like hazing, after that it feels reasonable.")
In Ray Dalio's Principles book, he says that there were severe growing pains as Bridgewater transitioned from small-to-big. In the earlier years, they were small enough and everyone knew each other well enough for the radical honesty thing to work. As they grew, many new employees constantly felt like they were getting yelled at, and eventually Dalio's colleagues told him he was stressing everyone out and needed to change. What they ended up doing was developing principles that made the radical honesty stuff more systematized, with clearer expectations.
My overall take is that this sort of direction is probably good, but requires either a lot of internal alignment and existing trust (i.e. small teams), or requires a lot of skill on the part of managers to make it actually feel (and be) safe.
Main point being, if you're an aspiring company founder, don't assume going this route will be easy.
It would be great if you introduce the abbreviations you use the first time you define a term, to allow easy searching for definitions.
The concepts discussed here remind me of a book I read recently called "The Cure: Enterprise Medicine for Business". It's in the format of a novel, from the persectives of several different characters involved in a business that makes (unspecified) widgets, and I found it to be a page-turner. I think using a fictional example helps to make a lot of things explicit that would otherwise be kind of vague, or where the author might assume the reader knows what they're talking about, and the first half gives some great insight into what a poorly-functioning company can look like.
The central recommendation is similar to what you describe from An Everyone Culture, except that the emphasis on radical communication doesn't include personal stuff. The main "trick" it gives for making the whole organization work is that the top management has to buy in to the extreme-honesty company-first mentality and then continually force it on everyone else until it's universally accepted, with special attention to discovering and removing any stubborn manager who wants to protect their own turf or play power games. It claims to be based on the famously effective management system that GE used. Having little experience of corporations myself, I can't say whether it's a realistic approach, but the whole thing struck me as a little too neat and tidy--if it were that easy, wouldn't everybody be doing it already?
Having little experience of corporations myself, I can't say whether it's a realistic approach, but the whole thing struck me as a little too neat and tidy--if it were that easy, wouldn't everybody be doing it already?
So the reality of implementing something like a DDO is that the path to success is very narrow and there are lots of opportunities to mess up and create something worse than the default. For example, you might try to demand radical honesty, but if you punish people when they are honest and you don't like what they had to say, the culture will get toxic fast. Or maybe you go too far on being accepting and making people feel safe and then nothing ever gets done because no one wants to say "hey, if you keep not doing your job, we'll go out of business". And everyone has to be on board with being a DDO, so hiring (and firing) are an even more essential function than normal because you have to find people who not only can do the job, but are also capable of being a healthy part of the org. If you have just one person who's not on board, even if they are an individual contributor and not managing or leading anyone, this can sour the culture and start to turn people on each other if that person is able to have a strong enough effect on others.
For this reason I think it's also very hard, and maybe impossible, to do a conversion to a DDO unless you are willing to accept a timeline much longer than any normal business would. Building one from the ground up isn't easy, either, but it's definitely possible even if you haven't done it before so long as you keep iterating, experimenting, keeping to the goal, and gently correcting when you stray.
Epistemic Status: Casual
I highly recommend An Everyone Culture, by Robert Kegan, and Moral Mazes, by Robert Jackall, as companion books on business culture. Moral Mazes is an anthropological study of the culture and implicit ethics of a few large corporations, and is an eye-opening illustration of the problems that arise in those corporations. An Everyone Culture is an introduction to the idea of a “deliberately developmental organization”, an attempt to fix those problems, plus some case studies of companies that implemented “deliberately developmental” practices.
The basic problem that both books observe in corporate life is that everybody in a modern office is trying to conceal their failures and present a misleadingly positive impression of themselves to their employers and coworkers.
This leads to lost productivity.
For instance:
Moral Mazes basically takes the view that the Protestant work ethic really died in the mid-to-late nineteenth century, when an American economy defined by small business owners and freelance professionals was replaced by an economy defined by larger firms and the rise of the managerial profession. The Protestant work ethic declared that hard work, discipline, and honesty would bring success. The “managerial work ethic” holds that a good employee has quite different “virtues” — things like
To give an outside example, the author of “The Western Elite from a Chinese Perspective” was coming from a “Protestant work ethic” culture of hard work (though not, of course, actually Protestant) and encountering the “managerial work ethic” culture of American office politics.
Moral Mazes relies on the author’s observations and interviews with managers. I’m sure it’s not a fully objective portrayal — perhaps the author selected the most damning quotes, and perhaps the most disgruntled and cynical managers were the most willing to talk. But the picture the book gives is of a culture where:
If you watch The Marvelous Mrs. Maisel, Joel Maisel’s job at the plastics company is a classic example of the managerial work ethic; he’s basically a professional sycophant. He’s burned out and unmotivated, and he leaves to “find himself” as a comedian, but quickly realizes he has no talent at comedy either. Instead, working in his father’s garment business, he comes to life again. He learns the nitty-gritty of the factory floor, the accounting, the machines, the seamstresses and their personal needs and strengths and weaknesses. It’s a beautiful illustration of the difference between fake work and real work.
An Everyone Culture‘s prescription for the problems of deception, sycophancy, and stagnation in conventional companies is complex, but I’d summarize it as follows: creating a culture where everyone talks about mistakes and improvements, and where the personal/professional boundaries are broken down.
This sounds vaguely cultish and shocking, and indeed, the companies profiled (like Bridgewater) are often described as cults. Kegan acknowledges that their practices are outside most of our comfort zones, but believes that nothing inside the range of what we think of as a normal workplace will solve workplace dysfunctions.
What distinguishes the companies profiled in the book is a lot of talk, about issues that would ordinarily be considered too “personal” for work. When someone makes a mistake, a DDO looks for the root cause, as you would in a kaizen system, but it won’t stop there — people will also ask what personal or psychological issue caused the mistake. Does this person have a tendency towards overconfidence that they need to work on? Were they afraid of looking bad? Do they need to learn to consider others’ feelings more?
It’s vulnerable to be laid bare in this way, but, at least in the ideal of a DDO, everyone does it, from the interns to the CEO, to the point that people internalize that having flaws and a personal life is nothing to hide. Some people would find this horrifically intrusive, but others find it a relief.
I’ve never worked in a DDO, but I think I might like it; with enough mandated transparency, I’d be forced to override the temptation to hide flaws and make myself look better, and could focus better on actually doing good work.
The cost, of course, is way more communication about seemingly non-work-related things. You’d be processing personal stuff with coworkers all the time. The hope is that this is actually cheaper than the costs of the bad decisions made when you don’t have enough honest communication, but it’s an empirical matter whether that works out in practice, and the authors don’t have data so far.