Tag Archives: meritocracy

Did Reader’s Digest Flunk Its Own Trust Test?

It Pays to Get a Second Opinion

…and I have a highly rated TV show.

In an effort to goose newsstand sales, the June issue of Reader’s Digest features a cover story entitled, “The 100 Most Trusted People in America Today.” Although the article’s “most trusted” claim is far from trustworthy (in fact, 1,000 people voted on 200 American “opinion shapers and headline makers” that Reader’s Digest had pre-selected), there are some quirky results worth noting.

According to the survey:

  • Americans trust doctors, especially if they’re on TV. For example, Dr. Oz (#16) and Sanjay Gupta (#17) outscored respected medical authors Andrew Weil (#75) and Deepak Chopra (#92).
  • Americans also trust TV judges, such as Judge Judy (#28) and Judge Joe Brown (#39), more than they do real-life Supreme Court judges, including Sam Alito (#60) and Elena Kagan (#62).
  • Some strange relative rankings include: Johnny Depp (#35) who outscored Oprah Winfrey (#59), Billy Graham #67) and Condoleezza Rice (#68);  and Adam Sandler (#64) who edged out Barack Obama (#65), but both were far behind Michelle Obama (#19).
  • The top four people on the list are all actors: Tom Hanks, Sandra Bullock, Denzel Washington and Meryl Streep. At the bottom of the 200 candidates were celebrities with damaged brands, including Lance Armstrong and Kim Kardashian.
  • In addition to its untrustworthy headline, Reader’s Digest fesses up in the article that its editors had removed the three highest scorers from its Top 100 list, which were “your own doctor” (77%), “your own spiritual advisor” (71%) and “your own child’s current teacher” (66%).
  • Given 15 categories, the most trusted professions were 1. Doctors, 2. Teachers, 3. Movie Stars, 4. Philanthropists, and 5. Spiritual Leaders. Not surprisingly, Business Leaders and Financial Experts were ranked 11th  and 12th, respectively, just ahead of Politicians and Political Pundits.
  • Only 6 active business leaders made the Top 100 list, and all near the tail end, led by Warren Buffett (#71), Amazon’s Jeff Bezos (#78), Alex Gorsky of J&J (#86), Ken Powell of General Mills (#93), Steve Balmer of Microsoft (#94) and Steve Forbes of Forbes Media (#97).

Celebrity publicists will likely use these ranking to justify image overhauls for their low-scoring clients. But Reader’s Digest’s “Top 100 Most Trusted People” ranking really only validates America’s low-brow pop culture, and does not fairly reflect the integrity or character of any one of the 200 people on its arbitrary list.

In addition to “integrity and character,” Reader’s Digest asked its poll takers to rank the trust levels of its 200 candidates in terms of “exceptional talent and drive, internal moral compass, message, honesty and leadership.” But it’s an impossible task to rank someone on any of those criteria, unless you have first-hand experience with that individual over a long period of time.

Here are some the criteria this writer uses to measure trustworthiness of people, regardless of their profession or position of authority:

  1. DO THEY WALK THE TALK? I trust people who make good on their promises. And if they can’t deliver, they’re pro-active about explaining why they failed to meet your expectations.
  2. ARE THEY TRANSPARENT? Trustworthy people have no hidden agendas. Yes means yes, and no means no…which translates into no unpleasant surprises.
  3. DO THEY FOLLOW THE GOLDEN RULE? I trust people who treat a waiter in a restaurant, or the person cutting their lawn, with the same level of courtesy and respect they would display with their boss, or a prospective client.
  4. ARE THEY FAIR? Trustworthy people always explain the rules of the game, don’t play favorites, and base recognition and rewards on a meritocracy.

What are some of the criteria you apply to determine if an individual (or an organization) is worthy of your trust?

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5 Secrets to Ray Dalio’s Hedge Fund Success

Hedge Fund Craftsmanship

By most measures, Ray Dalio has achieved great success during his 65 years on earth. Unlike Donald Trump, Dalio didn’t inherit wealth. As a middle-class kid, he delivered newspapers, shoveled snow and was a caddy during the summer. The company Dalio established in his apartment in 1975, Bridgewater Associates, is currently the world’s largest and most successful hedge fund manager, with more than $87 billion in assets under management. Recently, Dalio was ranked by FORBES as the 30th wealthiest person in America, and the 69th wealthiest person on the planet, with a personal net worth of $15.2 billion.

So in a highly competitive landscape populated with nearly 10,000 hedge funds, how has Bridgewater been able to rise to the top of the investment management world and remain there? It’s unlikely that Dalio and his team know more about the markets, across every asset class, than all other hedge fund managers. It’s unlikely that Dalio simply has had a luckier hand in the bets he’s placed over the past 4 decades. And it’s also unlikely that Dalio has sold his soul to the devil.

In fact, Dalio makes no secret about Bridgewater’s success, and it’s articulated in great detail on his firm’s website. Dalio even provides a “Principles” playbook that you can download.

Briefly, here are 5 “secrets” to Dalio’s success:

He’s built a values-based organization – Dalio understands that Bridgewater’s ability to get 1,200 smart people to sing from the same songsheet requires clarity and consistency on what his company stands for, what it’s trying to achieve, and how it intends to get there. His belief system is based on the concept of “radical transparency,” which encourages employees to question everything, to think for themselves and to speak up.

He works ON his business, not AT his business – Dalio understands that intellectual capital, enterprise experience and operational systems & processes must be captured, documented and integrated into the day-to-day decision-making of a firm. Like Ray Kroc, Dalio has invested great thought and effort to create an organization with intrinsic value that does not rely on him, or on any individual, for its continued success. In Bridgewater, he has created the McDonald’s of investment management.

He has no patience for ego or emotion – Dalio understands how personal agendas and corporate politics can destroy any organization. He has been relentless in his efforts to remove ego barriers and emotional reactions in Bridgewater’s decision-making process. Institutional and personal transparency is the cornerstone of Bridgewater’s corporate culture. Some employees who’ve found it difficult to survive under such a high level of scrutiny either drop out or are invited to leave, providing the firm with a very effective natural selection process.

He’s focused on the importance of mistakes – Dalio understands that corporate arrogance is the most significant potential liability for successful companies. Because he believes anyone can be wrong, the Bridgewater culture views mistakes as opportunities to learn, rather than something to be avoided. FBI Director James Comey, who once served as Bridgewater’s general counsel, described the firm’s “obsession over doubt” as an asset that drives constant improvement and reduces the chances of bad decisions being made.

He’s not motivated by money – Dalio has been wealthy for a long time, but being wealthy was never his primary goal. In his own words, “I started Bridgewater from scratch, and now it’s a uniquely successful company and I am on the Forbes 400 list. But these results were never my goals—they were just residual outcomes—so my getting them can’t be indications of my success.  And, quite frankly, I never found them very rewarding. What I wanted was to have an interesting, diverse life filled with lots of learning—and especially meaningful work and meaningful relationships. I feel that I have gotten these in abundance and I am happy.”

The corporate tag line describing Bridgewater Associates is aptly titled “A Different Kind of Company.” And Dalio is a different kind of American businessman. Unlike Apple’s Steve Jobs, who managed by arrogance, fiat and intimidation, Dalio has created a meritocracy that’s based on honesty, clear thinking and humility.

Bridgewater doesn’t produce clever electronic gadgets or software apps designed to entertain us or make our lives easier. Dalio’s greatest achievement is unrelated to the wealth he’s created for himself or for his institutional investor clients. Dalio’s most valuable and enduring accomplishment is based on his role as the architect of an organizational management model that can radically improve the world of work, as well as the lives of people who seek personal meaning through their work.

Unfortunately, most companies – regardless of industry – don’t have the courage or the desire to adopt Dalio’s brutally honest management approach. That’s why Bridgewater is likely to be the most world’s successful hedge fund manager for a very long time.  True hedge fund craftsmanship.

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