NewsUnseen events at a billionaire’s workplace: Anger sparks bathroom protocol

Unseen events at a billionaire’s workplace: Anger sparks bathroom protocol

Ray Dalio, founder and co-manager of the Bridgewater Associates fund.
Ray Dalio, founder and co-manager of the Bridgewater Associates fund.
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ed. MIW
9:13 AM EST, November 19, 2023

Ray Dalio, a billionaire and investor, runs one of the world's largest hedge funds - Bridgewater Associates. However, his unconventional approach to controlling employees has been controversial, making working at his company a challenge for many.

Ray Dalio is the founder and co-chairman of the hedge fund Bridgewater Associates. One of the largest hedge funds in the world, Bridgewater manages assets estimated at 124 trillion dollars. Dalio's fortune is approximated at nearly 15 trillion dollars.

A recent publication has shed light on the public image of Dalio, who many consider to be a market guru. The book, 'The Fund', takes readers behind the scenes at Bridgewater, revealing a less than ideal work environment and Dalio's peculiar behavior.

Ray Dalio and his 'principles': Angered by a bathroom situation

Dalio is renowned not just for his business acumen but also for his book 'Principles', a set of rules for Bridgewater employees. These principles emphasize 'radical transparency', relentless pursuit of truth, and learning from mistakes. Dalio has been known to adopt an extreme interpretation of these principles, expecting employees to potentially endure humiliation in their quest for truth.

The book recounts an incident that took place at the Bridgewater headquarter in Westport, Connecticut. Dalio, who had left a meeting to use the restroom, noticed a puddle on the floor. The book describes Dalio as being outraged by this, questioning how someone who cannot aim at the urinal can work at his company.

As detailed by the 'New York Magazine', Dalio found it hard to believe that the incident could have been accidental. One of his principles dictates that no problem is too small to address, and he invoked this to tackle the bathroom incident.

Subsequently, the staff responsible for facility maintenance was summoned by Dalio. A new procedure was implemented, with cleaning staff assigned to monitor the use of the bathroom, logging who uses it, and ensuring that the floor remained clean. New urinals were also installed, with special stickers, to facilitate better accuracy for men.

Ray Dalio and his employee evaluation 'system'

Despite these measures, the actual cause of the incident remained elusive, as highlighted in 'The Fund'. This relatively minor issue echoed around the company, adding to numerous examples of how Bridgewater strictly evaluates its employees, sometimes in peculiar ways.

Bridgewater employs a complex, multi-tiered system for evaluating employee performance, determining who merits a promotion or who needs to be let go. Dalio insists on establishing a meritocracy at his firm.

As part of this system, employees were provided with iPads and asked to rate each other several times a day based on categories like 'self-assessment ability' and 'drive for results'. Dalio personally reviews the results from this, and other, employee evaluation systems.

The intent, as stated by Dalio, is to assess employees on a universal scale. 'Credibility' is a key factor encoded into each category. For instance, if an employee is deemed credible in driving results, their ratings for others in the same category carry more weight.

Tech stars balked at Dalio’s employee evaluation system

'The Fund' also disclosed how Dalio wanted to develop a more sophisticated evaluation system using artificial intelligence. For this, he hired industry expert David Ferrucci, a key contributor to the famous IBM Watson supercomputer. Despite numerous attempts, Ferrucci couldn’t reconcile with Dalio's vision, eventually deeming it unscientific. Though Ferrucci decided to part ways, he agreed to work part-time for Dalio, in return for funding his startup Elemental Cognition.

Subsequent to Ferrucci’s semi-departure, Bridgewater hired another tech specialist, Jon Rubinstein, a former Apple employee and co-creator of the iPod. Rubinstein took on the role of co-chairman at the fund.

Rubinstein, however, soon questioned Dalio's 'principles'. In time, he confronted Dalio, arguing that his rules were more of a manual than 'principles'. Dalio dismissed Rubinstein’s perspective, suggesting he needed more time to understand his philosophy.

Rubinstein’s doubts continued to grow, particularly regarding the measurement of 'credibility'. When he sought clarification from Ferrucci, he was told that the method for measuring employee credibility was something to be 'ashamed' of. According to 'The Fund', Rubinstein concluded that there wasn't a sensible system to assess credibility and that the most highly rated employees were merely replicating Dalio's behavior.

A religion, not a system: The Bridgewater work experience

Claiming, "Ray, this is a religion," Rubinstein ended his active role at Bridgewater. His official employment lasted several more months to maintain appearances. Ferrucci persisted at the company for a few more years, juggling his fruitless project for Dalio and his startup. Eventually, he quietly left, though neither he nor the company officially admit this. Moreover, in 2021, Bridgewater dismissed most of the team working on the Dalio principles-based employee evaluation system.

This represents merely a snapshot of the incidents and narratives touched upon in 'The Fund'. The book and former employees describe the working environment at Bridgewater as toxic and nightmare inducing. This echoes the reports from 2016 stating that 20% of Bridgewater's staff depart within their first year.

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