Principles

Successful organizations will seek to find alignment between what they want to achieve and what they are actually achieving. Dalio describes once receiving an email from his subordinates that critically outlined his shortcomings as a manager. Realizing that he had faults was painful, but Dalio accepted the criticism and took it as a call to improve.

Dalio recommends that organizations not flee from hard questions and difficult topics because they fear conflicts. He urges readers to think of conflicts as “essential” because they are how people realize whether or not they are aligned and can start to resolve differences. He does think that substantive criticism can be distinguished from complaints by its being “open-minded and assertive at the same time” (362). Recognizing that people have differences in how they communicate can make it easier to hear and accept criticisms without seeing them as personal attacks.

Dalio suggests that organizations manage conversations, allowing for open debate when possible. He suggests that leaders weigh the costs and benefits of hearing people’s opinions and offers some practical tips. For example, he suggests using a “two-minute rule” of uninterrupted time to let people speak, while also watching out for people who have a tendency to dominate conversations or steer conversations off course.