Don’t we all love Awards? Certainly there are plenty prices given for all kinds of accomplishments: there is the “Topman van het jaar Award” – although some of them ran into a world of trouble shortly after receiving this Award (like Ad van Wijk and Cees van der Hoeven). Then we have the CIO of the Year Award (as well as the Outsourcing Award and the Innovation Award), the CFO of the Year (as well as the Controller of the Year Award), and a whole lot of more specific prices for M&A success, Retail accomplishments, Credit Management, the Henri Sijthof price for the best financial reporting and many, many more.
What is behind all these Awards?
People like competitions, shortlists, ratings, averages, winners, losers. It makes business look like a sport. It brings people together, gives them something to talk about: it creates a network. The network is an interesting platform for sponsors with something to sell. It is good marketing.
Come to think about it, I have two problems with all these prices:
- They all suggest that there is an individual responsible for some form of corporate success. This is never the case. The only sensible Award would be the ExCom of the Year Award, where an entire Executive Committee is judged on both Strategy and Execution, on how they work together, and what kind of Leadership they demonstrate.
- A network that spends too much time on Awards, and on the wining and dining can be a very interesting platform to strengthen the social ties, but might miss the opportunity of facilitating real exchange of ideas and knowledge.
The second point is interesting: online and physical networks provide an enormous opportunity to exchange information and learn something, but most are lacking the ambition to share content. It is more about who knows who, about visibility rather than credibility. Of course, that is not necessarily what sponsors or advertisers want to do. They are usually still more interested in broadcasting their message, or pitching their product, rather than in interacting with a group of peers. Who than will pay for these network or these network events to operate?
I am not sure, but maybe the trick is to decouple the content from the sponsor, like TED is doing. Yes, there are sponsors, but no, they have no influence on the content, which is of extremely high quality. This could also be the model for multi media publishing companies like FD Media Group, or even ICT Media, CFO Media. Focus on the quality of the content, identify the themes the audience is interested in hearing about and contributing to, and they will all come, participate, visit your site, buy your newspaper of magazine, or listen to your radio station. If relevant people are confident enough to share their knowledge, their dreams, their successes, but also their failures and uncertainties you will have an interested audience, which attracts sponsors and advertisers.
So radical transparency once again is the recipe for success.
Talking about radical, about transparency in relation to the first issue I mentioned (how a group of executives work together to achieve their goals): have a look at the Bridgewater Principles.
Bridgewater is an investment company that manages approximately $125 billion in global investments for a wide array of institutional clients. Bridgewater, which has a 36-year history, has been recognized as a top-performing manager and an industry innovator, and is by now the largest and best-performing hedge fund manager in the world.
It is widely claimed (also by the company management) that these results are a product of its unique culture. Truth and excellence are valued above all else.
Ray Dalio, who founded the company has written a set of principles that all employees in the company are supposed to use as the guiding principles, in life and work. They are very interesting, a bit scary, and sometimes entertaining, if you have the patience to read all 123 pages. More than radical transparency it also is hyper realism. No politics, no bullshit, just say it as it is. And they do.
Management meetings and individual reviews are recorded, and if they think anyone should learn something from such a recording, it is sent to all staff. These recordings usually involve the individual getting shredded publicly. Everyone is encouraged to given open and honest feedback so meetings often resort to public shaming and the demolition of people.
Some of the Principles:
Truth – more precisely, an accurate understanding of reality – is the essential foundation for producing good outcomes. That defines the next step: all things “good” must be grounded in reality. And then: While most other seem to believe that pain is bad, I believe that pain is required to become stronger.
It all sounds a bit like corporal punishment and a level of cruelty you rarely see. It think Ray Dalio would agree:
Be the Hyena. Attack that wildebeest.
For example, when a pack of hyenas takes down a young wildebeest, is that good or evil? At face value, that might not be “good” because it seems cruel, and the poor wildebeest suffers and dies. Some people might even say that the hyenas are evil. Yet this type of apparently “cruel” behavior exists throughout the animal kingdom. Like death itself it is integral to the enormously complex and efficient system that has worked for as long as there has been life. It is good for both the hyenas who are operating in their self-interest and the interest of the greater system, including those of the wildebeest, because killing and eating the wildebeest fosters evolution (i.e., the natural process of improvement). In fact, if you changed anything about the way that dynamic works, the overall outcome would be worse.
Bridgewater also operates consistently with the belief that to be excellent and improve at a fast rate, we must be hyperrealistic and hypertruthful. We therefore need to overcome any impediments to being realistic and truthful.
Then, Mr. Dalio continues with 210 principles, some of which are:
To get the culture right:
1. Trust in Truth
4. Be extremely open
5. Have integrity (meaning you only say what you mean, regardless of how it is perceived) and demand it from other (never say anything about a person you wouldn’t say to them directly; – I guess just to be sure – Don’t let “loyalty stand in the way of truth and openness
6. Be radically transparent (we saw that one coming)
7. Don’t tolerate dishonesty
8. Create a culture in which it is ok to make mistakes but unacceptable not to identify, analyze, and learn from them
14. Get over “blame” and “credit” and get on with “accurate” and “inaccurate”
15. Don’t de personalize mistakes
26. Recognize that conflicts are essential for relationships because they are the means by which people determine whether their principles are aligned and resolve their differences
31. Ask yourself whether you have earned the right to have an opinion. As a general rule, if you have a demonstrated track record, than you can have an opinion on how to do it. If you don’t, you can’t, though you can have theories and ask questions. Oh and I like this one: Everyone should be upfront in expressing how confident they are in their thoughts. A suggestion should be called a suggestion; a firmly held conviction should be presented as such. Don’t make the mistake of being a dumb shit with a confident opinion
To get the people right
52. Hire right, because the penalties of hiring wrong are huge
54. Weigh values and abilities more heavily than skills in deciding whom to hire
59. Don’t hire people just to fit the first job they will do at the
100. Evaluate People accurately, not kindly
130. Know that it is much worse to keep someone in a job who is not suited for it than it is to fire someone
132. Do not lower the bar
and then 78 more principles on how to perceive, diagnose, and solve problems, and on how to make decisions effectively.
It has lots of characteristics of a religious cult, but still, I hate to admit it, you have to respect this guy.
I will increase my daily dose of red pills.