Are You Ready For Feedback That’s Radically Transparent?

Here’s an actual email sent to Ray Dalio, the founder of Bridgewater Associates, by an employee named Jim Haskel:

Ray –

You deserve a “D-” for your performance today in the meeting. You did not prepare at all, because there is no way you could have and (sic) been that disorganized.

In the future, I/we would ask you to take some time and prepare, and maybe even I should come up and start talking to you to get you warmed up or something, but we can’t let this happen again.

Now, if you’re the billionaire CIO of one of the world’s most successful hedge funds, what are the odds that you’d fire Jim Haskel? But not only didn’t Dalio fire Haskel, he sent him an apology. Not just that, he copied the management committee of Bridgewater and asked them to investigate his history to see if this behavior was part of an ongoing pattern.

∼∼∼∼

Dalio believes in “radical candor,” a trend that says it is better to give blunt and candid feedback than to give none at all. But not everyone agrees. Read “When It Comes to Feedback, Are Your Employees Ready for “Radical Candor?”

∼∼∼∼

That’s radical transparency. And it’s one reason why Bridgewater consistently outperforms other firms – they relentlessly probe for feedback that shows where the consensus is wrong.

Even though there’s surprising research that highlights several benefits of giving negative feedback, most people are reluctant to share it with others. This happens because:

We don’t think they’re smart enough to handle it.
We don’t think they’re mature enough to handle it.
We don’t want others to think we’re jerks.
We don’t want to be mean.

The problem with resisting transparency is that it creates a weak signal. Critical information keeps getting filtered out of conversations or muted entirely. We disguise negative feedback with pleasantries, serve up praise sandwiches, or simply avoid giving it altogether. By the time we come around to breaking the bad news, it’s usually too late for a course correction.

Our desire to be “nice” and avoid “rocking the boat” perpetuates behavior or actions that could have otherwise been resolved had we only mustered the courage to speak up with candor, clarity and confidence.

It turns out there are measurable performance benefits to being more honest. A 2010 study by CEB showed that companies with a culture of open communication had a 270% higher 10-year shareholder return (7.9% as compared to 2.1%) than those who operated in silence. And research from management firm Zenger/Folkman showed that employee engagement rose when managers provided honest feedback – what employees needed to know, not simply wanted to hear.

How can you break down barriers to honest feedback?

Begin with those you trust — If the prospect of becoming a transparent organization seems too risky, consider a slow rollout, starting with the people you trust most. Approach close colleagues and offer to give honest feedback about their performance in exchange for transparency about your own. The two-way nature of the arrangement divides the stakes equally and reduces the potential for judgement and acrimony. From there, broaden the effort to include others in the organization, demonstrating how your team’s transparency practices can be duplicated and shared. Transparency should be radical in its design but not in its delivery.

Keep others in the loop — Not all employees are well informed about their company’s goals, strategies, and tactics. This uncertainty about the company’s direction leads to chronic stress, which inhibits trust and undermines teamwork. If you want to create a transparent environment, everyone in the organization has to work on a “need to know” basis. People can’t be transparent when they’re kept in the dark.

Build a circle of critics — Change starts at the top, and leaders have to model transparency if they want it to spread throughout the culture. In my book The Feedback Fix, I describe how some of the most successful organizations have transformed their feedback processes starting with the way information reaches the CEO. These leaders appoint a circle of “loving critics” – the people who are empowered to give their bosses the honest feedback they need, even when they don’t think they need it at all.

When leadership takes an active role in modeling and reinforcing the behavior – like Ray Dalio did at Bridgewater – then radical transparency can become a radical reality.