Precept 26B in Ray Dalio's Principles manifesto reads: “There is giant untapped potential in disagreement, especially if the disagreement is between two or more thoughtful people.”
It's worth keeping in mind as you read Dalio's latest LinkedIn post, a stemwinder on “The Fake and Distorted News Epidemic and Bridgewater's Recent Experience With The Wall Street Journal,” spurred by a recent story about Dalio's firm Bridgewater Associates, the largest and possibly weirdest hedge fund in the world.
The post runs nearly 2,700 words, but the gist is this: Screw the media.
Specifically, the media reports stories that differ with what the subjects of those stories perceive to be true. As is de rigueur in media discussions these days, Dalio throws in some stats about declining trust in the news industry and alludes to the “fake and distorted media epidemic.”
But setting aside the increasingly meaningless “fake news” designation, it's an old story: a captain of industry lamenting how the media covers him. For Dalio – the quirky manager of the biggest hedge fund in the world, a boss who demands his employees eliminate weaklings like “a pack of hyenas [taking] down a young wildebeest” – media attention is inevitably acute.
In the present case, Dalio took issue with how WSJ reporters Bradley Hope and Rob Copeland characterized Bridgewater's culture and secretive internal projects in a recent story: “The World’s Largest Hedge Fund Is Building an Algorithmic Model From its Employees’ Brains.” As you'll recall, Dealbreaker advanced the story with the sober speculation that the project might end in Dalio's essence merging with the web and ruling us all.
As Dalio tells it, he gave the reporters access on the condition that WSJ would not publish the story unless both parties agreed to Bridgewater's characterization. If true, that would look an awful lot like a reporter giving his subject prior review, a practice that is frowned upon, if not verboten, at major media outlets.
Dalio didn't like it and the WSJ went to print anyway. Beyond that apparently broken promise, Dalio's concerns tend toward subjective disagreements – or “distortions” – rather than material untruths. Here is an exhaustive list of Dalio's beefs:
- The reporters cast Bridgewater as an “oppressive environment,” Dalio says, when in reality “we have about 1,500 people who work at Bridgewater, most of whom love it rather than feel oppressed.” The reporters spoke to “more than a dozen other past and present Bridgewater employees and others close to the firm,” whom Dalio felt gave a disproportionately disgruntled perspective.
- The reporters didn't take a walk-through of Bridgewater, nor did they interview the authors of books on the firm's culture (e.g., Learn or Die).
- The reporters did not copy and paste a 156-word chunk of text Dalio provided on the merits and drawbacks of his firm's storied “radical transparency.”
- The reporters wrote, “Bridgewater says about one-fifth of new hires leave. The pressure is such that those who stay are seen crying in bathrooms.” Dalio had no problems with the stat or the story about the crying jags – which he quotes in the post – but he'd hoped the WSJ would note that Bridgewater's turnover diminishes over time.
- The reporters wrote that Dalio had “decided to let only 10 percent have the full measure of what he calls radical transparency.” Actually, Dalio said: “Everyone can see most everything, but only the top 150 or so people get to see the most sensitive type of stuff which, in most companies would be limited to only the top 5 or 10 people.”
- Finally, the reporters' description of Bridgewater's “secret project” – computerizing management decisions – was “sensationalistic and misleading,” Dalio wrote. “The writers chose to characterize all this as being ‘like trying to make Ray’s brain into a computer’ because that fit better with their desire to paint a picture of Bridgewater being a crazy, oppressive place run by a Dr. Frankenstein type character.” (The “Ray's brain” quote actually came from a former employee, not the reporters themselves, as Dalio's post implies.)
Other than the apparently breached gentleman's agreement, there's nothing from the WSJ story Dalio cites that appears to be a literal untruth. He's peeved about mischaracterizations in service of a juicy story. Of course, artful embellishment can become a journalistic crime if it presents narrative that is fundamentally unfair. But that's a far cry from “fake news.”
You can't fault Dalio for wanting to dispel the notion that Bridgewater is a punishing and “oppressive” workplace that requires employees to subscribe to an intense and unusual set of behavioral norms. Bridgewater is “the opposite of a cult,” Dalio has insisted, and he seems earnest in the belief.
The problem for Dalio is that in his attempt to make Bridgewater sound less bizarre and cultish, it still smacks of the bizarre and cultish. Regarding the radically open, emotionally demanding workplace, Dalio readily admits it has drawbacks, chief among them that “it is initially very difficult for most people to deal with uncomfortable realities.” Indoctrination is never easy.
For those who have run the gauntlet, though, Bridgewater gets David-Miscavige-like levels of internal support: 89 percent of employees agreed that “running Bridgewater according to the culture and principles is key to Bridgewater’s success,” Dalio boasts. Ninety-four percent agreed that “the culture helps my personal evolution.” These are numbers so good they're spooky.
For the management-algorithm project, Dalio explained, “We are doing this because we have learned that this principled and systemized decision making process allows us to get above our emotional attachments to our own conclusions and focus instead on deciding what our decision making criteria should be.” He adds that “by collecting data on people, we can learn what they are like, what jobs they are best suited for, and how they would most effectively work together.”
If you, like Dalio, have spent the last four decades building a culture that equates new employee orientation to the wild slaughter of baby herbivores, all of the above might seem quotidian. But most people don't work at a place that demands a complete divorce from their emotional selves. If you live in the world outside of Bridgewater, survival-of-the-fittest HR practices and algorithmic management might seem, at the very least, noteworthy. Thus the media attention.
What Dalio sees as the conquest of rationality over emotion in the service of delivering higher returns may, depending on your audience, strike others as a bizarre set of eccentricities that exacts a real human cost. Or maybe not! Dalio's stance seems to be, “You might find these practices strange, but they work.” The reporters, interested in telling a good story, settle with “Check out these strange practices.” The rest is interpretation.
Did Hope and Copeland insufficiently extol Bridgewater? In Dalio's eyes, yes. Did they fail to fill the story with lengthy block quotes written in bloodless Dalioese? Thankfully, yes. Did they interview disproportionately few content employees? Sure. But happy employees don't make news – and given the abnormally high turnover at Bridgewater, disgruntled employees really are a big part of the story.
Finally, did the overarching WSJ narrative present a distorted view of Dalio, Bridgewater and the principles of radical transparency? That's for the reader to determine.
Incidentally, the last thing to appear on WSJ reporter Hope's Twitter timeline before Dalio's post was a retweet of a colleague quoting former WSJ publisher Peter Kann musing on the media. “Truth is attainable by laying fact upon fact,” Kann said. “News, in short, is not merely a matter of views. And truth is not merely in the eye of the beholder.”
UPDATE: Dow Jones has a statement on Dalio's LinkedIn post. “The Wall Street Journal stands by its strong reporting about Bridgewater Associates. We have reviewed the efforts undertaken for this article and are confident that the same high journalistic standards that have served the publication and its readers well for more than 125 years were fully applied in this instance.”