13.10 Have the clearest possible reporting lines and delineations of responsibilities.
This applies both within and between departments. Dual reporting causes confusion, complicates prioritization, diminishes focus on clear goals, and muddies the lines of supervision and accuntability—especially when the supervisors are in two different departments. When situations require dual reporting, managers need to be informed. Asking someone from another department to do a task without consulting with his or her manager is strictly prohibited (unless the request will take less than an hour or so). However, appointing co-heads of a department or a sub-department can work well if the managers are in sync and combine complementary and essential strengths; dual reporting in that case can work well if properly coordinated.
a. Assign responsibilites based on workflow design and people’s abilities, not job titles.
Just because someone is responsible for “Human Resoures,” “Recruiting,” “Legal,” “Programming,” and so forth, doesn’t necessarily mean they are the appropriate person to do everything associated with those functions. For example, though HR people help with hiring, firing, and providing benefits, it would be a mistake to give them the responsibility of determining who gets hired and fired and what benefits are provided to employees.
b. Constantly think about how to produce leverage.
Leverage in an organization is not unlike leverage in the markets; you’re looking for ways to achieve more with less. At Bridgewater, I typically work at about 50:1 leverage, meaning that for every hour I spend with each person who works for me, they spend aobut fify hours working to move the project along. At our sessions, we go over the vision and the deliverables, then they work on them, and then we review the work, and they move forward based on my feedback—and we do that over and over again. The people who work for me typically have similar relationships with those who work for them, though their ratios are typcially between 10:1 and 20:1. I am always eager to find people who can do things nearly as well as (and ideally better than) I can so that I can maximize my output per hour.
Technology is another great tool for providing leverage. To make training as easy to leverage as possible, document the most common questions and answers through audio, video, or written guidelines, and then assign someone to organize them and incorporate them into a manual, which is updated on a regular basis.
Principles themselves are a form of leverage—they’re a way to compound your understanding of situations so that you don’t need to exert the same effort each time you encounter a problem.
c. Recognize that it is far better to find a few smart people and give them the best technology than to have a greater number of ordinary people who are less well equipped.
Great people and great technology both enhance productivity. Put them together in a well-designed machine and they improve it exponentially.
d. Use leveragers.
Leveragers are people who can go from conceptual to practical effectively and do the most to get your concepts implemented. Conceptualizing and managing takes only about 10 percent of the time needed for implementing, so if you have good leveragers, you can devote a lot more of your time to what’s most important to you.
* Source: Principles by Ray Dalio