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Bridgewater CEO Steps Down, Putting One of the World’s Strangest Management Legacies on the Line

Bridgewater Associates founder Ray Dalio will relinquish day-to-day management duties at the world's biggest hedge fund, though his 10-year succession plan isn't playing out as smoothly as hoped.

GettyImages-465343383-compressorEven Ray Dalio admits that his firm’s corporate culture of “radical truthfulness and radical transparency” isn’t for everyone. Nonetheless, he is determined to protect his legacy, setting up a tumultuous succession plan process that has seen a growing number of promising replacements fall by the wayside.

Dalio surprised investors on Wednesday by announcing he will relinquish his co-CEO role at the firm, even as one of his recent star picks left.

Jon Rubinstein, a former senior Apple executive who helped create the iPod, was hired as co-CEO just 10 months ago. “We mutually agree that his is not a cultural fit for Bridgewater,” Dalio wrote, while announcing the management reshuffle on LinkedIn.

Rubinstein’s departure came shortly after another former co-CEO, Greg Jensen, was demoted to the position of co-CIO.

“We are very fortunate to have such a broad and deep team, especially at this time of transitions.

To be sure, by creating an unusual multi-headed management hierarchy, Dalio had a couple of other succession candidates to choose from. He will be replaced as co-CEO by company president David McCormick, while Eileen Murray will continue in the co-CEO role she assumed six years ago.

They could get some help from artificial intelligence: Dalio is reportedly developing software that will automate day-to-day management of the firm, hoping to ensure it will continue to thrive when he’s gone.

And he’s not disappearing entirely just yet. On Wednesday, Dalio announced he will assume the role of co-CIO, joining Jensen and another co-CIO, Bob Prince, at the investment management level. Senior management is also overseen by a team of co-chairmen.

“Consistent with this idea-meritocratic way of operating, Bridgewater is run by a number of capable partners who can assess things independently and work together to come to the best decisions,” Dalio said. “We are very fortunate to have such a broad and deep team, especially at this time of transition.”

Dalio’s eccentric management style has given the company one of the highest staff turnover rates on Wall Street. The billionaire reportedly instructs new employees to read his “Principles” manifesto that contains more than 200 pieces of advice by which he runs the company. They include “write down your weaknesses and the weaknesses of others to help remember and acknowledge them”, “don’t tolerate dishonesty” and “be radically transparent”.

In honor of these principles, meetings where staff are encouraged to criticize each other are taped and stored.

“Doing this isn’t always easy, especially at first, but dealing with these mistakes, problems and weaknesses is what fuels our improvements,” Dalio said. “Some people love this forthright way of operating and wouldn’t want to work anywhere else, while others dislike it and leave.”

Dalio, who is 67, commenced a 10-year succession process in 2010. It will be fascinating to see if his management structure lives on when he departs.


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