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Bridgewater Associates Determines Which Employees Opinions Are More Valuable Than Others Based On A "Believability Matrix"

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The latest issue of AR Magazine features a lengthy profile of Ray Dalio's mega-successful Bridgewater Associates, with much space devoted to the "culture" of the firm, as defined by Principles, a handbook of sorts written by Dalio, which we shared last May. In sum, the firm requires its employees, 30 percent of whom leave within two years of being hired, to "trust in truth" and to "pursue the truth" relentlessly, in everything they do. Criticism is "both welcomed and encouraged" and rather than "depersonalizing mistakes" or saying "we didn't handle this well," the staff are told to "connect specific mistakes to specific people." It's an environment unlike any other hedge fund and those who've experienced the program firsthand seem to be divided into two camps, at least among those interviewed by AR**: Dalio and the Bridgewater officials (senior staff are referred to as "culture carriers") who think it's great and former employees who describe the place as "cultlike," "sinister," "eerie" and something out of George Orwell's 1984. Here's what one former exec had to say:

My fundamental belief is that Bridgewater is a cult. It’s isolated, it has a charismatic leader and it has its own dogma.” It was so stressful, he recalls, that one employee couldn’t sleep all night and then, in the morning, threw up before meetings with Dalio. (The incident could not be confirmed.)

Another likened being an employee at Bridgewater to being an abused puppy.

“It hits your confidence level after a while,” he said. Dalio’s “model is flawed because it denies human nature,” this former employee says, adding that the people who succeed at Bridgewater “are not afraid to get in your face. They believe you should have no emotion in anything you do. For many, because we’re all human beings, it’s a hard thing to get used to.” Says another: “What [Dalio] doesn’t understand is that if you kick a dog enough...[the dog] curls up and just whimpers. And he kicks pretty hard.”

Company meetings where most of the "in your face" conversations happen seem to be the biggest source of stress for those not comfortable with being on the receiving or giving end of a "let me tell you why your ideas suck" speech. One of the first passages that appears in Principles is a discussion of the dynamic between hyenas and wildebeest in the animal kingdom. It reads:

...when a pack of hyenas takes down a young wildebeest, is that good or evil? At face value, that might not be “good” because it seems cruel, and the poor wildebeest suffers and dies. Some people might even say that the hyenas are evil. Yet this type of apparently “cruel” behavior exists throughout the animal kingdom. Like death itself it is integral to the enormously complex and efficient system that has worked for as long as there has been life. It is good for both the hyenas who are operating in their self-interest and the interest of the greater system, including those of the wildebeest, because killing and eating the wildebeest fosters evolution (i.e., the natural process of improvement). In fact, if you changed anything about the way that dynamic works, the overall outcome would be worse.

And while everyone is supposedly encouraged to be a hyena toward others during truth-seeking sessions (Bridgewater prides itself on being "flat" environment, without a hierarchy), it was decided not too long ago that, actually, some hyena's opinions are less important than others. How is such a thing determined? Glad you asked.

The firm recently introduced a “believability matrix” to determine whose opinions matter.


Ray Dalio's Radical Truth [AR Magazine]

**The third group is Bridgewater's investors, who don't care either way.