It has been a few months since I finished “Principles: Life and Work” by Ray Dalio.
As impressionable as I am, this book speaks to me. It felt as if I was reading a book written by an older more experienced me, based on what I finally understood in the last couple years.
I agree with all major points of the book and intend to discuss the book in its entirety elsewhere, but since this piece is for Chotot’s Blog, I thought it would be a good idea to focus specifically on workplace.
Let’s begin with the definition.
What is a good workplace?
What is a workplace, even?
One may posit that a workplace is where people banded together (e.g., a company) to achieve a shared goal. So, a good workplace would be one that actively enable people to reach that goal.
In trying to meet a goal, the company (which really is just a group of individuals) has to make a lot of decisions. Since decisions of the group originates from individuals, how do we know which choices are the best? It’d be fine and dandy if everyone agrees on what to do. But what to do when we do disagree?
I think everyone reading this has at least once in their life been told what to do, and strongly disagreed with it. Sometimes we are proven right, so we grew skeptical of an autocracy: we dislike it when our boss(es) told us what to do, especially when we think our way is better.
So that’s a no for autocracy. What about democracy? One person, one vote. Since it’s how most of the developed nations - especially Western - are run, there must be some merit to it, right? Even the word “democracy” conjures up a utopian image of people free and unoppressed, going on about their best lives to contribute most productively for their community and society.
Now I’m a lousy student of politics and history, but I think my belief that democracy is a compromise is grounded. You can’t really decide where you’d like to be born, and your nationality can’t be readily changed. Because the group’s decision affects you (and it may do so negatively), it’s only fair you should have an equal say in what it should be.
The problem with democracy isn’t whether you should have a say in the group’s decision. The issue is that your vote, however unfounded and uninformed it is, has equal importance to the vote of a knowledgeable expert. Of course, this observation is neither novel nor mine: Plato allegorized this problem in Ships of Fools metaphor way back in 375 BC. We all recognize that it’d be silly for hold the opinion of a fresh graduate (e.g., yours truly) equal to the opinion of a CEO of a multi-billion-dollar company with 3-decade tenure.
Fortunately, in a company, we faced a different set of premises. Membership status in this group is trivial to alter, and members self-selects themselves in and out of groups at will. This means that, ideally, the values and goals of each member align with that of the group and that of each other. Because (again, ideally) what’s good for the group is good for you, we can circumvent the equal representation concern, and focus on making the best decision to reach the group’s goals.
In other word, our problem is simplified. We no longer have different goals to contend with, but just how to best reach our common goal.
To do this, Ray Dalio promotes what he termed an “idea meritocracy”. You don’t go with the idea with the most vote, rather, you chose the idea with the most merit, and allow popular but otherwise unmeritorious idea to die out. So how do we know which idea is meritorious? Even when people have the exact same picture in mind, they may still disagree on how to best paint it.
Great ideas, of course, come from great people. The most qualified people for the particular job will be able to determine which ideas are meritorious. Dalio calls these people “believable people”, and termed the system in which these ideas are determined “believability-weighted decision making”. Dalio defines “believable people” to be people who
- Have a good track record in what the company is trying to decide
- Have a good explanation for their track record.
And the believability-weighted decision-making system is a system where ideas are openly and thoughtfully debated and are assessed based on their believability. How to do this is worth another article.
Note that seniority and hierarchy does not factor here; the system is designed so that only the best ideas prevail, whether it came from a new hire or the CEO herself. Furthermore, in a situation where people involved is equal in seniority and/or hierarchy (e.g., execs at big boy’s table), how much support does an idea has from each member (a democracy) is not important. What matters is that, after open and thoughtful debate, whether the believable person supports the idea.
Putting it all together, the big idea is to find people with good track record and can explain what they do, let them argue, and pick the most meritorious idea to get the best result.
That’s it. Conceptually, simple enough. Any half-decent managers will have figured this out already; it’s the implementation that got people tumbling. In many culture (societal, corporate, or otherwise), age is an approximation for believability. Lacking conscious direction and resources for decision-making process improvement, that was good enough.
But good enough is not good enough; if decision only flows top-down and flows unchecked it is inevitable someday the Emperor will forget his clothes. You, dear readers, know this to be true because you have been in situation where, with hindsight, mistakes were entirely avoidable. It felt ever more exasperating if you can tell things will go wrong before they go wrong but you are powerless to stop it. What went wrong is not merely the decision, but something more vital: the decision-making process.
Part 2 will address the execution, reiteration, and systemization of an idea meritocracy.
Catch me @ linkedin.com/in/dinhcongdat