Dalio Says His Principles Useful In The Board Room Or. The White House

(MENAFN- ValueWalk)

In a political system where people are increasingly intolerant of opposing viewpoints, Ray Dalio's 'Principles'. In a book of the same title released September 19, 'idea meritocracy' that involves ' radical transparency ' in looking at and searching for opposing viewpoints to assist in decision-making. These broad concepts can apply to how the White House is managed just as it could to the corporate boardroom, he told ValueWalk in an interview conducted on October 2nd, 2017 ).

Source: Screen capture

In an idea meritocracy the best, most well-thought-out ideas prevail. To get to this state of efficiency, Dalio prizes a of well-reasoned ideas with the goal to come to a consensus. 'It's about independent thinking, everyone putting their honest thoughts on the table; knowing how to have a thoughtful disagreement. This is an idea meritocracy,' he said.

The White House, in general, could benefit from such an approach, he said, noting that his comments were not specifically pointing to the Trump administration.

Dalio said that when applying radical transparency and 'the Principles' on top of a White House decision-making process or in a corporate boardroom, the first question relates to the size of the radical transparency circle. In this circle, absolute truth should be the goal even if facts disagree with a leader's perspective. 'It might be just the President and a small group of trusted advisors,' or that circle of radical transparency might extend to cabinet officers, top management or in a corporate setting the board of directors, he said.

'In order for an excellent process to work, you need to have people that will disagree with you,' Daili said, consistently noting that tolerance for opposing viewpoints was critical to successful outcomes.

Once the Radical Transparency circle has been established, this decision-making involves three primary steps:

• Putting honest thoughts on the table from all perspectives, particularly those one disagrees with
• Recognizing how thoughtful and respectful disagreement occurs
• Engaging in the art of thoughtful discussion with the goal to get past disagreements.

Making decisions isn't just about the act of deciding, but determining who might be the best decision maker. 'The best decisions may not come from the US president,' he said, noting that those with domain expertise might be better chosen to make decisions than the President.

Bridgewater uses a systematic process to help evaluate who in a discussion are making the best contributions, which contributes to a "believability" rating. For deliberative processes that take place, Bridgewater has systematized a decision-making process into a ' tool. A week after the US election, for instance, the Bridgewater research team discussed the potential implications of a Trump election on the economy where those involved rated the ideas of other people. The process helps people assess their own opinions and see them from a higher level, but it also requires the ability to accept criticism in public. It is this public delivery of critical information and opposing viewpoints which Dalio has said is critical to achieving the goal of an idea meritocracy.

All viewpoints don't have the same weighting. When considering the impact of central bank policy, for instance, the majority of people voted one way, but when the computer weighed the results based on people's merits, or believability, the results were entirely different.

The notion of how to achieve decision-making success comes from an open-minded approach, but as well writing down the principles and decision process steps results in 'magical things happening,' he said. Assessing issues using clear, documented processes leads to a level-headed assessment of potential outcomes. It is from this work that group decisions can be made.

The ultimate goal of radical transparency is to bring people together, which should be a key goal that can be accomplished by clearly defining uniting concepts. These uniting divergent participants after a decision has been made is critical to Dalio.

'Society needs to respect the process of thoughtful discussion of issues that leads to resolution of a disagreement,' he said. 'We have established rules that everyone must respect. In this country we generally recognize that the popular vote does not elect a president, it is the electoral vote.' After societal decisions are made, the society needs to accept it and move forward, while working to bring people together.

'If I'm dealing with the country as a whole it is very important for the President of the US to state our shared principles,' Dalio said. 'We need to know the principles that bind us together.'

As he looks across today's political panoply, Dalio is worried. He cites high that was generally ignored by one side of the recent US presidential campaign. "40% of this country are doing great. The other 60%, the majority, are not," he observed, saying that the political situation won't improve unless it is first addressed in an open and honest environment.

The world needs radical transparency and tolerance for divergent thought to advance, Dalio proclaims, as the current are decidedly going in the opposite direction. One measure of success for his book is not just bestseller status – it shot to #3 on Amazon's bestseller list the day of its launch. But success might also be found in the acceptance of larger concept in Principles: listening to divergent viewpoints, searching for voices that disagree with an opinion and working to unite a diverse society.

In our next article: From Radical Transparency to converting human thought into an algorithmic decision-making process the Bridgewater way

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