Bridgewater Associates: A Case Study of Principles Gone Wrong

    DISCLAIMER: these are my opinions only and should not be interpreted as material facts or any form of reality. My experiences may differ from yours and others. My opinions do not represent the opinions of Sanvada or its partners.

    There is a proverb saying that “the road to hell is paved with good intentions” and in my opinion that is the perfect encapsulation of what went so horribly wrong at Bridgewater Associates. As I understand it, Ray Dalio the founder of the successful hedge fund known as Bridgewater Associates initially wrote the memo for his successors to capture all the many great things he learned over the years as a form of mentorship for the executive staff at Bridgewater Associates. In general, I would say that I tend to agree with much of those remarks; however, where I believe he went so horribly wrong was in the implementation and the execution portion. Minor details, right? Well, no.

    If there is one thing I have learned as a former U.S. Marine and Engineer, it is that implementation and execution matters…a lot. In fact, I would argue that an ideal means nothing if not properly implemented and executed. For instance, if properly applying the Scientific Method, you may take a “principle” and consider it as a hypothesis, however, at Bridgewater it is of my opinion that they stopped short there. Instead of identifying quantifiable metrics and then testing those metrics for falsifiability, Bridgewater Associates assumes that that is enough. Scientists and Engineers know better. Unless a hypothesis or theory, which is what I believe we should consider Ray Dalio’s Principles to be, is properly tested under scientific settings, there is absolutely no way to know for sure whether those “principles” actually work. Further, what if those principles were actually having adverse effects?

    In many cases, we can look at politicians or projects of the past in any given country and find many examples of things that may have appeared as a good and worthy ideal at the moment only to find out through catastrophic disaster later on that perhaps more thought should have been given to those ideals. Presumably – Bridgewater certainly must have a large team of Data Scientists and Engineers, so perhaps the question should be why are they not speaking up? In this essay, I provide some insight as to why that might be. Additionally, I will provide insight into the world’s largest hedge fund and why I think they are in an inter-personal crisis.

    I do not forecast their imminent doom as some might infer simply because as a reputable organization driven by the financial motives of large institutions, I do not doubt that they are capable of stringing along as business as usual. I do believe that they are in an interpersonal crisis and that Bridgewater Associates as a whole is largely unaware of or is blind towards. Perhaps, that is their goal, to assemble an entourage of like-minded fools. In other words, mindless yes-men that will not hesitate to drink the Kool-Aid brought to you by Jim Jones 2.0.

    Finally, if there is any meaningful existential debate that arises from a corporate level discussion, it is this; what can organizations do when its corporate culture has gone toxic?

    A Brainwashed Cult of Likeminded Fools

    “A fool thinks himself to be wise” – Shakespeare

    Initially, a recruiter reached out to me asking if I was interested in applying for a position as an Engineer at Bridgewater Associates. Since I had not heard about Bridgewater before I did some digging and found out more about this large hedge fund, the position seemed interesting and I knew it paid well so I proceeded with the initial interview. During the initial interview, I had a discussion with a very nice senior Engineer at Bridgewater Associates who I could relate with not only on a technical level but also on a personal level.

    After the initial interview, I was invited to their offices in Connecticut. I discussed the prospect of going forward with this company located in Westport, Connecticut with my wife. We knew it was in a ridiculously expensive area, with people that were known to rude both in general and especially at the company (according to reviews we found online). Ultimately, we knew it was a stretch and that we were certainly not interested in moving any time soon but decided that it would at least be a good experience for me and also give me perspective on interviewing in this area and in the commercial industry, among other things.

    Whether good or bad; it would be a learning experience. What I didn’t count on was how much of a “learning” experience it would be…

    So, why am I telling this story of my personal experiences and embarrassments? I am telling it because I want it to be a lesson for young folks out there who want to be professionals in any industry but do not have the experience necessary to be able to discern a good opportunity from a bad opportunity; that first, there is more to life than money; second; be careful who you chose as your coworkers when you interview and consider whether or not to accept an offer; and third, do not be blinded or allow yourself to fall into the groupthink bandwagon that you must drink the corporate KoolAid, just because someone in leadership tells you to think a certain way or if something sounds like a good idea but really isn’t, AKA THINK FOR YOURSELF; and finally, don’t be an asshole.

    The Beginning

    Bridgewater Associates is unquestionably a successful Hedge fund; however, from reading the remarks of others that have gone through a similar process of interviewing for a technical position as I have, it is apparent to me that those remarks by others are indeed very accurate. I believe in being fair an honest in my evaluation of my experiences at Bridgewater Associates, so I will give it a shot.

    Upon arriving I was escorted to a very small conference room by a staff member. This room had a camera and recording microphone possibly watching and/or listening to my every move. The first person to come into the room was a gentleman with a large beard who claimed to be a former Marine, he said he was a former infantry Marine just like me, we talked for a while, and he told me to relax. Overall our conversation was very informal. I was happy to meet him, but looking back now it could have very well a trap to get me to open up more, or make me complacent where I would be more likely to make a mistake. At least that’s the strategy I would use if I wanted to exploit candidates weaknesses, but I wouldn’t because I am not an asshole.

    The initial interviewers came totally unprepared, and did not demonstrate any interest in my previous experiences or academic knowledge; thus, their questions were organized in such a way that benefitted them but were random and not at all well thought out. For instance, I would ask a particular interview whether or not they read my resume, and their response was essentially no, if not out-right no. My thoughts are, if the interviewer does not take the time to learn about the candidate, it’s hard to have a meaningful initial interview as they know nothing about me.

    Further, questions about migration into the cloud are vague and broad. Especially, if not prefaced with more details about technologies like Data pipelines, Operating systems, Brokerage queues, failovers, load balancing, legacy systems, networking/firewall limitations, or level of specificity. I am a Systems/Software Engineer (Let’s say; “DevOps” Engineer for giggles) interviewing for a highly technical role, I expect to be expected to answer in a highly technical capacity. After all, you cannot effectively answer technical cloud platform based questions without going into details. Yet, ironically, in a single sentence, I may receive a question asking for specifics while also asking for abstractness, there is not a correct way to answer this question. I can only deduce that this type of question is unwittingly a trick question designed to throw the candidate off – or the interviewer is totally incompetent. It can go either way. But time and time again during the initial interview that day, it seemed the “technical” person wanted less granular answers and more of the 30,000-foot answer. I could tell this guy was full of it but played along anyway; after all, there were still more interviews to come.

    “Never argue with a fool, onlookers may not be able to tell the difference.” – Mark Twain

    It is worth mentioning that Cloud infrastructures are highly dependent on existing legacy software/hardware as well as data and network infrastructure, among a host of other things, not the least of which is client requirements. So, to expect what I consider to be a 2nd-grade answer is like talking to a child. Hint: it’s not at all productive.

    Vague and broad questions like those from their ‘technical team’ are hard to answer without adequate details, to which I received little to none, even after further prodding and questioning on my part.

    The Culture From Hell

    As many people have already pointed out Bridgewater requests that you read about their culture and are expected to read the book “Principles” before the interviews. In fact, the first thing you notice are rows of the book propped up, as if to say this is our corporate bible. One thing is for sure is that Bridgewater is their own best customer and they drink their own Kool-Aid. I will elaborate on that later.

     

    They talk about being objective and unbiased as they force the book down your throat and quiz you on those principles or about their culture. If that doesn’t raise a red flag, hold on there is more. Being objective means applying the Scientific Method; however, what it does not mean is repeating verbatim from some book written by your founder as if it were gospel without giving it any thought. (Even if it is correct). If that is not a great contradiction, then I do not know what is. The hypocrisy at Bridgewater Associates is apparent almost immediately. The reality is that their culture breeds arrogance and backstabbing.

    The majority of the questions I received were based on the persons own beliefs and experiences, and were condescending in nature. For instance, I was asked repetitively by one interviewer with arms crossed, “Do you know what I am thinking?”. My response was; “Actually, no – I do not!” (at least internally). The way it was presented had the condescending notion of an arrogant man who thinks he is smarter than you. I had to endure this narcissism many times in different forms.

    The problem with Bridgewater is that because of their past successes and the academic arrogance they have fallen victim to their own line of thought. If you do as I did and actively question the HR leadership you will find a van waiting for you outside earlier than expected. Now, I suppose it’s possible after everything I say that a person could navigate their way into the culture; but, the bigger question is why would you want to? I mean it seriously. This experience has taught me many things. The first thing it taught me was that you do learn more from your failures and that these political interview interrogations are an extreme waste of everyone’s time. If the objective is to trick the candidate into a false premise or into a lie, then any good interrogator will succeed at that. In each stage, a person had only a few minutes to judge my intellect and abilities as an engineer. If they don’t get the answer they are looking for then it is; game over. You must ask yourself in these circumstances is that truly an honest and “radically transparent” way of evaluating technical abilities? My experience has proven the opposite is True.

    These interviews work more as interrogations because it is likely that the interviewer is intimidated and does not want to bring in a new team member that can pose a threat to their ego or job security.

    During the horrible HR round, a beady-eyed lady looked me square in my face and asked me to cite a time when my boss couldn’t rely on me…and on more than three occasions. The problem with that question is that as a former United States Marine you are taught the importance of being trustworthy which means that you are reliable. So, to me, that question shows a lack of respect or understanding of what members of the military go through and how they are trained.

    If I or any other Marine or any member of the armed forces could NOT be counted as reliable to do a job then I have failed in my purpose. Those are traits that I know these arrogant snobs have willfully covered in ignorance at the expense of American Veterans. They don’t understand that the armed forces are so good at what they do because at the end of the day it’s not necessarily the technology or the weaponry, it’s the values of dependability and reliability that are taught and held dear even after we leave the military that they continually deny.

    So, to ask a former Marine to cite specific examples of when he was unreliable is offensive, to say the least. I suppose 200 years ago a remark like that may even spark a duel! In any case, I digress… Would you deny your purpose or act akin to treason on a personal level?! No, I think not. My response was professional as I did not go apeshit on beady-eye-bat-witch lady, but rather to explain that I may not always succeed in the most effective or efficient manner, but that one thing was certain was that I was going to give no less than 100% at all times to accomplish the objective. She responded by saying that we must have different interpretations of being reliable, but I think not lady. I think you are confused and that’s why only shit is coming out of your mouth right now. I and my fellow veterans know exactly well what it means to be reliable. Rest assured, there is no mistake on my behalf.

    Upon completion of my final interview (which was the most technical, and I felt went well), I was told by staff to hang out in the same small interview room I had been in since 9 AM that morning. I waited in that room for 45 minutes by myself as a camera watched my every move…I was the most awkward moment in the entire process, and perhaps in my entire life in that time and the minutes that followed. These people really do not know how to treat candidates, as I sat there by myself waiting and waiting. Around 1:50 or later, I received a series of texts on my cell phone telling me that there was a car waiting outside to pick me up. Initially, I thought this was a mistake because the interviews were scheduled to last until 5 PM. Finally, at 2 PM the staff member came to get me to escort me to the bathroom, I told him about the texts, and he muttered something to me about the team not wanting to move forward. I was caught completely off guard, but at the same time not entirely surprised. It is common for interviews to judge people on their personalities and by the answers of the candidate and not necessarily by their technical competencies or proficiencies. That of course is some seriously flawed reasoning. Which I had hoped was not the case at Bridgewater Associates.

    The staff member then instructed me to wait in the conference room, where (let’s say Tweedledum, as I probably can’t use real names, just imagine a mentally-handicapped man appearing like Vincent d’Onofrio with 100 extra pounds ((no offense to Vincent d’Onofrio))) would come and do a review. So, I said OK and waited for another 15 minutes. When he came back in, he made excuses and rambled about how ‘we didn’t like this or that’ – none of which had anything directly related to the position I was applying for in my opinion.

    Finally, after repeated requests, he confessed that his major problem with me was that I wasn’t assertive enough. Admittedly, that made me upset because here this conceited Tweedledum, who never did anything meaningful in his life other than work in Human Resources is telling me that I am ‘not assertive enough’. Like, “What?!”. I have led a Marine Corps Assaultman team leader, I have run a business, I have been promoted to Lead Engineer at Booz Allen at the age of 26, a husband and father of two great kids, I have led a Scout Troop for the BYSA (arguably hardest job yet) the list goes on, and he is telling me, that I am not assertive enough?! …but that’s OK, because I learned long ago not to argue with stupid people, and to “KNOW WHAT YOU ARE” and own into it so that douchebags like Tweedledum can go on living in their stupid and ignorant bubble of arrogance, and you can move forward.

    Also, since when was “assertiveness” a positive character trait? Leadership is a positive character trait. But assertiveness is not mutually inclusive to positive leadership. Good leaders speak softly and listen; when it comes time to make a decision they execute the mission. “Assertiveness” is merely a tool leaders use as it is required. Those are facts that Bridgewater’s HR department clearly does not understand.

    The Discussion

    I believe that at Bridgewater Associates what you see almost instantly is a culture of arrogance, a culture that has formed out of the unintended consequences of Ray Dalio’s book, “Principles”. Being “radically transparent” means nothing if not properly measured and tested under the scientific method. Their interviewers and interviews were some of the most unprofessional and arrogant I have ever had the misfortune of being a participant in. I have been in many different environments and cultures, both in terms of corporate and real cultures, and I must say that the one constant is; people; simply, human nature. People cling to things they know and obfuscate what they do know if they feel the release of that information might hurt their social standing within the organization. If not properly checked by means of an ethos, or moral standard of expectations, then all that garbage about transparency, objectiveness, and honesty is lost. Instead what you have is a bunch of arrogant people that through a form of reverse-natural selection have formed a group where those remaining are likeminded egotistical narcissists, because smart people leave bullshit while the remaining arrogant pricks stroke each other’s ego as if it were a house cat. This is a phenomenon I learned working at several other places, especially where office politics, or social groups are formed. In the end, we know that pride comes before the fall. If Bridgewater is to falter someday it will be because of the internal strife more than any other reason.

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