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.
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.