I have been reading Ray Dalio’s Principles after getting interested from watching Ray’s TED talk. Before his TED talk and before his book came out, I had no idea who Ray was but now regret not knowing about Ray earlier.
Ray is an American billionaire investor, hedge fund manager and he has been called the Steve Jobs of Investing. While he has had huge success in investing, he has also had a lot of failures. From each of his failures, he has understood why he has failed and developed ‘principles’ to help him make better decisions and not make the same mistakes in the future.
I have been recently enamoured with this idea of radical transparency that Ray touts. In order to believe in this concept, you have to believe in the idea that the best ideas should win. Or that an organization should always be striving for the best outcome or results. And to me, I think this makes a lot of sense (though at a lot of companies, I don’t think the culture has shifted in that direction quite yet).
What does radical transparency mean though?
Immediate meeting feedback
At Ray’s company, he has an app that comes up after every meeting where you can rate how well meeting participants interacted during the meeting. Nobody is immune — even Ray gets feedback sometimes where he may be dominating the conversation, not considering the different angles of a problem or not getting enough input from everyone at the meeting. Small blips of this may not be important (just as one or two bad reviews of a product may just be anomalies) but if you are getting consistent feedback from others, it might mean that you have an opportunity to improve. All of this feedback is then fed into a central database and stored to track patterns and trends. These are, I assume, then fed to the employees so that they can understand where and what to improve.
Ray also has a concept that he borrowed from baseball cards (or in some of our cases, hockey cards). If you think back to your childhood, hockey cards had a picture of the hockey star in front and some of their stats on the back. Stats like goals, assists, penalty minutes, maybe even saves and save percentage if the stars were goalies. Ray wanted to bring this concept to his company by developing ‘baseball’ cards of all of the employees at his company, except instead of tracking stats, he tracked different traits of employees such as creativity, getting things done, project management, etc. Employees that have higher scores in specific traits (such as creativity), would have a higher weight when rating other employee’s creativity.
Above are just two ways that Ray has introduced radical transparency at his company, but I also wanted to explore how to introduce it into the work that some of us do (where we may not work at a billion dollar hedge fund company).
Be open minded
It’s easy to say this and in theory, it is a good idea but I see it in management consulting where people defer their opinions or recommendations to those that are more senior in the company. Sure they have more experience and they may have expertise that you do not have, but that does not mean that you should not have a say. I have even noticed this about myself — as I move up in the company and gain more and more experience, less experienced members of the team defer to my expertise and I’ll even sometimes override the direction that has been made previously without considering all the different ideas that my team comes up with. How do you stay open minded? Ask more questions. Don’t be afraid of being wrong every once in a while. Make sure that all of your team members provides input in some way.
I once worked with a Partner where every time he introduced a new idea or direction in our deliverable, he would say “I think it should be this way but I am open to being challenged.” I thought this was a fantastic way of making sure that just because he has authority, that does not mean that his ideas are necessarily the best. He was open to being convinced in a different way (i.e., have strong beliefs, loosely held) and made it okay to do so. Sure, the team may not have as much experience to challenge him but being open to different ideas sets up a different team culture and environment.
It’s okay to be wrong
Nobody can be right all the time. Sometimes you make a decision and it does not end up being the right decision. If the next time you make a decision that does not have the right outcome, stop and consider whether you made the right decision (and just had a bad outcome) or made the wrong decision (because you did not consider all the different angles and perspectives of the problem). If the latter, make sure that you are getting input from others on your team. Approach the team with different questions — a great question that I learned (I can’t remember where) is to ask a pre-mortem question. A post-mortem is to review what happens after an event. A pre-mortem is a check before something occurs. Ask yourself and the team “if this project were to proceed and fail, what would have been the likely cause?” From there, everyone can identify risks, raise concerns and these can be mitigated and addressed ahead of time.
Bad ideas can be transformed into great ideas
When your team is providing input, the best way to ensure that they do not speak up again is to berate them on their ideas. Even some of the worst ideas may turn out to be good ones if reframed. In high school, I thought that I had come up with some really funny and dumb ideas: a solar powered flashlight for instance. Everybody thought it was funny / dumb because where you need it the most (in the dark), it would not work and where you do not need it (in the sunlight), it would work. Yet, years later, I learned that solar powered flashlights are a great idea — flashlights store energy from the sun into batteries that could then be used in the dark later when there was no sun. Heck, I think I would go even further by rewarding those with any ideas (good or bad).
Asking for feedback
Constructive criticism is perhaps every employee’s nightmare. But it does not have to be a bad thing at all (although maybe our egos make it a bad thing). Even after receiving a ton of constructive feedback, I still dread being criticized or told that I’m not perfect. How do you get better at receiving feedback? First, reframe the feedback into opportunities for growth. Everybody has room to grow — even the most successful people out there are looking for areas of growth. Second, seek it out often. Just like with the meeting app, you may have small blips of feedback that does not hit you the right way but if you notice trends or patterns in the feedback that you are receiving, that tells you that there may be something there to improve. Finally, understand whether you actually need to do anything with the feedback or not. If everyone improved on their weaknesses, they would all be the same well-rounded individual with the same strengths and (lack of weaknesses as others) but maybe you want to be that pointy individual (that is, strengths in a few specific areas) instead. You can let the feedback sit around and fester in your mind. You can let the feedback strengthen your resolve as a pointy individual. You can even let the feedback guide you into becoming more pointy (and trying to minimize your weaknesses by avoiding them / delegating those activities / working around them as much as possible).
Radical transparency — a wonderful concept that I believe a lot of organizations should really embrace.