Ray Dalio explains his principles – 60 Minutes

Billionaire Ray Dalio manages the world's largest hedge fund, Bridgewater Associates, and is one of the richest Americans, with a net worth of $ 18 billion north. But it's hardly a household name. If it's known to the average American, it's probably because of his best-selling book, "Principles," sold to over 2 million copies worldwide.

While interview Dalio for the 60 minutes of this week, Correspondent Bill Whitaker asked him questions about his principles. The guidelines Dalio has established over the decades are, according to him, the key to the success of his company.

"What I stumbled upon was the idea that every time I made a decision, I wrote my criteria to make that decision," said Dalio. "And these criteria are principles, you know, they are recipes, when in that situation, what would you do?"

After defining them as a company policy, Dalio in 2017 put them together in a manifesto published by Simon & Schuster, a division of CBS. In the video above, Dalio explains some of his proven aphorisms: Shoot the people you love; pain more reflection equal progress; and pay for the person, not the job.

A billionaire hedge fund manager talks with Bill Whitaker

"When you talk to Ray Dalio, there is a little Ray Dalio talking," Whitaker said. "He speaks in a way all his own, and he talks a lot about his principles."

Dalio's principles create what he calls a "meritocracy of ideas", a system of work in which the best ideas prevail. Dalio told Whitaker that he did not want an environment in which a person or group made all the decisions. That's because no one knows what's best, he said. Instead, he wants his employees to have the opportunity to contribute and find the best ideas.

To achieve this, Dalio wants something unheard of in the world of office politics and rumors about water coolers. It demands "a radical truth" and a "radical transparency". The first means that people have to say what they honestly think. The latter means that these conversations are recorded on video and analyzed so as to keep a visible record of all.

Dalio invited the 60 Minutes cameras to a morning meeting at Bridgewater to see the practice in action. As an employee, regardless of his level of employment, all meeting attendees note their performance: am I learning something from that person? Is their presentation clear and concise? The data is collected in "points".

At meetings at Dalio & # 39; s Bridgewater Associates, employees evaluate the performance of their colleagues in real time. The data is collected in "points".

"I think you must have, not really thick skin, but you can not have thin skin, I do not think, to get through something like this," said Whitaker.

Each employee also has a "baseball card", the data collected on their strengths and weaknesses, based on feedback from all others.

Dalio recognizes that every new recruit is not receptive to his company's culture. He estimates that about 30% of new employees will leave Bridgewater in the first 18 months.

"Many people just can not stand it," said Whitaker. "It's hard to take."

Nevertheless, some employees, Whitaker, have emphasized Dalio's principles to help them recognize and improve their own weaknesses.

Something in Dalio's formula works. Employees who have been resisting Bridgewater's extreme honesty and day-to-day assessments over the past year and a half are in a $ 160 billion business that has made a profit for their clients 25 of the past 28 years.

"But you must first get used to this strangeness," Whitaker said.

To watch Bill Whitaker's 60-minute report on Ray Dalio, click here.