Ray Dalio spoke at the University of Michigan Kellogg School of Management on Thursday, delivering a commencement address to graduating seniors. In it, he discussed people’s ability to adapt to changing situations.
Dalio, who is the founder and co-chairman of Bridgewater Associates, a global investment management firm, is known for giving his workers latitude to make decisions without being compelled to follow instructions from management. His “50-50 rule” — the saying that 50 percent of decisions are made by the team, 50 percent by him — has earned him the title of “king of consultants” for the past 30 years. And according to Dalio, the culture inside his company — with its emphasis on collaboration and trust — requires employees to be ready to change their minds quickly.
“In fact, if you worry, you don’t have to worry,” Dalio said during the address. “We are constantly taught that you should become used to your ‘better’ moment quickly as you need to change your plans, and use your right of all humanity to change as you need to change your plan,” he said. “There may be an issue here that we are not yet ready to handle.”
Dalio said he tends to be positive about his outlook because he learns that his optimism doesn’t come from personal successes; rather, it comes from having a “great attitude.”
“The only people I hear that say, ‘I’m scared to death of my job,’ are the ones who lose their jobs,” he said. “We shouldn’t be sad about them. We shouldn’t be scared. We should be excited. We should be optimistic.”
The second one is a fine combination of positive and pessimistic. — Ray Dalio, on the power of a positive attitude
The overall theme of Dalio’s message was the importance of teamwork and collaboration. He praised the younger generation of leaders and his prospects for the future.
“We could look at this moment in the last 15 years as really extraordinary,” he said. “We have had a generation of young leaders who have taken leadership, who have taken social change, who have had a conception of purpose and who have had great opportunities that I think was not always widespread earlier in history.”
Dalio said it was his belief that a change of focus was necessary, echoing his argument that “less people should be doing more,” and that a greater reliance on technology could lead to a reduction in office hours. His “better-not-ask-less” approach has long been unpopular at the world’s largest hedge fund, and Dalio has repeatedly been publicly criticized for not managing his people better. But he said he was committed to doing so.
“My philosophy seems pretty basic to me, which is that you should expect that there’s an issue here that we are not yet ready to handle,” he said. “There may be an issue here that we are not yet ready to handle.”
“If you have a simple question, you don’t have to spend three weeks asking it yourself,” he added. “All you have to do is ask the right questions and then you know that you know where you’re headed.”