Unlocking Greater Success by Developing an Open Mindset

Meet Ray Dalio.

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Ray Dalio is the founder of Bridgewater Associates and only recently stepped down as CEO to more fully pursue his philanthropic efforts. Under Dalio’s leadership, Bridgewater has become the world’s largest hedge fund ($160 billion in assets under management in Fall 2017), making more total money for their clients than any other hedge fund in history. Fortune has recognized Bridgewater as the fifth most important private company in the United States.

Ray started Bridgewater Associates in the mid-1970s. By the early 1980s, he had become a pretty hot-shot investor, and a respected voice in the investment community.

One of the things you need to understand about that time period is that the period between 1979-1981 was the most volatile period ever for the markets. Inflation was at 10 percent and rising, economic activity was slowing down, and American banks were lending huge amounts to emerging countries.

Analyzing all of the signs, Dalio boldly predicted on both national TV and to Congress that the U.S. economy was entering into a depression that would be as bad or worse than that witnessed in the 1930’s. He put the odds of another great depression at 95%, and the other 5% being hyperinflation. And, he invested accordingly.

Unfortunately for Dalio and for Bridgewater, his certainty in an economic collapse and his respective investments resulted in Bridgewater losing so much money that he eventually he had to let everyone go, even his best friend and partner. He had lost so much money that he had to borrow $4,000 from his dad until he could sell his family’s second car. He was now scrambling to support his wife and two young children.

Of this experience, Dalio says:

“My experience over this period was like a series of blows to the head with a baseball bat. Being so wrong—and especially so publicly wrong—was incredibly humbling and cost me just about everything I had built at Bridgewater. I saw that I had been an arrogant jerk who was totally confident in a totally incorrect view…I had been wildly overconfident and had let my emotions get the better of me. I am still shocked and embarrassed by how arrogant I was.”

This was a turning point in Dalio’s life in many ways, but perhaps most importantly, it was a turning point at his most foundational level: his mindsets. He knew that if he didn’t want to experience this again, he would need to change his “mindset from thinking ‘I’m right’ to asking myself ‘How do I know I’m right?’” Or, in other words, change from having a closed mindset to having an open mindset.

Evidence of Dalio’s Change in Mindset

When we have a closed mindset, our mind is closed to the ideas and suggestions of others.

When we have an open mindset, our mind is open to the ideas and suggestions of others, and we are able and willing to take those ideas seriously.

Since his humbling experience, Ray has taken open-mindedness to the extreme, creating a culture of radical open-mindedness and transparency at Bridgewater Associates. He details all of this in his book Principles (which is fantastic, by the way), and emphasizes that a primary reason for Bridgewater’s success is their radical open-mindedness.

This open-mindedness can best be demonstrated in the following example, which I will preface by saying that they encourage employees to bring forward any information that can be beneficial for personal or organizational improvement.

After one meeting, Dalio received the following email from a lower-level employee:

Ray- you deserve a “D-” for your performance today in the ABC meeting and everyone that was in the room that saw you agrees on that harsh assessment (give or take half a grade). This was especially disappointing for two reasons: 1) You have been great in previous meetings where the subject matter to be covered was the same, and 2) We held a specific planning meeting yesterday to ask you to focus tightly on culture and portfolio structuring because we had only 2 hours to have you cover those two topics, me cover the investment process, have Greg to the observatory and have Randal do implementation. Instead, you took a total of 62 minutes (I measured) but worse, you rambled for 50 minutes on what I think was portfolio structuring topics and only then got to culture and you talked about that for 12 minutes. It was obvious to all of us that you did not prepare at all because there is no way you could have been that disorganized at the outset if you had prepared.

Dalio then sent this message out to then entire company to demonstrate that he was grateful for the feedback and that he would take it upon himself to improve.

Would this fly in your organization?

Impact of Having an Open Mindset

At the end of the day, possessing an open mindset leads to better thinking, decision making, and problem solving; which in turn, leads to greater success in life, work, and leadership.

When we possess a closed mindset, our thinking, decision making, and problem solving becomes prone to bias and are of lower quality; and thus, the potential for success in life, work, and leadership is lessened.

What Mindset Do You Have?

If you want to ensure your success in life, work, and leadership, it is important that you develop more of an open mindset. But, it is also important to identify what mindset you currently possess. Where is your starting point?

To help you with this, I have developed a personal mindset assessment that can help you identify the degree to which you have an open mindset.

Ideas for Developing More of an Open Mindset

Regardless of your current mindset, if you want to develop more of an open mindset, let me give you a few suggestions:

1.       Take the Personal Mindset Assessment

2.       Read Principles by Ray Dalio

3.       Reflect inward

  • Ask yourself the degree to which you possess an open mindset, the degree to which you ask questions, the value you place in “being right,” the emphasis you place on not being wrong, how stubborn you are, etc.
  • Meditate – Create space for openness

4.       Reach outward

  • Ask those you live and work with the degree to which they think you possess an open mindset, ask questions versus give answers, are “in touch” with how they think and feel, and practice thoughtful disagreement.

Each of us struggles at times with having a closed mindset. What are situations where you find it easy to revert to a closed mindset?