Idea meritocracy

Was listening to this awesome podcast from the Knowledge Project (of Farnam Street fame) with Ray Dalio, where he talks about idea meritocracy. Found it fascinating. Such clarity in thought.

“There are two things that one needs to do to be successful in anything. 1) Take the right decisions, and 2) Have the courage to execute on these decisions.”

Ray, then talks about how he makes decision. Over the years (he has been running Bridgewater Associates, one of the largest hedge funds in the US), he has developed an algorithm on how he makes decisions. He also writes in what he calls a decision journal, where he documents the criteria for making the decision, information that he takes, and his process to take the decision.

One of the things that he talks about is idea meritocracy. Some of the key points that I understood were –

  • All ideas should be treated clearly and put on the table.
  • Each idea should be considered without a bias.
  • He talks about thoughtful disagreement ~ where one needs to agree/disagree and dissect the idea with an objective view.
  • Two kinds of decision makers – autocratic and democratic. Neither work.
    • Autocratic – the bossy types – who eventually make the decision, based on their own thoughts/opinions.
    • Democratic – who always lean towards public opinion and consensus.
  • He believes in making a decision based on discussion (and hence thoughtful disagreement) with people with high believability scores. Believability is based on competency and experience.
    • Example that he gives – I need a medical opinion. My believability score is pretty low. Doctors who specialise in this field have much higher believability scores. Get at least three of them to discuss ~ preferably even disagree and debate between themselves.

I think, I will definitely read his book – where he outlines a lot more. And will update here then.