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Meet the DDOs

You know how there are people, when they realize that vulnerability
is important, they kind of walk right toward it? Well, first—that’s not me; and, second—I don’t even hang out with people like that! . . . Vulnerability is at the core of shame and fear and our struggle for worthiness, but it appears it is also the birthplace of joy, of creativity, of belonging, of love.

—Brené Brown, University of Houston

In this chapter, you’ll get inside three deliberately developmental organizations (DDOs). You’ll meet some of the people who call them home—leaders, new recruits, and experienced employees. Some of these people will appear again in later chapters. You won’t get a comprehensive, top-down introduction to the companies or to the general idea of the DDO. Instead, you’ll get the closest thing, in book form, to a quick immersion: what you might see if you were plunked down in the middle of one of these companies.

Before we enter, a few words of preparation: Are you the rarer kind of person Brené Brown (author and researcher at the University of Houston) describes as valuing the experience of your own vulnerability and running right toward it?1 If you are, your only risks in the pages ahead are being too sure you understand fully what you’re seeing or too quick to suspend your critical faculties and automatically endorse what you think these people are trying to do.

But if you are, like most people, more wary of feeling vulnerable, ashamed, and unworthy—especially at work—you might find yourself feeling alarmed soon after you enter. That might be the case especially if you happen to be a leader in an organization and you feel you don’t have the luxury of being vulnerable (“I have people counting on me, people who need me to have it together”). In any case, none of us chooses or decides to be alarmed. It happens automatically. Once alarmed, any of us will, as the neuroscientists have taught us, just as automatically protect ourselves.

If you feel alarmed, you might protect yourself by “fleeing”—perhaps by putting down the book and finding something else to do. But more commonly, you’ll flee, while continuing to read, by distancing yourself from what you’re reading. Your mind might begin looking for reasons to conclude there is actually nothing novel here: “This sounds a lot like what we’re already doing” or “I’ve heard all this before.” Or you might find yourself thinking, “This manner of working is the most exotic of rare flowers, unlikely to grow in any other soil, and thus not really worth thinking any more about, since it would be impossible for most people or organizations.”

Or you might protect yourself by “fighting,” finding yourself on the attack without a declaration of war. Somehow, before you know it, your mind is doing whatever it can to take apart what is being built in front of you. “These people are crazy,” your mind might say. Or, “This is too extreme.” Or, “This is too X.” Or, “This violates my belief that Y, or my value for Z.”

All these reactions are fine. Many of your thoughts that come up in this chapter deserve careful consideration, and we’ve made space in future chapters to do that. The important thing is for you to realize that when these thoughts arise automatically, you’re not considering them. You’re not even “having” them. Rather, they are having you. They are taking over.

All we ask is that you keep track of these automatic reactions, know that you will explore them in future chapters, and not let them be your whole experience as you try to stay present in the places we invite you to explore.

In a sense, it will be wonderful if you do find yourself having these reactions, because you will begin to experience the first kind of work everyone must do in a DDO: to take responsibility for the workings of our minds so that we can stay present, so that we can stay at work.

It’s also important to say that the exemplar companies are, in many respects, very different from one another. Each does business in a different industry: entertainment and real estate; e-commerce; and hedge-fund investing. There are striking differences in the “feel” and operation of each company. If Bridgewater Associates might be glibly characterized as a cross between business and the Navy SEALs, then The Decurion Corporation might be seen as a cross between business and the wisdom traditions of the East and the West. Next Jump Inc., has a “no firing” policy and an explicit commitment to stand by employees through thick and thin (“You wouldn’t fire your children from your family,” Charlie Kim, its leader, often says). But Bridgewater is equally explicit in saying, “We are up for growing people, not rehabilitating them; some people have to go.” In thinking about its operations, Bridgewater makes continuous use of the metaphor of the machine, an analogy you would never hear at Decurion. Next Jump is in some ways proudly nonexceptionalist (the two top leaders talk about not being the stars growing up in their own families or schools); Bridgewater’s leaders believe you become a one-in-ten-thousand company by hiring one-in-ten-thousand-type people.

In short, a DDO can come in many flavors. But even though each DDO may have its own feel, may have taken a different path to its current culture, and may have evolved its principles and practices independently, it’s striking how much they have in common. There’s no single right way to be a DDO—no simple recipe of programs, policies, incentives, and perks—but there are deep assumptions that run through all the DDOs: assumptions about the possibility and value of growing in adulthood, ways of structuring people’s growth directly in their work, ways of helping people get the most out of giving and receiving feedback and coaching, ways of making people development and business development all one thing.

DDO work settings are built for human development. They support people in overcoming their limitations as part of contributing to the profitability of the business. It’s just as true that DDOs seek profitability so that they can stay in business to help people overcome their limitations and grow. (Please note, too, that these companies are not our clients; we formed a research relationship, and not a service relationship, with each of them.)

Finally, it is possible, perhaps inevitable, that at the same time you learn about these DDOs, through your reactions you will also begin learning about some aspects of yourself. This, too, is exactly in keeping with the spirit of a DDO. As Bryan Ungard, COO of Decurion, says, “There is no way, really, to be a spectator here. You become a participant the second you enter. And welcome!”

The Next Jump Story

There is no way to “get better” other than to first do it, however poorly you do. So get started; go out and fail! We have become good at getting better because we are so good at failing.

—Charlie Kim, Next Jump

It is an early Saturday morning in New York, and the Next Jump conference room is packed with twenty-somethings. Most are graduating college seniors, completing their engineering or business degrees from prestigious universities such as MIT, Carnegie Mellon, and Georgia Tech. The young people are chatting nervously. They have been flown in the night before and are dressed up for a full day of demonstrating their thought processes in repeated interviews, presentations, and team challenges.

It’s Super Saturday at Next Jump, an e-commerce tech company, which devotes two Saturdays per year to interviewing, testing, and choosing new employees. Greg Kunkel, senior vice president and cofounder, squeezes to the front of the room to welcome the applicants. Kunkel lets everyone know that of the thousand candidates screened on campus, forty-four have made the cut and accepted the chance to come for interviews. They are about to experience a unique approach to hiring, one that will give them a taste of the Next Jump culture.

“You will learn about yourself today, as well as about Next Jump,” Kunkel says. “Think of today as a nine-hour blind date, one that is long enough for the truth to come out.” Candidates smile nervously and exchange glances. “It will be a long day, and you will be tired by the end,” Kunkel continues. “But remember, it takes twice as much energy to fake and hide who you really are than it does to just be honest, to just be your real self.”

Kunkel then introduces software engineer Nayan Busa to share a little of his own work experience at Next Jump. Calmly and quietly, Busa begins.

“I have been here since 2010,” he tells the packed room. “When I first started, I lacked confidence. I was insecure. I was scared about how I was portrayed by my peers. This has not been easy to overcome. I had to practice a lot. I realized I lacked confidence in all parts of my life, even when it came to choosing furniture in my home or going to a restaurant.” Busa explains how he has been working on becoming more confident through his job. “I practiced by speaking in front of the company about my growth. I am practicing right now in front of you. When you start improving, it impacts revenue and business. And I still have a long way to go.”

Busa’s tone and content illustrate how Next Jump operates differently from the other companies where candidates are interviewing. “All this growth is for a reason,” he explains. “Our goal is to build a top-ten global technology company. And we want to change the world by changing workplace culture.”

Next Jump generates billions of dollars in annual sales by using a unique distribution channel to employees in their workplaces. Through its PerksAtWork.com platform, Next Jump built a marketplace connecting 30,000 merchants with 70,000,000 employees from 4,000 large businesses (including 700 of the Fortune 1,000) and more than 100,000 small businesses. By aggregating the buying power of jobholders, Next Jump offers employee discounts and privileges for all types of products and services.

Busa leads the PerksAtWork e-commerce marketplace, and his position comes with a great deal of responsibility, something he knows is unusual for someone so young (he is twenty-eight) and relatively inexperienced. “I graduated from Cornell in 2009 doing my master’s,” he tells the applicants. “A lot of my friends went into Amazon, Google, Bloomberg, etc. And they’re still doing the same thing they did five years ago. They still do the same code. Yes, their projects might have expanded. Maybe now a couple of them are leading one or two people. But none of them is in some way running a company. Charlie [Kim, Next Jump CEO and cofounder] relies on us to come up with strategies for the company. And even when we attended the board meeting, I was like, ‘Shit! Which company allows such a young engineer to be sitting in front of the board talking about strategy?’”

Like the two other DDOs, Next Jump challenges employees by moving them into roles for which they’re not yet prepared to succeed and then provides them with steady streams of feedback to help them grow into those roles. In all three companies, if you’re completely able to perform your role, it’s no longer the right role for you; it has no “stretch” left. Once, at a retreat for MV21, Next Jump’s twenty-one-person, peer-chosen leadership team, Busa told a long and rambling story to the other leaders; then he heard the feedback that he needed to improve his storytelling and presentation skills. Since then, he has looked for any chance to develop this skill, pushing himself to present regularly in front of the company, asking for and learning from the feedback he receives.

This occasion—speaking to the forty-four applicants on Super Saturday—is no different. At the end of the remarks, as the candidates file out to prepare for their first interviews, Busa receives lengthy, detailed feedback from, among others, CEO Kim. “I could feel your angst,” Kim tells him. “You were too focused on yourself. Focus more on them.” Another listener reminds Busa of material he omitted.

Busa remains calm, nodding, agreeing, and finally thanking them for their help—a common response to receiving tough feedback at Next Jump. Busa sees these opportunities to practice and receive feedback as opportunities to learn. “It’s basically an ‘investment in loss,’” he says in an interview. The phrase is a touchstone at Next Jump, borrowed from performance coach Josh Waitzkin. When we take risks and experience “loss” or failure, says Waitzkin, we create the conditions for learning and enhance our flexibility. Winning, in this sense, is less valuable than what we learn by losing in the pursuit of excellence.2

But Busa didn’t always feel this way. When he first started working at Next Jump, he thought that all the talk of self-improvement and helping each other by giving feedback was only talk. The turning point came when he began to see that feedback was a way people were showing him they cared for him. Then, he says, he began “accepting that I can do more and that I have weaknesses. The day I accepted that—that was a turning point for me at Next Jump.”

The Hiring Process at Next Jump: Super Saturday

Next Jump began recruiting engineers at colleges in 2006, alongside technology heavyweights such as Google, Facebook, and Microsoft, companies with far greater resources to invest in college recruiting. “We recruited for similar characteristics that others do—for who was the smartest, the most driven,” explains Kim. “We looked for the most competitive and driven people. We ended up hiring what we later called ‘brilliant jerks.’”

The workforce the company built had too many solo players, people with raw smarts and plenty of arrogance. Next Jump leaders faced a choice. Would they continue to hire the brilliant jerks, whom they would probably lose to poaching anyway? Or would they make a bigger bet on a different kind of workplace culture—and on selecting a different kind of employee? “One day in 2008,” Kim recalls, “we fired literally half of our engineering staff.”

The company’s founders had made a brazen choice. Super Saturday was born soon thereafter.

Throughout the day on Super Saturday, seventy-five Next Jumpers walk around with a custom app on their mobile devices for gathering impressions and ratings about the applicants. Team members try to be as inconspicuous as possible as they record green lights and red flags, thumbs-up and thumbs-down ratings. Even in informal settings, the Next Jumpers gather data about how well applicants listen or whether they seem blatantly rude or self-absorbed. The evaluators continuously send comments as well as quick candidate ratings.

As the day goes on, a composite picture of each candidate comes into focus. In the Super Saturday War Room set aside for synthesizing the incoming data, the recruiting team gets a clear sense of how the applicants stack up on the qualities that matter most.

  • Everyone at Super Saturday looks technically strong based on the earlier rounds of recruitment screening. But do they have the hard skills in real-life settings?
  • Are they humble? Are they willing to learn from others in order to grow?
  • Do they have grit—the persistence to see themselves through challenging times and setbacks rather than give up?
  • Are they takers? Are they in it only for themselves, or do they have the ability to be givers (helping others grow)?

Next Jump leaders say they’re looking to understand each applicant’s character. As with all companies, the leaders are certainly looking for the right fit between the applicant and the company’s culture and purpose. But like other DDOs, Next Jump is also looking for something more: the kind of person who will grow in an environment of constant practice, failing, and feedback.

When officials have made their selection, based on analyzing and debating the results collected on Super Saturday, the recruiting team will offer jobs only to those candidates who gained unanimous thumbs-up ratings, perhaps one-tenth to one-third of the candidates. As the new Next Jumpers come on board, they will be given their interview profile data from Super Saturday. On their first day of work, they’re provided with concrete feedback about areas in which they can begin improving right away.

Congratulations! Welcome to Boot Camp

The onboarding process gives new employees an intense introduction to Next Jump’s culture. Because the culture differs markedly from that of other organizations, Next Jump has found that helping people adapt as soon as they enter is the easiest time to accelerate their growth.

For their first three weeks, all new employees—including those who come with years of experience and success and are moving into senior leadership positions—attend Personal Leadership Boot Camp (PLBC for short). The program starts with participants learning to identify their character weaknesses—what Next Jump calls their “backhands.” The metaphor comes from tennis: everyone has strengths (our forehand), but to be a great tennis player, you must also work on your backhand, the areas where you feel less comfortable, less natural, less skillful.

After trying to identify people’s backhands by using long lists of psychological and character traits, the company found that most people’s deeper limitations circled back to struggling with being overly confident (for shorthand, the company refers to this, without deprecation, as “arrogant”) or being overly humble (“insecure”). At Next Jump, overcoming an “imbalance of character” in either direction is something everyone is assumed to be working on, from the cofounders to the newest engineer.

Everyone knows everyone else’s backhand, or, if they don’t, it is commonplace to inquire. Working on your backhand might mean, for someone who is on the arrogant side, trying to wait until the forty-five-minute mark to make a first comment in an hour long meeting. In contrast, someone on the insecure side, in that same meeting, might work on offering a contribution in the first fifteen minutes. Either move represents working on one’s backhand—practicing to overcome a deep-seated mind-set.

In the boot camp, participants spend the three weeks in customer service—the bread-and-butter work of maintaining relationships with individual customers. Inquiries managed by the customer service team can include everything from security and log-in issues to ordering to almost any question a customer might have for an e-commerce company.

New Next Jumpers are given daily targets for customer engagement. They are expected to take risks, to reflect on what they’re learning, and to practice their backhands. They’re also expected to engage in a “plus-1 project”: they identify a way to contribute to improving the customer service process. This personal project becomes a key practice ground that lets new workers exercise leadership in a team setting. Boot campers receive regular feedback from others (peers and managers) to help them identify weaknesses and build their leadership effectiveness.

At the end of the three-week boot camp, each employee shares her learning and experience in front of colleagues and a senior leadership committee, describing the powerful, if often painful, learning of the past weeks. The committee, based on the feedback from peers, coaches, and leaders, decides whether the employee will graduate from boot camp. If you’re voted a graduate, you receive a custom Next Jump team jacket embroidered with your name. Then your journey in the company takes its next steps.

If you don’t graduate, it’s likely because the evidence from your stint in boot camp suggests you haven’t been engaging fully and authentically. Most often, those who don’t graduate are judged to be faking it or not demonstrating that they’re striving to learn about themselves. They fail to have a “face the truth” moment, as Greg Kunkel explains. If the consensus is that you have only been going through the motions, you can accept an offer of $5,000 to leave the company, or you can return to boot camp until you graduate.

After facing their inadequacies and experimenting with new ways of working, Next Jumpers return to their primary job with a practice plan for working on their backhands. Everyone leaving boot camp develops such a plan, highlighting targeted situations to actively practice. They’re given peer mentors, who coach them, hold them accountable, and help them stick to the practice plan. And if they fail, after all this support, to keep working on their backhand? If they choose to continue, they can look forward to a new round of boot camp.

Better Me + Better You = Better Us

Next Jump sums up the belief system behind its culture with an equation:

Better Me + Better You = Better Us

Better Me signals the importance of constant improvement. You’ve seen it in action in the boot camp experience. Next Jump expects its employees to face their limitations directly and practice to overcome them. When you visit the company’s headquarters, it’s clear that the consistent work on self-improvement extends to supporting healthy lifestyles, in addition to transcending the mind-set you bring to the office. With nutritious free snacks and meals, as well as an on-premises gym and trainers, employees are expected to make a habit of good health.

Better You is about the meaning people derive from work through helping others, inside and outside the company. Next Jump’s leaders are struck by the research suggesting human beings are wired to serve others. When jobs are not meaningful, employees are more likely to volunteer outside work to derive that sense of purpose. The Next Jump response? Build service to others, and the resulting meaningfulness people derive from it, into the job. “Bake it into the culture,” says Kim.

As part of their work, Next Jumpers lead and participate in dozens of giving-back initiatives. For example, they can donate their expertise through a range of programs. Engineers can code for a cause, offering up to two weeks a year to help nonprofits in need. But cultural initiatives that lead to a Better You also serve the company’s own employees. They give everyone at Next Jump opportunities to practice leadership in settings that give employees more room to fail and learn with less risk to profitability.

Better Us is the payoff for a company, the community, and ultimately the world, built around both Better Me and Better You; it’s the outcome for everyone in the company of being more fulfilled and better off in a deeper sense. At Next Jump, the organizing belief behind these programs is that when we feel our own growth and when we engage in activities that also help others (including helping our colleagues grow), we can experience true wealth in the form of long-term, sustained happiness. This form of wealth cannot be obtained from a paycheck.

To be sure, Next Jump pays its employees well, but the outcome of sustained happiness, executives insist, can come only from a culture that makes work meaningful. To that end, in the salary review process, contributions to revenue are weighed at 50 percent and contributions to culture at 50 percent.

Next Jump leaders also note that you don’t have to be a charitable or nonprofit organization to give people opportunities for meaningful work. The company’s culture initiatives create opportunities as well as recognition for helping others. Programs range from a team that serves breakfast to Next Jump colleagues, to creating internal engineer skill-development newsletters, to hosting a Vendor Appreciation Day. In addition to giving meaning to work, cultural initiatives provide a place for workers to practice self-improvement and program leadership and even to fail big in circumstances where failure is less risky than it would be on the revenue-generating side of the corporate perks business.

FLO: Growing Leaders

To accelerate people’s growth, Next Jump has a system of clearly defined roles in the leadership teams that implement cultural initiatives. They call this model the follower-leader organization (FLO).

FLO involves four key roles: captain, coach, right hand, and left hand. Heading up a culture initiative is the role of the captain. At the heart of FLO’s design is the role of the coach, which is filled by the person who most recently captained the same initiative. Her job, above all else, is to coach the captain in leadership and provide feedback that will help the captain develop his backhand.

The right hand is the team member who works closely with the captain, knowing that she will someday soon take over as the next captain as the roles rotate. Finally, the left hand is another team member who can contribute to the success of the initiative and is next in line to succeed the right hand.

Meghan Messenger, a Next Jump cofounder, identifies what is unique about the FLO model: the coach role. “You’re sacrificing your number one player and moving them from the doing to coaching,” Messenger explains. After all, the new coach has only just learned how to lead the initiative. Wouldn’t things go better if you let captains keep running a program, to get the benefit of all their experience just when they’re getting good at the role?

This seeming sacrifice of expertise makes sense when you recognize that the main purpose of FLO is not to help people learn the ins and outs of leading a specific initiative or program. Instead, each project is a practice ground for working on your blind spots as a leader. Initiatives come and go, in a constant process of experimenting with new ways to strengthen the culture. For example, rather than develop captains to handle Super Saturdays—people who would then get better and better at leading Super Saturdays—FLO is about developing everyone’s capabilities of captaining and coaching generally.

“The work goes more slowly at first” when there’s a new captain of an initiative, Messenger acknowledges. But the trade-off is another “investment in loss.” Coaches, before rotating off an initiative entirely, develop another captain into a coach and must leave the program itself better off than when they started. Messenger has seen FLO produce consistent results over time, noting, “In the long run, we have a stronger organization with deeper bench strength.”

Jackie’s Journey

Jackie knows the backhand she is working on at Next Jump. But that wasn’t always the case.

A ten-year veteran of the company, Jackie had risen to be leader of the marketing group. Competitive and focused, she excelled in situations when she could contribute individually, such as landing a big sale. She was especially successful working with merchant partners for the company’s corporate perks program and had built a solid track record of accomplishment in sales.

But several months before we first met her, Jackie had been shocked to learn that she had been voted off MV21, the company’s leadership group. The group’s members are not selected by executives but rather are elected by peers, and people are voted off when they either fail to get enough votes or are nominated for removal by their peers. Sitting at the MV21 table is an honor that reflects the perception across the company that a Next Jumper can be counted on to help others succeed. The company’s senior leaders talk about valuing “linebackers over quarterbacks”—rewarding those who help others win rather than the star players identified as formal leaders. Jackie may have been a star negotiator of deals, but increasingly she was seen as someone who didn’t do enough to support others.

Hearing that she was voted off MV21 was “a crushing blow,” Jackie says. But feedback from others about her patterns of work had been accumulating. She was seen by her peers as working entirely for herself. She wasn’t someone you could count on to reach out and offer help. She would answer questions or respond, but she didn’t make time to give to others.

At first, Jackie tried to make sense of her rejection by her peers in ways that kept the focus off herself. She initially resisted introspection, deflecting the impact of the vote by thinking, “Oh, those newbies on MV21? They’ll fail. I’ll probably be back in three, six, ten months, tops.” But soon she saw that the new MV21 group was thriving without her.

It took a lot of reflection, coaching by company executives and peers, and the practice ground provided by working on several culture initiatives for Jackie to see the limitations of her own deep-seated mind-set. Jackie had heard others tell her what her backhand was—not helping others—but they “were others’ words, not mine.” One source of support was her boss, David. The two of them opened up to each other about their weaknesses, giving Jackie another context at Next Jump to question her patterns of behavior. Jackie began to describe her backhand in her own words rather than others’ terms.

What is the thing that is more meaningful, that is actually painful to say, that is embarrassing to say? I think that’s when you really get to your true backhand. And for me, it was that I put my own success before anyone else’s. I tend not to want to help others. I want to see myself move forward, and I am not so generous always with sharing things that may help other people.

At an event called 10X—an all-staff meeting for presenting and getting live feedback on one’s contributions to the company (which you will learn more about in chapter 4)—Jackie shared with all of Next Jump her realization about what she was focusing on in her work of self-improvement.

I realized I needed to face the truth. I am selfish, and I put my success above everyone else’s. In fact, I spent the last ten years trying to get to the top. When I looked at the reality, I saw I left hundreds of Next Jumpers behind in my quest to get to the top.

Now that I’m becoming more self-aware, I’m doing deliberate practice—practice to become a steward leader.

There is a driving force for me. There is a fear instilled in me. It’s about my two children [her voice breaks here, and she takes a moment to compose herself]. My biggest fear in life is that they are going to develop the same backhand that I have—that they are going to help themselves before they help other people.

I need to help develop others because I know it is integral to my own growth. The old Jackie would have just said, “Get back on MV21 as soon as possible.”

After making this presentation to the company, Jackie started putting herself into more situations where she could practice helping others be successful. She started small at first, coaching others once a month. “Even that was painful for me at first,” she admits. Pretty soon, she was doing it weekly for offices and people outside her immediate group, such as the London office—peers she wouldn’t have made time for before.

After a while, as Jackie increased her coaching to all-day sessions on Mondays, her peers started to see her taking risks and extending herself regularly for her colleagues and for the good of the company. Jackie says, “People saw where I was spending my time. And still getting my job done, which I didn’t think was possible. I really thought that if I spent too much time with other people, I wouldn’t be successful.” Less than a year later, members of MV21 voted her back onto the group, something she had thought could never happen. She is confident she knows why: it is because she is starting to demonstrate a qualitatively different kind of success. Not only is she spending time developing others, but also she and other Next Jumpers can see the benefits to people across the company that are flowing from her new way of working.

Jackie’s story is one of many similar ones at Next Jump. Running through each is a common thread. People are working on themselves at work as part of improving the company. Jackie sums up the reasons she is growing because of the company and believes that others are as well.

Some days are better than others, but I think that’s what is so great. And this may sound cliché, too, but Next Jump really does give you this platform to constantly practice. And if I have bad days, then the next day can be a good day. I don’t really have to have that fear of failure.

Decurion: Creating Places for People to Flourish

Feast on your imperfections, or starve on your ego.

—Bryan Ungard, Decurion

It’s early in the morning on the top floor of the ArcLight Hollywood cinema multiplex. Colleagues are milling around the main conference room, laughing, talking about the 101 Freeway traffic, and pouring coffee and grabbing a muffin before the meeting gets under way. Nora Dashwood, chief operating officer, is bringing together key leaders from the home office with the general managers of each of the locations. The occasion is a regular meeting known as the theater work group.

If you watch television coverage of the entertainment industry, you may have seen ArcLight Hollywood as the backdrop for a star-studded event. The flagship location—which anchors a shopping complex near the corner of Sunset Boulevard and Vine Street in the heart of historic Hollywood—is owned by the real estate arm of its parent company, The Decurion Corporation. The multiplex, with its soaring glass lobby, is fronted by an entrance plaza large enough to accommodate red carpets for a film premiere or welcome lines of sneak-peek fans for major preview screenings. Hollywood is an industry town, and ArcLight is known as Hollywood’s favorite place to enjoy a movie.

Joining the Community: The Theater Work Group

There is no meeting table this morning for the twenty or so theater work group attendees. Instead, the chairs are arranged to form a large circle so that everyone can see all the faces. As you will see, creating the conditions for people to feel joined together in a community as they work is the foundation of every meeting at Decurion.

Around the room, posters remind employees of the beliefs and values of the company. Decurion calls these its “axioms”—statements of the company’s “fundamental beliefs about people and work.”

  1. We believe that work is meaningful, that work gives meaning to people’s lives. For us, meaning comes from three things: developing oneself, creating something excellent and enduring, and contributing to other people.
  2. We believe that people are not only means but also ends in themselves. Most businesses view people (employees, customers, suppliers, and others) as a means to some end, such as completing a transaction or meeting a goal. We feel that reducing people to a role in a process dehumanizes them. While honoring the roles they play, we approach people as fellow human beings, as ends in themselves.
  3. We believe that individuals and communities naturally develop. Much of the literature on development ends with the teenage years. But we know that adults continue to develop. Our structures and practices create conditions that pull people into greater levels of complexity and wholeness.
  4. And while we did not begin with this belief, our experience has shown us that pursuing profitability and human growth emerges as one thing. They are part of a single whole, not two things to be traded off or two elements of a “double bottom line.” We capture this axiom by saying that nothing extra is required.

These axioms offer a common language and touchstone for the company’s bedrock principles. No member of the company (and member is the preferred term for an employee here) is required to believe that these axioms are true. But each member, and especially each manager, is expected to act in accordance with the axioms as part of his job responsibilities.

In the discussion this morning, these beliefs will be put into service. Dashwood knows that the theater work group must join in a challenging conversation. As people take their seats, the room grows quiet. Around the circle, people look comfortable. No one is peeking at mobile devices or laptops. Some are visibly relaxed, settling into a moment of silent reflection, and making a transition from the bubbly chat over coffee a moment before.

Dashwood brings everyone together by inviting them to check in. At Decurion, most meetings begin with a practice of checking in that can take up to an hour with a group this large.

What goes on during a check-in? First, when people choose to speak (all speaking is voluntary), they often begin by saying their name (“Hi, I am Carlos”), even though it would be rare for anyone not to know the name of another team member. They do it to remind themselves, and their teammates, that they seek to stand fully in whatever they’re about to say, that it comes from their person and not their role.

They then say whatever they need to, to bring themselves fully, as whole people, into the work space. They may share an internal state, such as feeling excited or nervous, or they may report where they are on an interior goal—for example, how they see this meeting as a chance to engage their efforts to listen better to others’ competing ideas. Or they might let the group in on something that is happening at home that is inevitably part of how they are “showing up at work” that day—that the celebration of a daughter’s first Communion is coming up or that visiting family members are wearing out their welcome. COO Bryan Ungard explains the practice: “It’s about what the individual needs to do to be fully present—it can’t be scripted. As soon as you script it, you drive the meaning out. Our full humanity is required, and to have that, you need authentic engagement.”

Check-ins are part of honoring Decurion’s axioms. If people are to be treated as more than a means to an end and are worthy of unconditional regard as developing adults, then check-ins present constantly threaded opportunities to bring that humanity—and each member’s interior life—to the foreground. The culture as a whole places inner experience in bounds rather than out-of-bounds in the life of the workplace. Decurion exposes and overturns the assumption that work is public and the personal is private, and so the personal should not be part of work. In the same way, Decurion rejects the idea of work-life balance as a simple goal or mantra. After all, if your life is everything outside the workplace, then that leaves a bleak notion of what work is—something that we’re forced to trade off against joyful living.

Everyone who has ever worked anywhere knows that work is intensely personal, with daily opportunities to experience pain, exhilaration, self-doubt, and meaning. We all bring our whole selves to work every day: “Wherever you go, there you are.” In a DDO such as Decurion, practices like check-ins openly welcome the whole person into work every day.

And at the end of any meeting, there is a check-out as well. Checking out is routinely briefer but an important ritual. As they check out—again speaking as they are moved to speak—members share personal reflections or feelings that allow them to end well. Whether it’s an expression of excitement about the work ahead, a sense of having broken through on something challenging, or even a need for greater support from others, check-out brings closure through another moment of focusing on people’s individual presence and humanity. By building checking in and checking out into every meeting, Decurion members ensure that focusing on individual mind-sets and growth becomes a habit. More than that, the habit is part of creating and maintaining a sense of strong community.

In the meeting that day in Hollywood, as people connect to one another and the conversation moves forward, Dashwood continues to create the conditions for authentic and productive dialogue. Decurion members call this “setting the field,” borrowing a term from Joseph Jaworksi, Kaz Gozdz, and Peter Senge that has deeply influenced the company.3 This practice, which is also a part of most meetings, involves taking the time to help people see how the present business challenge is connected with their individual sense of meaning about the work and with the collective power of the group to do the work as a community.

Dashwood speaks with authority but in a spirit of invitation. Her engagement appears total, and she calls people to lean in together for the work ahead.

This morning we are going to be practicing with one another. We’ve got a real-life work situation, and we need to work through it as a community. And I think we can use this to keep developing the level of competency we need as a business to meet our top-line goals for the coming year.

This really ties to what we were talking about at the most recent DBL [Decurion business leadership, a companywide meeting]. These are the requirements that we have as a company—that the business is flourishing, that we are getting superior results, that we are doing the adaptive things we need to do, that our guests in the theaters are having their lives changed for the better through the quality of the experience they have. We are developing an offering with a distinctive impact in the market—and if it disappeared, you just couldn’t get it anywhere else.

As we do this, we are working to be more autonomous, experiencing our own well-being, advancing personally and professionally, and moving toward what we each want out of our own lives. So, we’ve got an important business initiative, our customer loyalty program. It’s key to unlocking three million dollars in additional revenue we need moving into the next year. But we don’t seem to be having a singular conversation at the leadership level and as a community about how that work is going.

Dashwood’s work of setting the field for this conversation is designed to create a space for several things to emerge. There is no doubt on the part of the theater work group members that their COO is calling them together to work as a community. But how does that experience at Decurion differ from merely having a clear agenda, or reaffirming the goals of a meeting?

In this case, members of IT and marketing, as well as theater-operations leaders in the division, are working to retire the existing membership loyalty program and develop a new offering, including revitalizing all aspects of the customer loyalty experience. But communication in the organization has ruptured, and it needs to be addressed collectively. Status updates from all sides, a dressing- down, a directed solution—these wouldn’t help meet the developmental goals that Dashwood has just invited everyone in the room to hold on to together.

In the Fishbowl

Instead, Dashwood is doing something that’s common at Decurion. Rather than jump to solve the problem, the group members will try to let the problem solve them, exposing issues and patterns of thinking that go much deeper than the immediate circumstances. Dashwood invites Bob, a senior leader on the operations side, to facilitate a “fishbowl” conversation, and she asks several individuals (whom she has asked in advance to participate) to step forward. These four people—those most directly implicated in the pattern of conflict and misunderstanding in the work-group circle—pull their chairs into a small, tight circle-within-a-circle at the center of the room. This small group includes the head of the loyalty program from the marketing side, the technology lead, one of the general managers from theater operations, and Bob.

Their colleagues remain seated in the outer circle, bearing witness and participating by their active listening and presence and, if required, joining in the inner-circle dialogue spontaneously. Whether sitting inside or outside the fishbowl, everyone is expected to get better at spotting and fully stepping into opportunities for overcoming limiting behaviors and the underlying mind-sets that generate them.

Bob begins the fishbowl by reminding everyone of the shared norms for these conversations. They are a learning community, and he spotlights several ground rules to create healthy dialogue, including speaking from your own experience and not leaping to inferences about what others believe. He frames this dialogue as a discussion of whether people are aligned: “I’m concerned. I can’t tell whether this initiative is on track or not. There are conflicting reports, depending on who I talk to.”

Bob focuses everyone on uncovering data—not quantitative metrics, but the kind of evidence from multiple perspectives that will help the group sort out what is going on and why: “How can we know whether we are on track through looking at the data? A place we can start is to ask what we think is working well and what’s not working well, both in and outside of the circle. Let’s start by surfacing what’s true for each of us.”

As the conversation develops, Bob leans in close, and the four people in the fishbowl seem to be trying to focus on each other’s eyes. Those in the outer circle seem to feel the intensity and vulnerability of those in the fishbowl. This is not a shark tank but rather a respectful and brave space. For everyone in the room, there is nowhere else in the world right now but here.

The fishbowl brings to the surface a range of complicated feelings and candid insights. The marketing manager shares her view that the design and development process of the loyalty program has left her feeling isolated. “For months,” she says, “I felt like I was being tested, pointed at, like I was sent off to a desert island, and I didn’t feel like I had any support of a community in this. When I tried to raise issues, I felt like I didn’t make a lot of headway.” But she also acknowledges her own part in the dynamic—that she herself didn’t do an effective job of communicating clearly what was going on for her. “I should have stood my ground,” she says.

The theater general manager admits that his interactions with the technology lead feel “off.” He says that their phone conversations are rushed, and they’re not getting to the point where he is able to provide his ground-level, operational input to enhance the theater guest’s journey through the loyalty program. He, too, acknowledges his own role and needs in the situation. Working directly with major vendors, he says, is new for him. He feels he needs to ask questions, and he needs his questions to be heard. He also needs to feel joined in a common effort, and he realizes how frustrated he becomes when he is not experiencing that kind of alignment.

The technology lead, for his part, shares his sense of pressing urgency to get the technical work done. He’s trying to navigate the tension between meeting his responsibilities and keeping the theater manager closely involved. In talking about the quality of their phone conversations, the technology lead has his own take. “I’m stuck. Do we push ‘reset’ on the project to bring you in, or do we help you come up alongside us where we already are?” He concedes that he has more to do to build trust. He wants to better understand whether he’s not structuring their check-in calls appropriately or if he’s not listening to others well, despite having the right work structure and routines.

Dashwood has been a silent listener as the dialogue unfolds, taking her place among the other work group members in the outer circle. Now she stands and pulls her chair into the heart of the circle. “I felt the need to join,” she says. “I’ve been trying not to be a bull in a china shop here,” she adds, laughing as she acknowledges how hard it was to listen to the fishbowl without intervening. As you become better acquainted with Dashwood’s inner work in chapter 6, one piece of her personal “curriculum” as a leader is knowing when to exert authority and when to release control and responsibility to others.

Now she is coming to a conclusion. “I’m hearing that we have not structured ourselves effectively to make the best loyalty program. Was anyone pulling the alarm bell here and saying, ‘We’ve got a problem?’” She continues, before the conversation closes, to ensure that everyone agrees that additional customer testing of the online experience needs to happen immediately.

As the fishbowl discussion comes to an end, a marketing manager calls on her colleagues to look more deeply at what has been going on in this fishbowl: “We sometimes think we should keep our heads down and think we are working with intention, but that can be disruptive for the business. This discussion felt like it was doing the right thing for the business. The loyalty program is a huge developmental opportunity for me and for the whole group. But there is something for us to take away about involving the right parties in the right way from the start.”

Another theater manager closes the conversation with a similar reflection: “I felt leadership here. We were dealing with a difficult issue, but we need to do that in order to take the next step that the business needs.”

Decurion’s Approach to Business

Decurion has come to operate in this way more fully only in the past decade, under the leadership of its current president, Christopher Forman. The company is a relative rarity in the business world: a family-owned business that has made a successful transition to a third generation of leadership and growth. Based in Los Angeles, Decurion employs about eleven hundred members and is the parent company of a set of subsidiary businesses that span several industries: movie exhibition, real estate, and senior living.

The movie exhibition business provided the seed corn. Pacific Theatres, founded in 1946 and for decades the name of the company, was a major regional exhibitor on the West Coast and in Hawaii, even recognized with a technical Academy Award (an “Oscar”) for its pioneering practices. The company was a leading owner-developer of drive-in movie theaters as well as cineplexes. As the business for drive-in movies declined and the company invested in growing its walk-in theaters, it held on to enviable real estate assets: large former drive-in parcels in the heart of California’s metropolitan landscape, the Pacific Northwest, and Hawaii. These properties allowed Decurion’s Robertson Properties Group to grow. In 2011, Retail Traffic magazine named it one of the one hundred largest shopping center owners in the United States.

ArcLight Cinemas, launched in 2002 as a new subsidiary, was founded to provide a structure for rethinking the quality and experience of going to the movies. The guest’s experience from start to finish is central in every way—from the quality of personal engagement in guest service, to reserved seating for every show, to the concessions, bar, and restaurant offerings. ArcLight’s success was not immediate, but Forman and his senior team (including Dashwood) stuck by the concept to see it take off. Revenues grew by 72 percent, to $81 million, from 2009 to 2013. Pacific and ArcLight combined now have the highest gross per screen in North America, and in 2012 Forbes magazine named the ArcLight Hollywood location one of the ten best movie theaters in the country.

Forman describes those early days of creating ArcLight as similar to the origins of Saturn Corporation, which was protected from the culture of General Motors. In ArcLight, Forman was attempting to create a place to practice a new way of doing business, distant from the gravitational drag of the Pacific Theatres group. The way of doing business in the family company in 1989, when he took an increased role in its leadership, lacked the compass it needed, Forman explains.

I returned to the company from business school with shiny new tools, things like budgeting (which the company had never done), strategic planning, and statistical analysis. With much enthusiasm, I deployed them, and then with equal disappointment, I saw them rejected. The people at the company just didn’t see the point. And there were really two aspects to that. They didn’t see that these tools would necessarily help us be more profitable. And they also pointed to a lack of context. Why should we do these things? What’s the bigger picture that these fit into? The second question was really the more important one.

Over time, I came to formulate my purpose as providing contexts for people to flourish . . . And it is the animating purpose of Decurion. I love movies like Brazil and The Hudsucker Proxy, because they capture and warn us of the dehumanizing reality in too many businesses. Decurion is a place of wholeness, of connection, of excellence, and of meaning . . . but that didn’t happen overnight. [In those days], the values were present at the company, but I wasn’t happy with the ways we were expressing them. Caring about people showed up as paternalism. I saw a lot of loyalty to my family and to people, rather than loyalty to principles. And so, I thought, I’m not comfortable with that. It has to change.

COO Ungard echoes Forman in describing the change that took place. Caring for people would no longer be about loyalty between company and employees, about protecting people. Rather, Decurion’s purpose—its reason for existence and its deepest “why?”—is to create places for people to flourish. But flourishing isn’t about having fun or keeping people sheltered from threat, challenge, or risk to the self. Ungard explains.

People entering Decurion have an idea about what it’s going to be like, but three or four months later everyone thinks, “It’s not what I thought it would be.”

When people hear “flourishing,” they think of appreciation and good feelings. But growth and development does not always equal “feeling good.” Our culture is not about maximizing the minutes you feel good at work. We don’t define flourishing by sitting-around-the-campfire moments. We ask people to do seemingly impossible things.

We’ve learned, also, when we are onboarding people to our culture, we have to manage their expectations. We say, “It will be hard, but it will be rewarding. You won’t get it right away. And you won’t be given any time to sit on the sidelines and just observe. You will be part of our practice from the start, asked to jump in right away, even when you are thinking, ‘But I don’t know anything yet!”’ No one is an observer. You must include yourself. Building community means inclusion—new entrants are welcomed, affirmed.

Working life at Decurion is organized around this idea of community. There still is a hierarchy; this is a profit-making, privately held business, and not a cooperative. There must be accountability in individual roles for decisions that affect the business.

That said, what’s different at Decurion? Members of the company participate in communal governance structures such as the theater work group because they provide a setting for deep personal learning and improved business decisions for the company. These structures are not only a necessary support for individual growth but also a form of collective wisdom. The groups share responsibility for the success of the business, even if individual business leaders hold accountability. Communities have a say; they’re expected to help seize opportunities and spot problems at their source.

The collective wisdom in a community, Decurion executives say, also grows and develops over time. People still report to one another, people are let go, and people are overruled on decisions, but the structure of a learning community like the theater work group pushes every member to “hold the whole of the business” and to be “businesspeople first,” looking at the wider success of the company, rather than being trapped myopically in a particular role or function.

Ungard underscores the power of community at Decurion, and he cautions that outsiders may be tempted to reduce this idea to the familiar concepts of “team” or “committee.” That would miss something.

When authentic community forms in groups, learning happens: a collective intelligence. A learning community is such a different animal than a “committee.” It’s greater than the sum of its parts and can handle far greater complexity than a group of brilliant individuals. Something magical and important happens in a learning community that we use as a foundational element everywhere in the company. Community has a method. There is a way of building it. It has particular phases it goes through, and there are ways of practicing it—principles, practices, guidelines of a learning community . . . We use community to be simultaneously communal and hierarchical.

This emphasis on learning communities enables another feature of Decurion’s culture. Because people are joined together in common responsibility for running the business, it’s possible for people to be more detached from titles and roles. When you attend meetings, you generally don’t hear references to titles. It’s not that roles and titles don’t exist but that Decurion’s strong ethos pulls against attachment to one’s expert role, particularly in the context of learning communities.

A saying at Decurion is that you should always be “giving your job away.” Rather than stand on the authority of expertise or title, everyone should try to share hard-earned wisdom. It’s an alternative to the view that an individual’s knowledge is power and that one should take advantage of information asymmetries to gain the advantage in a corporate jungle. That framing, however apt a description for many business contexts, is anathema to Decurion’s leaders—even a description of organizational failure to live up to the beliefs that undergird the company. But it’s not collective naïveté about power and status that motivates this view. Rather, the company wants to help every member break with the instinct to hoard information, to seek advantage by protecting one’s base of authority and power, and to squander time managing others’ favorable impressions. Jobs here are designed not to be “person-dependent.”

Dashwood, for her part, sees the power for achieving business results in weaving together peer-to-peer communities with hierarchical leadership, as everyone sheds the safety of being the indispensable expert.

It gets at a lot of the energy and the waste that’s spent in people not being fully engaged in the work, and feeling like they are healthy in what they’re doing. It’s about the effect on the business, the customer, and the working environment. But it has the effect of people making better decisions. It’s a healthier environment. I’ve never experienced that in my career before Decurion. That’s a whole different way of being. It is a work environment that requires managers, senior managers, directors, VPs, to work on building trust in each other, to work on not being tied to their roles, identities, fiefdoms, or to protecting themselves over the needs of the business or the effectiveness of others and the group.

Dashwood’s Challenge

During the theater work group meeting that we joined, Dashwood was conscious of the individual growth she is seeking for herself as a leader. To her credit, she strives to develop her capabilities even after nearly four decades in the exhibition industry. It is a consistent mark of the DDOs we studied that the senior people are as deeply engaged in the personal growth journey as the newest hires. Working at Decurion has helped Dashwood explore the mind-set driving her day-to-day actions, and, in settings where there is a learning community to help her, she frequently practices new ways of being and seeing. In some ways, the very things she is working on with the greatest clarity are the shadow side of the confidence that led her to Decurion.

Hired in 2000 to lead Pacific Theatres and shortly thereafter asked to launch ArcLight Cinemas, Dashwood came to Decurion from a major national theater chain where she had worked for twenty-three years, rising from her first high school job behind a concession stand to become a senior operations executive. She was brought to Christopher Forman’s attention by someone who referred to Dashwood as the best theater operations executive in the country, and that’s the kind of person Forman wanted to oversee the company’s theater business.

Within a couple of years of joining Decurion, when ArcLight was the proving ground for creating a new kind of culture in the company, Dashwood was getting feedback about her limitations.

I started bumping up against some walls. I started hearing feedback from Chris, and from others around me, that the way I was leading was actually holding people back. And at forty-two years old, and it is humbling for me to say this, I had never gotten feedback that anything I was doing in business wasn’t just beyond reproach. So, I’ve got to tell you, I was kicking and screaming, and I would have fired myself five times in terms of how I resisted the feedback and the coaching. I mean, I listened to it all, but I literally couldn’t see it. I didn’t know what to do with it.

She recalls one exchange, in a community setting much like the theater work group, that marked a turning point for her in a moment of insight.

I was in a meeting, and a theater assistant manager in his early twenties said to me that he felt that when things weren’t going the way I wanted them to go, he could feel the air in the room turn cold.

She chokes up a little and then continues.

He never would have been able to say that if it hadn’t been for Decurion not only allowing but requiring its members to give feedback to each other regardless of position or tenure so that we can form effective business communities. I call that assistant manager my “canary in a coal mine.” This manager’s observation shifted my ability to see and understand that there was another way, that aspects of how I led were creating barriers for others. That what he felt as the room going cold was me withdrawing my goodwill and closing my heart to others because things were not going the way I thought they should.

I didn’t know if I could do it, but I now knew that to be more effective as a leader and more of who I wanted to be as a person, I needed to be with the people as they engaged in their work. That for people to be able to flourish, they would need to do it in their own way, and not the way I thought was the way. The business requirement and practices of Decurion allowed me to become aware of my deeply held assumptions and beliefs about what it means to be a leader, to be a mentor, to be with a community, and to count on other people.

Growing up with very loving, strong-willed, independent, immigrant parents, I absorbed a consistent, powerful message. The message was that you need to take care of yourself because no one else will. That if you want all that life has to offer you, you need to count on yourself and take charge. That if you are not leading, you might as well be failing. I became very good at taking charge and counting on my abilities to get what I wanted. But you can only go so far with that mind-set.

Now, I can see more and I am a better listener. I am more aware. I have a community that supports and challenges me. What I have learned at Decurion is that I can be a part of something that produces results much bigger than I can produce on my own. It was the hardest thing I’ve ever done and it has been the most meaningful growth and development I’ve ever experienced.

As she creates the fishbowl space for the theater work group community, Dashwood continues her own work on leading others without “withdrawing her goodwill” when they don’t see the world her way. In other words, the question she struggles with is, “How can I keep holding high standards for excellence in the business while at the same time allowing others to step forward with their own ideas and solutions, even if they are at odds with my instincts and preferred pathway for getting the work done (‘the way Nora would do it’)?”

Dashwood has been testing her assumptions—that others won’t get it right unless they do it her way and that she can rely only on herself—in other situations, too. One opportunity arose from her growing frustration with the design of a company website. Her first instinct was to gather everyone together and get into the thick of designing a better site, and then get everyone working fast on implementing it. But she resisted that impulse. Instead, she took the problem as an opportunity to delegate and empower a group to produce the new design.

She had a conversation with her colleagues, discussing her expectations and standards but without doing the work for them. Empowering the team, she realized, didn’t mean that she wouldn’t give feedback on the evolving work. In fact, when the first site design was “just OK,” Dashwood again resisted jumping in, instead working to help guide the group on how they could discover a better solution. They came back with a much better result, something she admits surprised her, given her habitual pattern of thinking she couldn’t trust others to get to a good solution on their own.

What did Dashwood discover about herself? She learned she could let others take up the work with accountability, rather than feeling that the only viable option, when something important is facing the business, was to take charge of doing it herself.

The fishbowl, then, is another “practice field,” in Decurion’s term, for everyone involved, including Dashwood. It’s both a way to move the business ahead—removing roadblocks to collaboration—and a way to work on helping people grow. For her own growth, Dashwood is using the fishbowl to explore navigating the balance between, on the one hand, having a clear vision as a leader and being accountable for the business and, on the other hand, allowing the members of the theater work group to step into individual and collective responsibility for an excellent loyalty product. She is creating a context for them to grow by tackling the live problems of the business, as individuals and as a learning community. They, in turn, are providing her with a setting to keep pushing beyond her own limits as a leader.

This is what the company means by taking a “nothing extra” approach (a term introduced by Kaz Gozdz, a trusted adviser whom Forman sees as the architect of its transformation). People work on overcoming their limitations as an integrated part of working through active business dilemmas—the work sitting right in front of them—and as part of the pursuit of business excellence. This is the rhythm of daily life at Decurion. And this is what trying to create places for people to flourish looks like.

Bridgewater: Getting to Root Causes

Do you worry more about how good you are—or about how fast you are learning?

—Ray Dalio, Bridgewater

If you sit in a meeting room at the Bridgewater headquarters in Westport, Connecticut, it’s apparent that you’re in an environment designed for transparency. Floor-to-ceiling windows let in sunlight and offer treetop views of the Saugatuck River, which flows through the middle of the campus. Meeting rooms have the same open windows onto the hallway. Anyone can see who’s meeting, and there’s no such thing as a private meeting. People at Bridgewater—the world’s best-performing hedge fund—use sunlight as a metaphor for the kind of culture they value, one that prizes transparency as the best disinfectant.

As you meet some of the people at Bridgewater, you learn how an unrelenting search for truth—including the often painful truths about one’s own limitations—is at the heart of every meeting, indeed every exchange of ideas. The company’s leaders will tell you this search for radical truth and radical transparency is not merely an important aspect of the culture but the heart of the culture and the reason for the company’s unparalleled success.

Sergio and the Failed Meeting

It’s 9:00 a.m. on a bright Friday morning in winter. The Bridgewater training team is holding its daily meeting. This group of about a dozen people, which reports to founder Ray Dalio, creates case-study materials for everyone in the company, part of the stream of daily learning experiences people participate in here to strengthen the culture and reinforce its values. The interactive video cases and self-assessment tools the group is creating help employees, from the newest recruit to the most senior management committee members, interpret the core principles of the company and apply them to real-life situations. Most of the people on the curriculum team of sorts are in their early twenties and were recruited directly from Ivy League universities into their first postcollegiate jobs. They’re using their Friday meeting, as they do each week, to diagnose a problem encountered within the team and for which it is worth understanding why the problem occurred. This task is called a diagnosis.

A diagnosis is part of a five-step process that is essential to the continuing personal evolution that Dalio sees as necessary for individuals to get what they want out of life. These steps are distinct and not to be blurred together—diagnosis of a problem is not the same as designing a solution—and they begin with setting goals based on your values:

  1. Setting goals. You can have virtually anything you want, but you can’t have everything you want . . . To achieve your goals, you have to prioritize, and that includes rejecting good alternatives.
  2. Identifying and not tolerating problems. Most problems are potential improvements screaming at you . . . The more painful the problem, the louder it is screaming. In order to be successful, you have to (1) perceive problems and (2) not tolerate them . . . So push through the pain of facing your problems, knowing you will end up in a much better place.
  3. Diagnosing the problems. You must be calm and logical . . . You must get at the root causes . . . the deep-seated reasons behind the actions that cause problems . . . Recognizing and learning from one’s mistakes and the mistakes of others who affect outcomes is critical to eliminating problems . . . More than anything else, what differentiates people who live up to their potential from those who don’t is a willingness to look at themselves and others objectively . . . The most important qualities for successfully diagnosing problems are logic, the ability to see multiple possibilities, and the willingness to touch people’s nerves to overcome the ego barriers that stand in the way of truth.
  4. Designing the plan (determining the solutions). Creating a design is like writing a movie script in that you visualize who will do what through time in order to achieve the goal . . . When designing solutions, the objective is to change how you do things so that problems don’t recur—or recur so often. Think about each problem individually, and as the product of root causes—like the outcomes produced by a machine. Then think about how the machine should be changed to produce good outcomes rather than bad ones . . . Designing precedes doing!
  5. Doing the tasks. Great planners who don’t carry out their plans go nowhere. You need to “push through” to accomplish the goals . . . People who are good at this stage can reliably execute a plan . . . If they see that daily tasks are taking them away from executing the plan (i.e., they identify this problem), they diagnose it and design how they can deal with both the daily tasks and moving forward with the plan.

In the five-step process, diagnosing problems is the key to learning about the sources of your limitations. It’s not enough at Bridgewater to recognize that you or someone else made a mistake, although that’s a start (and it means you’re at least showing some sign of “not tolerating badness,” as Dalio puts it). Instead of identifying the mistake and jumping to solutions—solving the problem—you are pushed first to systematically unearth the limitations in your and others’ thinking that lie behind the mistake. What can you learn about “the deeper whys,” as people at Bridgewater say—focusing relentlessly on the root causes of behavior rather than the behavior itself?

The team’s diagnosis of a problem this morning centers on Sergio. The entire group has just spent time discussing Sergio’s most recent review. On any given day, all employees are getting and giving feedback from multiple sources about how they’re doing their jobs. Nothing in a formal review comes as a surprise. But it’s also expected that individual reviews will be discussed with the entire team and with total candor. Niko Canner, a former member of the company’s management committee, is leading the meeting.

More than a year earlier, Sergio told Dalio that he was interested in leaving Bridgewater to go to medical school. Dalio shared his gratitude for Sergio’s transparency but made sure to tell him that he could have a great career at Bridgewater, if that’s what he chose to do. Sergio was candid. He couldn’t help thinking, he said, that he would be disappointed in himself if he woke up at age forty-five and was managing people who were managing money.

In this morning’s meeting, Sergio is sharing a related struggle. He admits that he “feels an acute need, almost at random, to please others. That could take me in a direction I don’t want to go.” He tells his teammates that he feels stuck, torn between a desire to please Dalio by staying at Bridgewater and the pull of going to medical school and taking on a new career.

Sergio opens up about his sense of being a people pleaser. “The thing I worry about,” he says, “is pleasing whoever is in front of me.”

As the diagnosis begins, the reasons for Sergio’s recent actions in another meeting are the topic of discussion. Earlier in the week, Sergio was responsible for leading a meeting, and, in preparation, he delegated the task of creating the meeting slide deck to Virginia, a fellow team member. Sergio’s teammates who attended the earlier meeting, which was organized around the slide deck, were not impressed. The meeting was “derailed” because the slide deck contained inadequate materials to help Sergio run the meeting successfully or to cope well in the moment.

Canner, the facilitator, asks whether Sergio realized how bad the deck was. “Did you even know what you needed?” he asks. “How much did you look at the deck as a deck?” Sergio’s colleagues jump in to point out the ways the materials didn’t serve the goals of the meeting. None of this is focused on improving the quality of Virginia’s work. That’s not the point right now.

Canner and the teammates continue to ask questions and make observations. Sergio acknowledges he spent his time in the earlier meeting justifying the slide deck, even though it was patently not good enough, something he realized after the meeting. “I found myself defending a document,” he says. But to get to the deeper why, the group needs to discover what about Sergio made him do this.

Sergio offers a diagnosis. First, he didn’t have an adequate mental map of what was required to move the work forward in the meeting. He also wasn’t “in sync” (an important term at Bridgewater) with others about expectations, and he didn’t get a clear and granular picture of what was required for success. “I lost sight of the goal of the meeting,” Sergio says. “Ray [Dalio] talks about a choice between worrying if you’re looking good and achieving your goals. And I was defending the intelligence of the deck.” Now Sergio is getting to the root cause: his own need to look good and please others. It hijacked his behavior in the meeting.

The team meeting wraps up on time, just as Sergio asks for more opportunities to practice in similar situations. He tells Canner he wants to take a next step a little further down the developmental road and check in again with him, not so that Canner can “feed him fish,” Sergio says, but so that he can learn to fish.

Coming full circle, Canner summarizes some takeaways, not only for Sergio but also for the team to hear. “These failures are fuel,” Canner says. He praises Sergio for focusing on the “loops” of learning—being ready for more practice—and for now seeing clearly what the team members don’t want to do (among other things, delegate a task without a clear sense of what a good outcome looks like that meets the need and the standard of excellence).

In parting words that are typical at the end of a meeting here, capping a high-energy Socratic dialogue designed to get to the truth, Sergio acknowledges, “We’re probably in agreement.”

An Idea Meritocracy

Bridgewater Associates manages approximately $165 billion in global investments in two hedge funds: Pure Alpha Strategy and All Weather Strategy. The company serves institutional clients, such as foreign governments, central banks, corporate and public pension funds, university endowments, and charitable foundations. Bridgewater began in Ray Dalio’s two-bedroom apartment in 1975 and is still privately held. There are about fifteen hundred employees.

Throughout its nearly four decades, Bridgewater has been recognized as a top-performing money manager; it has won more than forty industry awards in the past five years alone. At the time of this writing, the Pure Alpha fund has had only one losing year and has gained an average of 14 percent per year since its founding in 1991. The All Weather fund, which is designed to make money during good times and bad, has been up 9.5 percent per year since its launch, in 1996, and delivered an astonishing 34 percent return from 2009 through 2011, even as the hedge fund industry as a whole underperformed the S&P 500. In both 2010 and 2011 Bridgewater was ranked by Institutional Investor’s Alpha as the largest and best-performing hedge fund manager in the world. And in 2012, Economist credited the firm with having made more money for its investors than any other hedge fund in history.

Greg Jensen, co-CEO, explains that all this success derives from the company’s approach to its principles, a source of “compounding understanding,” much like compound interest, over time.

The thing that we found . . . in our business, and I think for most businesses, you have to have better ideas than other people. That’s basically what it comes down to. We’re competing against everyone in the markets. The market price is a weighted-average view of what’s going to happen in the future. The only way you can know something better is to have a better understanding of what can happen in the future. So, it’s a perfect form of idea meritocracy. And for us the building blocks of that, of creating an idea meritocracy, is having a shared, transparent set of principles, so that everybody understands the roles, the constitution of the place . . . We have this notion about the constitution of the company that these are the principles. So that every decision, we are reflecting on, “What principles are at play? And how do you take this decision with respect to those principles?” . . . When we change our views, we’ll change it there, so that people can keep learning from that compounding understanding and thirty-five years of running this business . . . If you disagree with the principles, you gotta fight like hell. There’s no behind-the-corner talk.

In the algorithms of its proprietary systems, the company has recorded all its technical investment knowledge—a set of principles to guide investing. As many as 98 percent of Bridgewater’s financial decisions are executed automatically based on that set of codified market decision rules. In contrast, the “Principles” document—the Bridgewater constitution, which all citizens of the company seek to uphold (or “fight like hell” to change, if they disagree)—is not about the laws of finance, the market economy, or investing. Instead, it’s about the ways people act to foster and preserve a culture of truth and transparency. The principles set a clear bar of excellence for all decision making and are the common textual and conceptual reference for every Bridgewater employee seeking to act in a principled way.

The principles, which number more than two hundred, are organized in several categories, each building out to a core takeaway through a collection of related ideas. The following summarizes some of these foundational beliefs.

  • Trust in truth. Be radically transparent, be extremely open, and don’t tolerate dishonesty.
  • Create a culture in which it is OK to make mistakes but unacceptable not to identify, analyze, and learn from them. Do not feel bad about your mistakes or those of others. Love them! Don’t worry about looking good—worry about achieving your goals. When you experience pain, remember to reflect.
  • Constantly get in sync. Talk about “Is it true?” and “Does it make sense?” Be assertive and open-minded at the same time. Don’t treat all opinions as equally valuable. Consider your own and others’ “believabilities.” Spend lavishly on the time and energy you devote to getting in sync because it’s the best investment you can make.
  • Get the right people. Remember that almost everything good comes from having great people operating in a great culture. First, match the person to the design.
  • Recognize that people are built very differently. Understand what each person who works for you is like so that you know what to expect from them. Don’t hide these differences. Explore them openly with the goal of figuring out how you and your people are built so that you can put the right people in the right jobs and clearly assign responsibilities.
  • Manage as someone who is designing and operating a machine to achieve the goal. Constantly compare your outcomes to your goals. Conduct the discussion at two levels when a problem occurs: (1) the “machine” level discussion of why the machine produced that outcome and (2) the “case at hand” discussion of what to do now about the problem. Hold people accountable and appreciate them holding you accountable. Logic, reason, and common sense must trump everything else in decision making.
  • Probe deep and hard to learn what to expect from your “machine.” Constantly probe the people who report to you, and encourage them to probe you. Remember that few people see themselves objectively, so it’s important to welcome probing and to probe others. Don’t “pick your battles.” Fight them all. Make the probing transparent rather than private.
  • Evaluate people accurately, not “kindly.” Understand that you and the people you manage will go through a process of personal evolution. Help people through the pain that comes with exploring their weaknesses.
  • Train and test people through experiences. Remember that everything is a case study. Teach your people to fish rather than give them fish.
  • Sort people into other jobs at Bridgewater, or remove them from Bridgewater. When you find that someone is not a good “click” for a job, get them out of it ASAP. Do not lower the bar.
  • Know how to perceive problems effectively. Understand that problems are the fuel for improvement. Don’t tolerate badness. Don’t use the anonymous “we” and “they,” because that masks personal responsibility—use specific names.
  • Diagnose to understand what the problems are symptomatic of. Recognize that all problems are just manifestations of their root causes, so diagnose to understand what the problems are symptomatic of. Remember that a proper diagnosis requires a quality, collaborative, and honest discussion to get at the truth.
  • Design your machine to achieve your goals. Remember: you are designing a “machine” or system that will produce outcomes. Most importantly, build the organization around goals rather than tasks. Build your organization from the top down.
  • Recognize the power of knowing how to deal with not knowing. Remember that your goal is to find the best answer, not to give the best one you have. Constantly worry about what you are missing.
  • Synthesize. Understand and connect the dots. Avoid the temptation to compromise on that which is uncompromisable. Don’t try to please everyone.

Bridgewater’s commitment to radical truth, as elaborated in these principles, is anchored in a demand for excellence through constant improvement. The company leaders see all of its processes through the image of a machine—an inevitably imperfect but improvable system.

The economy is likewise described at Bridgewater as a machine that produces outputs, and, by any accounting, the company has developed penetrating insight into the workings of the machine. But human-designed processes within the company are also viewed as machines. Each process—from the hiring of new Bridgewater recruits, to the way the desktop technology support team manages software installation, to the approach to developing training case videos—delivers on specific goals and is designed to work in more or less effective ways to produce outcomes. Enhancing the functioning of the company’s many processes—its machines—requires a constant search for the truth about how things are actually going and what needs to be learned by whom if there’s a problem.

Probing and Transparency

“Probing” at Bridgewater is a way to understand the deeper whys. In probing, you ask someone questions about the design of a specific process, about a problem, or about the person’s actions or inaction.

Probing also allows people, in an inquiry-based culture, to ensure that they’re aligned in looking at the same data and zeroing in on shared causal explanations. It is the practice of figuring out what is true. It also reveals information about what people are like (the WPALs), which can help managers understand whether the source of a problem is a given person or the design of the machine—the definition of the role and workflow.

The company’s other primary commitment—to radical transparency—goes much deeper than the glass office walls. Every meeting is recorded, and (unless proprietary client information is discussed) every recording is available to every member of the organization. Each office and meeting room is equipped with audio recording technology. For example, if your boss and your boss’s boss are discussing your performance and you weren’t invited to the meeting, the recording is available for you to review. And you don’t have to scour every audio file to find out whether you were the subject of a closed-door conversation. If your name came up, you’re likely to be given a heads-up, just so that you will review the file. In effect, there is no such thing as a closed-door conversation; everything is part of a “historical record of what is true.”

Co-CEO Jensen says that in the beginning, the company’s lawyers “went nuts” about recording meetings. But after Bridgewater was sued several times and used the tapes as evidence, Jensen explains, “We won every case. We won because the tapes made clear that we were operating consistently with how we say we are operating.”

At any time, routine business conversations can shift into an opportunity for truth-telling and collective learning. It is common to pause for a “step-back moment” in the middle of a meeting to take stock of errors, to diagnose their root causes in people’s habitual actions and thinking, and to identify what individuals can do to learn from their own defensiveness. A participant whose limitations are being scrutinized might also be encouraged to “design around” those ways of thinking rather than pretend they don’t exist, using reliable peers or leaders or setting up processes that “guardrail” against failure—proactively compensate for one’s inadequacies.

At Bridgewater, every day is a kind of after-action review, although the process goes much deeper than a typical postmortem. A given conversation of this sort doesn’t stop until people have learned something about the person involved. What does what happened say about you—about how you think? And is there a higher vantage point that you can take, sitting above your own in-the-moment, reactive, defensive self—looking down to see the “you” that is messing up repeatedly and predictably? How are your actions, missteps, or successes, viewed by this “higher you,” an expression of something deeper that’s true about you? There is an urgency in asking this question each time, because if you (and others you work with) don’t figure out the deeper whys, then you’ll keep doing the same things, with similarly disappointing results.

As you might imagine, all this can be disorienting for people early in their tenure at the company—especially for people who have had professional careers at other firms where they were shining stars to be emulated and examples of what success typically looks like at work. At Bridgewater, people talk openly and honestly about the pain that can be triggered by looking closely at our own internal barriers and the root causes of things that happen at work. They refer to an equation to remind themselves and each other why they do this every day:

Pain + Reflection = Progress

Employees even have an app—the Pain Button—that is standard issue on company-provided iPads. This tool allows employees to record and share experiences of negative emotions at work—especially when their ego defenses are activated by interactions with others. Open sharing of these experiences then triggers follow-up conversations among the parties, as they seek to explore the truth and identify what individuals might do to directly address the underlying personal causes.

This practice is aimed at helping people “get to the other side”—a Bridgewater phrase for working through ego defenses, neutralizing the sting of having your mind-set questioned, and coming to actively manage forms of emotional self-protection that otherwise would be barriers to personal growth. Because learning from one’s mistakes is a job requirement, people who cannot get to the other side after sufficient time will either leave Bridgewater or be asked to go.

John Woody’s Reliability Problem

John Woody (who goes by Woody) coleads Bridgewater’s recruiting efforts. Now in his early thirties, Woody started working at the company on the team directly supporting Ray Dalio.

When we met Woody, who was also featured in a 2013 Harvard Business School case study of Bridgewater, he shared his story of growth.4 Woody has by now gotten to the other side, where he can discuss his limitations directly with anyone in the company. But there was a time when Woody could not face what he was hearing about himself. After several years in the company, Dalio directly addressed what he called Woody’s “chronic reliability issue.” Because Bridgewater records all such conversations, we can share a portion of that conversation Woody had with Dalio.

Dalio: He told you to deliver the daily updates. I told you to deliver the daily updates.

Woody: I’m in agreement about the daily updates. No question.

D: And so there are two issues. Not only aren’t you getting the daily updates, but we have a chronic reliability issue. You cannot be trusted to do the things you’re asked to do.

W: Um . . . when you take it to that level, I disagree with you. But when we’re talking about—

D: That’s your problem.

W: Well, can we explore that?

D: Yes, of course!

W: Because I think I take on massive amounts of responsibility and deliver on all of them. There are certain things that—

D: No, you don’t. It’s become a joke, about your reliability, and your reliability grades. You’re given assignments, you don’t do it. You are given the daily updates. You’re asked to do stuff. This is your problem. You don’t embrace your problem.

Woody’s reaction—in this meeting and in the weeks that followed—was to reject the harsh feedback. Dalio had “touched the nerve,” in the phrase people at Bridgewater use. Woody in turn immediately grew defensive.

Here, we pride ourselves on being logical and facing the truth, but my initial response was, “You’re wrong!” which is me already being illogical, because I’m not even asking him why he thinks I’m unreliable . . . I thought I was really open-minded, that I was [open to being] wrong in situations. And I came to realize very quickly that that wasn’t the case. That when I was challenged, it would actually emotionally impact the way I interacted. I would get heated. I would lose my logic. I would feel like when people challenged my ideas, it was almost an affront [to] me.

But pushed by Dalio and others to continue exploring his behavior—“to get past his ego”—Woody began to see some patterns over time, rather than seeing his shortcomings as exceptions or situational. He started to “come to a realization that not only is it a problem for me professionally, but it’s actually been a problem for me personally all the way back to the time where I’m eight years old.”

So then I have to ask myself, “How is it that something that has pervasively affected me since I was eight years old is something I can deny steadfastly when confronted on it as a thirty-year-old? . . . Who do I want to be?” I want to be the guy you give the ball to on the two-yard line. “We need to score, we’ve got to give it to the most dependable guy. You are the guy.” That’s who I want to be. [But] I am being confronted in the moment by someone saying, “You are not the guy. I don’t even know if you are going to be there when I try to hand the ball to you.” And that hurts, right?

Woody credits “a pretty powerful community” for helping him confront the fact that he was quick to anger and to get defensive, that he was chronically late to meetings and other commitments, and that he was someone people couldn’t rely on to follow through. Now he is at a point in his journey at Bridgewater where he is trying to “become comfortable with it, and I’m trying to change certain bits about myself that are causing problems, but I’m also much more comfortable being conscious of it.”

Woody sees the progress he’s making on his reliability problem, but he insists he still has a long way to go. It is clear, though, that he has come quite a distance: “[Now] I prioritize more ruthlessly,” he says, “pause longer and more thoughtfully before promising things to others, visualize more granularly how I will actually get something done, check in with those who ask things of me more frequently and with more questions, and lean on those around me much more explicitly now than I ever did.”

For people like Woody, who thrive in Bridgewater’s incubator for human performance, getting to the other side is not the end of a journey. But it’s a richer vista from the other side, with the hard-won ability to see and understand much more about oneself. And for most, like Woody, Pain + Reflection [+ “a pretty powerful community”] = Progress.

Summing Up

One thing is clear: none of these companies is formally in the human potential business. They are not universities filled with professional educators, or clinics or personal growth centers staffed with psychologists. They aren’t management consultancies. None of these three companies markets services related to helping people overcome their limitations. They manage hedge funds, movie theaters, and e-commerce transactions. Their businesses and products are as diverse as the companies are distant from being human services organizations. Macroeconomic investors, software engineers, and movie theater operators would probably not be your first choice of people to naturally take to the continuous levels of self-examination you’ve had a glimpse of here.

And that is the point. Although these companies develop their cultures as principled investments in their own business success, they also refuse to separate the people who make up the business from the business itself. Their big bet on a deliberately developmental culture is rooted in the unshakable belief that business can be an ideal context for people’s growth, evolution, and flourishing—and that such personal development may be the secret weapon for business success in the future.

In each of these DDOs—Next Jump, Decurion, and Bridgewater—we see a seamless integration of two pursuits as if they were a single goal: business excellence and the growth of people into more capable versions of themselves through the work of the business. Each company has its own approach, but, interestingly, what each emphasizes can be found in the others as well. Next Jump’s culture puts helping others explicitly at the forefront, including the central importance of coaching as a way to grow while serving others. Decurion builds the strength of next-generation learning communities (really, development communities) as a way to create conditions for people to both grow as individuals and seize business opportunities fully. Bridgewater stands for the pursuit of what is true, no matter how inconvenient, both as a business necessity in the financial markets and as a path for personal evolution and cultural integrity.

But underlying these approaches is a shared and surprising reversal of the most fundamental agreement in ordinary organizational life: the separation of the personal and the public. The ordinary organization is like the “old Brené Brown” as she described herself at the beginning of this chapter: it doesn’t “do” vulnerability, and it doesn’t hang out with those who do. The ordinary organization conspires with that part of its employees’ psyches that believes the place for imperfection and vulnerability and shame and unworthiness is somewhere far away from work.

(The ordinary organization says, in effect, “If vulnerability does have to come into work from time to time, then we will make provisions for it: let it go on in a private room, with others who will keep whatever they see and hear to themselves, and let it be tended to as quickly as possible, and let us do the person the courtesy of pretending it never happened”—in other words, just the way some people think we should treat nursing mothers.)

No doubt you have had a variety of reactions to what you have seen in this chapter, but almost certainly, whatever those reactions are, at their core is one thing: the way you feel about vulnerability. Your reactions may be about the way you feel about experiencing vulnerability yourself in the company of others; the way you feel about being in the presence of others’ vulnerability; and, especially, the way you feel about any of that going on at work. You can be assured that whatever your current thoughts and feelings are, every one of them has been shared—is currently being shared—by people working in a DDO. In that way, this chapter helps you meet a DDO in more ways than one.

Now that you’ve generated a variety of first impressions, the next two chapters create spaces to help you hold on to them, to turn them around in your hands, and to consider them in the context of the underlying theory of the DDO. We begin with an exploration of what development means in a deliberately developmental organization. There exists a well-worked-out theory about the trajectory of psychological development in adulthood, based on forty years of research, that we believe can help you understand the deep structure of a DDO. In essence, a DDO is working on ways to provide people the maximum exposure to those experiences likely to help them continue—when they are ready—the ongoing journey of adult development.

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