9.7 Knowing how people operate and being able to judge whether that way of operating will lead to good results is more important than knowing what they did.
Knowing what people are like is the best indicator of how well they are likely to handle their responsibilities in the future. At Bridgewater, we call this “paying more attention to the swing than the shot.” Since good and bad outcomes can arise from circumstances that might not have had anything to do with how the individual handled the situation, it is preferable to assess people based on both their reasoning and their outcomes. I probe their thinking in a very frank way so as not to let them off the hook. Doing this has taught me a lot about how to assess others’ logic, and how to have better logic myself. When both the outcomes and the thinking behind them are bad, and when this happens a number of times, I know I don’t want them to do that type of thinking anymore.
For example, if you’re a poker player and you play a lot of poker, you will win some hands and lose others and on any given night you might walk away with less money than a lesser player who’s gotten lucky. It would be a mistake to judge the quality of a player based on just one outcome. Instead, look at how well someone does what they do and the outcomes they produce over time.
9.6 Make the process of learning what someone is like open, evolutionary, and iterative.
Articulate your assessment of a person’s values, abilities, and skills up front and share it; listen to their and others’ responses to your description; organize a plan for training and testing; and reassess your conclusions based on the performance you observe. Do this on an ongoing basis. After several months of discussions and real-world tests, you and your report should both have a pretty good idea of what he or she is like. Over time this exercise will crystallize suitable roles and appropriate training or it will reveal that it’s time for the person to find a more appropriate job somewhere else.
a. Make your metrics clear and impartial.
To help you build your perpetual motion machine, have a clear set of rules and a clear set of metrics to track how people are performing against those rules—and predetermined consequences that are determined formulaically based on the output of those metrics.
The more clear-cut the rules are, the less arguing there will be about whether someone did something wrong. For example, we have rules about how employees can manage their own investments in a way that doesn’t conflict with how we manage money for clients. Because these rules are clear-cut, there’s no room for argument when a breach occurs.
Explore them openly with the goal of figuring out how you and your people are built so that the right people can be put in the right jobs.
a. Build your synthesis from the specifics up.
By synthesizing, I mean converting a lot of data into an accurate picture. Too many people make assessments of people without connecting them to specific data. When you have all the specifics that we have at Bridgewater—the dots, meeting tapes, etc.—you can and must work from the specifics up and see the patterns in the data. Even without such tools, other data such as metrics, testing, and the input of others can help you from a more complete picture of what the person is like, as well as examine what they did.
b. Squeeze the dots.
Every observation of a person potentially tells you something valuable about how they operate. As I explained earlier, I call these observations “dots.” A dot is a piece of data that’s paired with your inference about what it means—a judgment about what someone might have decided, said, or thought. Most of the time we make these inferences and judgments implicitly and keep them to ourselves, but I believe that if they are collected systematically and put into perspective over time, they can be extremely valuable when it’s time to step back and synthesize the picture of a person.
9.4 Recognize that tough love is both the hardest and the most important type of love to give (because it is so rarely welcomed).
The greatest gift you can give someone is the power to be successful. Giving people the opportunity to struggle rather than giving them the things they are struggling for will make them stronger.
Compliments are easy to give but they don’t help people stretch. Pointing out someone’s mistakes and weakness (so they learn what they need to deal with) is harder and less appreciated, but much more valuable in the long run. Though new employees will come to appreciate what you are doing, it is typically difficult for them to understand it at first; to be effective, you must clearly and repeatedly explain the logic and the caring behind it.
a. Recognize that while most people prefer compliments, accurate criticism is more valuable.
Nobody ever said radical honesty was easy. Sometimes, especially with new employees who have not yet gotten used to it, an honest assessment feels like an attack. Rise to a higher level and keep your eye on the bigger picture and counsel the person you are evaluating to do the same.
a. In the end, accuracy and kindness are the same thing.
What might seem kind but isn’t accurate is harmful to the person and often to others in the organization as well.
b. Put your compliments and criticisms in perspective.
It helps to clarify whether the weakness or mistake under discussion is indicative of a trainee’s total evaluation. One day I told one of our new research people what a good job I thought he was doing and how strong his thinking was. It was a very positive initial evaluation. A few days later I heard him chatting away at length about stuff that wasn’t related to work, so I warned him about the cost to his and our development if he regularly wasted time. Afterward I learned that he thought he was on the brink of being fired. My comment about his need for focus had nothing to do with my overall evaluation. Had I explained myself better when we sat down that second time, he could have put my comment into perspective.
Most training comes from doing and getting in sync about performance. Feedback should reflect what is succeeding and what is not in proportion to the actual situation, rather than in an attempt to balance compliments and criticisms. Remember that you are responsible for achieving your goals, and you want your machine to function as intended. For it to do so, the employees you supervise must meet expectations, and only you can help them understand whether they are stacking up. As their strengths and weaknesses become clearer, responsibilities can be more appropriately tailored to make the machine work better and to facilitate personal evolution.
9.1 Understand that you and the people you manage will go through a process of personal evolution.
No one is exempt from this process. Having it go well depends on people’s abilities to make frank assessments of strengths and weaknesses (most importantly weaknesses). While it’s generally as difficult for managers to give this feedback as it is for their subordinates to hear it, in the long run it makes people happier and the organization more successful.
a. Recognize that personal evolution should be relatively rapid and a natural consequence of discovering one’s strengths and weaknesses; as a result, career paths are not planned at the outset.
The evolutionary process is about discovering people’s likes and dislikes as well as their strengths and weaknesses; it occurs when people are put into jobs they are likely to succeed at, but in which they have to stretch themselves. Each person’a career will evolve based on what we all learn about what the person is like.
8.8 Great people are hard to find so make sure you think about how to keep them.
Make sure you’re following the suggestions made earlier, like building meaningful relationships and constantly getting in sync. Most importantly, you have to encourage people to speak up about how things are going for them. Ensuring that their personal development is proceeding appropriately is important too. Close advice from an active mentor should last at least one year.
