A - Z Characteristics of High Achieving Organizations
Radical transparency is the idea that everyone knowing everything could actually be a major driver of increased organizational performance.
During the Human Potential Movement of the 1960s and 1970s, the psychologist William Schutz had a theory similar to radical transparency that he called “the truth option.” In The Truth Option, Schutz states that what we think is a problem caused by telling the truth is usually caused by not telling the truth and if we get to the deeper levels of truth, we are communicating with others in a manner that promotes trust and friendship even though the communication’s content may be disturbing. Radical transparency, like the truth option, enables people to neutralize confirmation bias: the tendency to focus on evidence that confirms our beliefs rather than looking for data that contradicts it.
One company that continues to experiment with radical transparency is the hedge fund Bridgewater Associates. Its founder Ray Dalio is a firm believer in radical transparency which is a key topic in his book, Principles. Dalio’s embrace of radical transparency at Bridgewater Associates is so strong that it led one former employee to raise the question “Is it a hedge fund, or a social experiment?”
Dalio believes people tend to avoid discussing their weaknesses and mistakes, choosing instead to dwell on their strengths. Through his radical transparency initiative at Bridgewater, Dalio encourages a culture where people constantly seek truth by challenging one another’s views, regardless of rank. This approach works says Dalio if people discuss ideas and issues openly, even if they publicly point out each other’s mistakes.
Dalio recognizes that not everybody is ready to commit to radical transparency. “It is initially very difficult for most people to deal with uncomfortable realities,” he says.
But when Bridgewater employees buy into Dalio’s radical transparency, the result is a constructive climate of truth-telling that moderates egotism and promotes introspective insight.
In a marketplace.org interview with David Brancaccio, Dalio explains the three steps of radical transparency. First, people have to be completely honest; this is not something everyone can do. Second, people have to exercise the art of thoughtful disagreement; they have to know how to listen, how to absorb and process information so that collectively everyone arrives at a greater truth than they could reach individually. And third, people must abide by specific rules for addressing and overcoming disagreements. At Bridgewater, being radically truthful with others builds strong relationships and leads to quality work.
Radical transparency fosters an idea meritocracy.
In September 2017 Dalio published his codified principles of radical transparency in a 500-page book, Principles: Life & Work, frequently referred to as the “Principles.” Bridgewater’s 1,500 employees are expected to follow the “Principles,” despite the likelihood of uncomfortable confrontations. Bridgewater employees are carefully selected and they either believe in Dalio’s “Principles” or leave the company. Turnover among new employees is high. Some of Dalio’s methods have been criticized as intrusive and Orwellian: employees are quizzed on the “Principles”; all conversations and meetings are recorded so employees can view them later; some employees use an app to score their co-workers’ arguments in real time; and all data is analyzed to see how the firm can improve.
Robert Kegan, a professor at Harvard Graduate School of Education, spent a week at Bridgewater doing research. He sees Dalio as a great inventor who is contributing to “as dramatic a transformation as the industrial revolution.” About the negative aspects of Dalio’s experiment Kegan says, ..
“Every critical thing you’ve heard about Bridgewater could be true and it still doesn’t take away from the basic project itself.”
Bob Eichinger is an organizational psychologist who has done consulting work for Bridgewater and other large companies. In his opinion about 85% of what Dalio writes in “Principles” can be documented and supported by research. When asked about Bridgewater’s radical transparency methods, Eichinger says, “Is it a better way to run a company? From a results perspective, probably so. Could a large portion of the working population be comfortable in that environment? Probably not.”
Neuroscience research cited by the NeuroLeadership Institute shows that people work best when they are not hiding from self-disclosure, covering up mistakes, or dwelling on errors; in other words, when they are not operating in a threat response mode.
The principles of radical transparency although difficult to implement can improve business performance in terms of focus, engagement, employee development, and recruiting talent. Bridgewater Associates is an ongoing experiment in the applied use of radical transparency. The results of this experiment are a matter of debate and like any social experiment the findings are rarely pure and never simple.
Articles in this Series: A - Z Characteristics of High Achieving Organizations
- Agility Thinkers at Facebook
- Boundary Spanners at Juniper Networks
- Change Agents at IBM
- Decision Drivers at Cisco
- Execution Experts at Caterpillar
- Future Scenario Planners at Shell
- Gritty Explorers at SpaceX
- Honest Culture Creators at GE
- Innovation Masters at W. L. Gore
- Justice Ambassadors at General Grain
- Knowledge Management Champions at Xerox
- Loyalty Partners at Starbucks
- Motivation Maximizers at Trader Joe's
- Nurturing Leaders at FedEx
- Optimistic Visionaries at Intel
- Performance Navigators at Gap
- Quality Virtual Instructors at Boeing
- Resilient Re-inventors at Barnes & Noble
- Servant-Leader Heroes at Southwest Airlines
- Transparency Radicalists at Bridgewater Associates
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Sandhya Johnson, PhD is a leader in HR optimization, leadership development, team performance, and organization effectiveness. She has a proven track record of developing innovative talent management strategies for a diverse group of leading organizations. Sandhya is the founder and Managing Director at Ingenium Global, a Dallas-based consulting firm that is committed to co-creating talent-driven organizations. Connect with her on Twitter @IngeniumGlobal
