The power of criticism why surrounding yourself with people who disagree with you is the key to long-term success

The power of criticism why surrounding yourself with people who disagree with you is the key to long-term successThe power of criticism why surrounding yourself with people who disagree with you is the key to long-term successIn 1975, Ray Dalio- a bullish 26-year-old trader- started a small advisory firm calleuchtdiode Bridgewater Associates, out of his two-bedroom Manhattan apartment.At first, Dalio had zero clientele and worked with a small team consisting of his close friend and an assistant. But shortly afterward, the business took off rapidly.Follow Ladders on FlipboardFollow Ladders magazines on Flipboard covering Happiness, Productivity, Job Satisfaction, Neuroscience, and moraBy the late 1970s, Dalios publication called the Daily Observations, became the go-to-market research report for major organizations, including Nabisco and McDonalds, and by August 1982, Dalio was hailed as a market wizard for predicting Mexicos default. 1As his fame and reputation grew, Dalio found hims elf increasingly surrounded by yes-men, with no one to challenge his radical ideas. And so, in November 1982, Dalio appeared on Wall Street Week with Louis Rukeyser- the most reputable financial news program at the time- and publicly declared that the United States was heading for a depression.He was dead wrong. The United States economy rebounded and enjoyed a much higher satz of growth than ever before.Meanwhile, Bridgewater Associates nearly went bankrupt, and Dalio was forced to lay off all of his employees, including his close friends. 2Distraught and defeated, Dalio began to reflect on the mistakes and bad decisions that led to his mighty downfall. It was during these moments of introspection, that he asked himself a powerful question that would radically transform his life How do I know Im right?Inspired by his eureka moment, Dalio resolved to rebuild Bridgewater on the foundation of a culture that seeks to answer this question.Today, Bridgewater Associates is regarded as the most successful hedge fund in the world- managing over $160 billion in assets. And Dalio has amassed a net worth of about $17 billion, which ranks him as one of the worlds top 100 wealthiest people.Even though he is often praised for his financial acumen, Dalio credits Bridgewaters long-term success to one simple idea that emerged whilst solving the puzzle of the thought-provoking question he reflected upon in his earlier years.The idea is called Radical TransparencyAccelerated Learning, Innovation and Radical Transparencyunternehmensverbund wrong opinions in ones head and making bad decisions based on them instead of having thoughtful disagreements is one of the greatest tragedies of mankind.? Ray DalioOne morning, Dalio received a scathing email from his employee, Jim Haskell. It readRay you deserve a D- for your performance today in the meeting you did not prepare at all because there is no way you could have and been that disorganized. In the future, I/we would ask you to tak e some time and prepare and maybe even I should come up and start talking to you to get you warmed up or something but we cant let this happen again. If you in any way think my view is wrong, please ask the others or we can talk about it. 3The majority of senior executives- talkless of a billionaire like Ray Dalio- would have fired Haskell on the spot for sending this email. Dalio however, was so pleased with it, that he circulated the email internally within Bridgewater.In his book,Principles Life and Work(Audiobook), Dalio elaborates on this idea of Radical TransparencyRadical open-mindedness and radical transparency are invaluable for rapid learning and effective changeThe mora open-minded you are, the less likely you are to deceive yourself- and the more likely it is that others will give you honest feedbackIt can also be difficult because being radically transparent rather than more guarded exposes one to criticism. Its natural to fear that. Yet if you dont put yourself out the re with your radical transparency, you wont learn.At Bridgewater, no employee has the right to hold a critical opinion without speaking about it. In fact, its a sackable offense to do so.The majority of meetings are videotaped all employees can review the recordings and share public feedback on the participants.Outside of meetings, Bridgewater staff are obliged to rate one anothers performances and Baseball Cards publicly reveal each individual employees strengths and weaknesses based on feedback. 4This type of Radical Transparency is the driving force behind the philosophy of idea meritocracy- the encouragement of thoughtful disagreements and the promotion of a culture where the best ideas win out.It may come as a surprise to learn that the most innovative companies in the world are also built on this philosophy.For example, whilst working as the Executive Chairman of Google, Eric Schmidt built upon the existing culture of open criticism of ideas regardless of hierarchy, which led to innovations like Gmail, Adsense and google maps. 5In the same breath, the innovative media company, Netflix, encourages employees to give one another blunt feedback, and openly shares all employees salaries to executives director-level and above.6The idea of Radical Transparency may seem like a harmful practice, but research has shown that avoiding criticism- instead of embracing it- leads to bad decision-making, poor performance, and failure.For example, one study discovered that whilst a firm undergoes poor performance, the Chief Executive Officers (CEOs) tend to seek comfort and advice from like-minded executives of other firms, and avoid receiving feedback from critics outside their social circle.7This avoidance of criticism inhibits the organizations ability to change corporate strategy, leading to organizational decline and a downward spiral in performance.Another study conducted by Francesca Gino, Professor at Harvard Business School, highlighted an employees tendency to d rop relationships with people who provide feedback that is more negative than their view of themselves and surround themselves with people who reaffirm their positive traits. 8Ironically, the study discovered that employees who avoided criticism performed much worse in the subsequent year than those who refrained from confirmation-seeking behavior.By avoiding criticism and running towards praise, we fail to see the pitfalls that lead to our downfall because our greatest weaknesses are often the opposite of our greatest strengths.Avoid Criticism at Your PerilEvery time you confront something painful, you are at a potentially important juncture in your life- you have the opportunity to choose healthy and painful truth or unhealthy but comfortable delusion.? Ray DalioConventional wisdom suggests that success is the by-product of surrounding ourselves with positive people who cheer us along and support our ideas.But this doesnt hold up to close scrutiny, in fact, the opposite is more li kely to be true surrounding yourself with smart people who disagree with you will improve your odds of success.The irony of criticism is that the more we run away from critics and towards cheerleaders, the more delusional we become about our strengths and weaknesses, and the less likely well succeed.And more times than not, our biggest critics open the door to crucial opportunities to learn, improve and make better decisions.Several years after the near bankruptcy of Bridgewater, Ray Dalio said hed learned that no matter how confident I was in making anyone bet I could still be wrong.His idea of Radical Transparency is driven by a genuine worry that you may be blindsided bycognitive biasesthat lead to bad decision-making.Its an acknowledgment of the reality of dialogue between two people with conflicting views someone is less wrong than the other, and it pays to find out if that someone isnt you.When you canleave your ego outside the doorand give room for open criticism, your focus and energy shifts towards what matters most. That is, being right (even if it doesnt come from you).Next time youre faced with criticism and negative feedback, remember the thought-provoking question that launched Dalios long-term success with BridgewaterHow do I know Im right?Mayo Oshin writes at MayoOshin.com, where he shares practical ideas at the intersection of science, art, and philosophy, for better thinking and decision-making. You can join his free weekly newsletter here.A version of thisarticleoriginally appeared atmayooshin.comas The Power of Criticism Why Surrounding Yourself With People Who Disagree With You Is the Key to Long-Term Success.FOOTNOTES1. Dalio helped McDonalds reduce its price risk, which led to the creation of the McNugget in 1983.2. Dalio was so broke that he had to borrow $4,000 from his father to take care of his family and pay the bills.3.Ray Dalios Ted talk4. As an example, Kiran Rao, a manager at Bridgewater, was declared as the companys worst manag er in front of 200 of his colleagues.5. Eric Schmidts Master of ScaleInterview.6. Wall Street Journalarticle.7.Getting by with the Advice of Their Friends CEOs Advice Networks and Firms Strategic Responses to Poor Performance. Michael L. McDonald and James D. Westphal. Administrative Science Quarterly. Vol. 48, No. 1 (Mar., 2003), pp. 1-328. Green, P., Gino, F., Staats, B. (2017).Shopping for Confirmation How Disconfirming Feedback Shapes Social Networks. Harvard Business School Working Paper, No. 18-028.You might also enjoyNew neuroscience reveals 4 rituals that will make you happyStrangers know your social class in the first seven words you say, study finds10 lessons from Benjamin Franklins daily schedule that will double your productivityThe worst mistakes you can make in an interview, according to 12 CEOs10 habits of mentally strong people