Investment Manager, Ray Dalio adopted the principle of "radical transparency" at Bridgewater Associates in 1993. In that year, three of Dalio's top confidants confronted him with feedback that his direct and brutally honest communication style was hurting employee morale and stunting the company's growth.
Specifically, they told Dalio in a memo: "Ray sometimes says or does things to employees which makes them feel incompetent, unnecessary, humiliated, overwhelmed, belittled, pressed, or otherwise bad. If he doesn't manage people well, growth will be stunted, and we will all be affected."
This feedback prompted Dalio to initiate one-on-one meetings with employees to establish mutual agreements about how open and honest their communication should be. His goal was to create a culture of "thoughtful disagreement" where employees could freely exchange controversial ideas without causing problems.
From 1993 onwards, Dalio implemented radical transparency as a core principle at Bridgewater. This involved practices like recording all meetings, encouraging open feedback and criticism from employees, and making internal information radically open within the company. Dalio believed radical transparency would encourage innovation, continuous improvement, and an "idea meritocracy" where the best ideas prevailed. Given Bridgewater now manages nearly $150 billion in assets, Dalio's directness seems to have worked.
Dalio's experience at Bridgewater highlights a key aspect of effective leadership communication: the power of direct, specific feedback. While Dalio's approach focused on radical transparency across the organization, there's a key element within this philosophy that deserves a closer look - the practice of naming names when providing feedback or critiques.
Naming Names Matters
Using "we" critiques in business is a common practice.
"We missed our targets."
"We aren't following process the way we need to."
"We are allowing poor performance amongst our team members."
"We" softens the blow and keeps the feedback generalized amongst the team it's directed toward improving. For the messenger and the receiver it's also more comfortable to than a direct critique.
However, generalized critiques dilute the message. They lead to confusion about who needs to improve. Naming names is more direct and impactful. Saying, “John, the delays in your project caused us to miss our product launch,” leaves no room for ambiguity. John knows he’s accountable, and the team understands that John's underperformance is impacting the overall team.
While uncomfortable, being directly named can be a powerful motivator FOR THE RIGHT TEAM. It pushes individuals to reflect on their actions, understand their impact, and take concrete steps to improve. The right team members will hold themselves accountable for higher performance; the low-performing members will sulk, get defensive, point fingers, and shirk accountability.
Paradoxically, naming names builds trust.
When leaders are transparent about who is responsible for what, it removes the undercurrent of suspicion that frequently plagues teams used to generalized feedback. Everyone knows where they stand, and this clarity leads to stronger, more cohesive teams.
Reed Hastings, CEO of Netflix, is known for his direct feedback style. Netflix’s culture of transparency and accountability has been key to its success. Hastings often names individuals in feedback sessions, ensuring that everyone understands their role in the company’s achievements and failures. Most recently, NVIDIA's CEO, Hensen Huang was interviewed stating he doesn't do 1 on 1 meetings, but rather gives direct feedback in front of the entire 60 person management team. Huang uses the feedback as a learning opportunity for the other 59 managers in the room.
A common concern is this technique might demotivate individuals. However, research from Harvard Business School suggests that specific feedback, even if negative, is more motivating than vague, generalized comments. When people understand exactly what they need to improve, they are more likely to take actionable steps towards better performance.
Leaders must base their feedback on objective data and observable behaviors to avoid perceptions of bias or favoritism. This approach not only assures fairness but also reinforces the credibility of the feedback.
Coddling vs. Constructive Confrontation
There is too much coddling and not enough constructive confrontation. We shield employees from the hard truths and, in doing so, stifle their growth as well as the organization's. Our failure to sit with the uncomfortable feelings that arise from constructive feedback stunts our personal development and that of the receiver.
When you feel yourself defaulting to the "we" statement, slow down and consider who you genuinely need to speak to. Be direct, be empathetic, be a leader and demonstrate constructive confrontation. Like Ray Dalio discovered at Bridgewater, uncomfortable truths and direct communication can lead to remarkable growth and success. 'Idea meritocracy' begins with the courage to name names and address issues head-on."
