8.7 Remember that in great partnerships, consideration and generosity are more important than money.
Someone who doesn’t have much can be more generous giving a little than a rich person giving a lot. Some people respond to the generosity while others respond to the money. You want the first type with you, and you always want to treat them generously.
When I had nothing, I was generous as I could be with people who appreciated my generosity more than the higher levels of compensation others could afford to give the. For that reason, they stayed with me. I never forgot that, and I made a point of making them rich when I had the opportunity to do so. And they in turn were generous to me in their own way when I needed their generosity most. We both got something much more valuable than money—and we got the money too.
Remember that the only purpose of money is to get you what you want, so think hard about what you value and put it above money. How much would you sell a good relationship for? There’s not enough money in the world to get you to part with a valued relationship.
8.6 When considering compensation, provide both stability and opportunity.
Pay people enough so that they’re not under financial stress, but not so much that they become fat and happy. You want your people to be motivated to perform so they can realize their dreams. You don’t want people to accept a job for the security of making a lot more money—you want them to come for the opportunity to earn it through hard and creative work.
a. Pay for the person, not the job.
Look at what people in comparable jobs with comparable experience and credentials make, add some small premium over that, and build in bonuses or other incentives so they will be motivated to knock the cover off the ball. Never pay based on the job title alone.
b. Have performance metrics tied at least loosely to compensation.
While you will never fully capture all the aspects that make for a great work relationships in metrics, you should be able to establish many of them. Tying performance metrics to compensation will help crystallize your understanding of your deal with people, provide good ongoing feedback, and influence how the person behaves on an ongoing basis.
8.5 Don’t hire people just to fit the first job they will do; hire people you want to share your life with.
Turnover is costly and inefficient because of the time it takes for people to get to know each other and the organization. Both the people you work with and the company itself will evolve in ways you can’t anticipate. So hire the kind of people you want to share a long-term mission with. You will always have uses for great people.
a. Look for people who have lots of great questions.
Smart people are the ones who ask the most thoughtful questions, as opposed to thinking they have all the answers. Great questions are a much better indicator of future success than great answers.
b. Show candidates your warts.
Show your job prospects the real picture, especially the bad stuff. Also show them the principles in action, including the most difficult aspects. That way you will stress-test their willingness to endure the real challenges.
People’s personalities are pretty well formed before they come to you, and they’ve been leaving their fingerprints all over the place since childhood; anyone is fairly knowable if you do your homework. You have to get at their values, abilities, and skills: Do they have a track record of excellence in what you’re expecting them to do? Have they done the thing you want them to do successfully at least three times? If not, you’re making a lower-probability bet, so you want to have really good reasons for doing so. That doesn’t mean you should never allow yourself or others to do anything new; of course you should. But do it with appropriate caution and with guardrails. That is, have an experienced person oversee the inexperienced person, yourself included (if you fit that description).
a. Check references.
Don’t rely exclusively on the candidate for information about their track record: Talk to believable people who know them, look for documented evidence, and ask for past reviews from their bosses, subordinates, and peers. As much as possible, you want to get a clear and objective picture of the path that they have chosen for themselves and how they have evolved along the way. I‘ve seen plenty of people who claimed to be successful elsewhere operate ineffectively at Bridgewater. A closer look often revealed that they were either not as successful as they portrayed themselves or they got credit for others’ accomplishments.
8.3 Think of your teams the way that sports managers do: No one person possesses everything required to produce success, yet everyone must excel.
Teams should operate like those in professional sports, where different skills are required to play different positions. Excellence in each is mandatory, the success of the mission is uncompromisable, and members that don’t measure up may need to be cut. When teams operate with such high standards and shared values, extraordinary relationships are likely to develop.
8.2 Remember that people are built very differently and that different ways of seeing and thinking make people suitable for different jobs.
Some ways of thinking will serve you well for some purposes and serve you poorly for others. It is highly desirable to understand one’s own and others’ ways of thinking and their best applications. Some qualities are more suitable for some jobs. For example, you might not want to hire a highly introverted person as a salesman. That’s not to say an introvert can’t do that job; it’s just that a gregarious person is likely to be more satisfied in the role and do a better job.
If you’re not naturally good at one type of thinking, it doesn’t mean you’re precluded from paths that require it. It does, however, require that you either work with someone who has that required way of thinking (which works best) or learn to think differently (which is difficult or even impossible).
When building a “machine,” design precedes people because the type of people you will need will depend on the design. As you design, create a clear mental image of the attributes required for each person to do their job well. It is futile to give responsibilities to people who do not have the qualities required to succeed. It frustrates, and inevitably angers, all parties, which is damaging to the environment.
In order to match a person to the design, start by creating a spec sheet so that there will be a consistent set of criteria that can be applied from recruiting through performance reviews. Bridgewater‘s spec sheets use the same bank of qualities as our Baseball Cards.
Don’t design jobs to fit people; over time, this almost always turns out to be a mistake. This often happens when someone you are reluctant to let go doesn’t work out, and there is an inclination to try to find out what else that person can do. Frequently managers fail to be objective about their own strengths and weaknesses, and put themselves into roles that they’re not a click for.
Most people see the things around them without considering the forces that created them. In most cases those forces were specific people with specific qualities who worked in specific ways. Change the people and you change how things develop; replace creators with noncreators and you stop having creations.
People tend to personify organizations (“Apple is a creative company”) while mistakenly depersonalizing their results, thus losing sight of who did what to produce them. That’s misguided because companies don’t make decisions—people do.
So who are the people in your organization behind the results and culture that make it special? Think about who they are and how they work together to make it what it is.
