In Humanocracy – Bureaucracy Threatens Meritocracy we shared the goal of Humanocracy to create an environment where everyone is inspired to give their best. We also provided a scorecard to grade your organization on 7 dimensions.
How do you build meritocracy in your business?
Connecticut-based Bridgewater Associates, the world’s largest hedge fund, takes a radical approach to building a meritocratic organization.
Bridgewater’s Dot Collector
In Principles, Ray Dalio describes his company as “an idea meritocracy, not an autocracy in which I lead and others follow, and not a democracy in which everyone’s vote is equal, but a meritocracy that encourages thoughtful disagreements and explores and weighs people’s opinions in proportion to their merits.”
To operationalize the notion of a meritocracy, Bridgewater developed “Dot Collector”—a real-time feedback app to give employees the opportunity to rate one another on a one-to-ten scale across more than a hundred attributes.
A typical Bridgewater associate garners more than two thousand dots annually, roughly eight per day. Senior leaders receive many times that amount. You can see your average rating across ten broad areas, such as “practical thinking,” “management skills,” and “determination.”
Dot profiles are scrutinized when making staffing decisions. Dalio’s own experience with criticism reflects his decision to create dots.
Reading Principles about the dot collector system, I was skeptical. An “always-on,” hyper transparent review process seems unnecessarily stressful.
Bridgewater’s approach highlights expertise, improves the fit between aptitude and responsibility, encourages leaders to be honest about their limits, and creates incentives for personal growth. It reduces the risk of single-rater bias. The Dot Collector is an essential tool to create an honest appraisal of individual capabilities.
Does it get results?
Bridgewater’s Secret Sauce - Results
At Bridgewater, influence is a product not of tenure or title but of an individual’s peer-attested “believability.” Dalio feels believability-based decision making … “Eliminates what I believe to be one of the greatest tragedies of mankind, and that is people arrogantly, naively holding opinions in their minds that are wrong, and acting on them, and not putting them out there to stress test them. Collective decision-making is so much better than individual decision-making if it’s done well. It’s been the secret sauce behind our success. It’s why we’ve made more money for our clients than any other hedge fund in existence and made money 23 out of the last 26 years.”
In Dalio’s forty-five years at Bridgewater, he’s never decided contrary to the believability-weighted advice of his peers, because “to do so [would be] arrogant and counter to the spirit of the idea meritocracy.” Dalio feels the risk of reverting back to positional authority is he’d, “lose both the best thinking and the best thinkers, and … be stuck with either kiss-asses or subversives who kept their disagreements and hidden resentments to themselves.”
See how the dot collector system works. It’s now available on Zoom.
Meritocracy - Getting Started
Scaling your business requires Meritocracy. The Right People, doing the Right Things, Right. To create an environment where everyone is inspired to give their best, contact us today to schedule a free exploratory meeting.
Growth demands Strategic Discipline.
Discipline sustains momentum, over a long period of time, laying the foundations for lasting endurance.
Meeting Rhythms achieve a disciplined focus on performance metrics to drive growth.
Let Positioning Systems help your business achieve these outcomes on the Four most Important Decisions your business faces:
DECISION |
RESULT/OUTCOME |
PEOPLE |
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STRATEGY |
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EXECUTION |
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CASH |
Positioning Systems helps mid-sized ($5M - $250M) business Scale-UP. We align your business to focus on Your One Thing! Contact dwick@positioningsystems.com to Scale Up your business! Take our Four Decisions Needs Assessment to discover how your business measures against other Scaled Up companies. We’ll contact you.
NEXT BLOG – Humanocracy Example – Michelin
Humanocracy provides many business examples. The Michelin story is a bottom up approach. We’ll share that story and the dramatic results next blog.