Founder of the world's largest hedge fund, Ray Dalio, is going to hand over management to AI

Bridgewater Associates is the largest hedge fund in the world that serves many institutional clients: retirement and charitable foundations, non-profit organizations, governments, and central banks. Now the hedge fund manages assets of more than 150 billion dollars. To achieve such impressive results, company founder Ray Dalio (Ray Dalio) put a lot of effort, including to create a unique corporate culture.

The founder of Bridgewater is primarily famous for its extraordinary approach to management, and the idea of ​​shifting the solution of managerial tasks to artificial intelligence is quite consistent with its principles.
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In 2015, the company assembled a team of software engineers specializing in analysis and artificial intelligence. Led the new division of The Systemized Intelligence Lab David Ferrucci, who previously led the development of the IBM Watson supercomputer. At Bridgewater Associates, he is working on a secret project that Dalio calls the "Book of the Future." The head of the company wants his offspring to continue to develop along the path that he had planned for her, even in his absence. The world's largest hedge fund creates a piece of software to automate daily management decisions, including hiring, firing, and other tasks.

The new technology should consolidate the features of hedge fund management in the software system. Dalio could give out his instructions using the GPS system with the accuracy of the coordinates of the employees and observe how they spend their day talking about whether to make a specific phone call.

Bridgewater already uses data-driven software. Employees evaluate each other throughout the day using a rating system called Dots. Systematized Intelligence Lab has a built-in tool that includes these ratings in the format of "baseball cards", which demonstrate the strengths and weaknesses of the company's employees. Another application, called Contract, receives data about the goals that employees want to achieve, and then tracks how well they cope with achieving these goals.

All of these applications are part of PriOS 'leading software. Dalio plans to shift three quarters of management decisions to this platform over five years. PriOS will be responsible for selecting suitable employees for specific vacancies and ranking opposing points of view of multiple team members when they cannot agree on which strategy to follow in the future. The machine will make decisions in accordance with a set of principles about the company's vision set forth by Dalio.

The system is currently under development, and the exact details of its work are still being discussed within the company. Employees familiar with the project describe it as “an attempt to make Ray's brain out of a computer”.

Ray Dalio returned to the management of Bridgewater at the beginning of this year after leaving the post of manager 6 years ago. During this time, in his opinion, the company became less efficient, and he decided to carry out a series of transformations, during which the weakest employees would be dismissed. Since Dalio’s return, 10% of the company's employees have been cut. Often the employees leave themselves - they do not withstand the pressure. According to the company, about 1/5 of all newcomers leave Bridgewater during the first year of operation.

The current staffing program includes the rules set forth in the 123 pages of a manifesto known as The Principles. Each team member must know all the rules and actively apply them in their work. “People work like machines” - this idea appears 84 times in the text of the manifesto. However, the main problem, according to Ray Dalio, is that people cannot achieve maximum productivity due to the interference of emotions. This problem can be solved only with the help of systematic practice. The same can be said about management. “Successful managers develop a“ mechanism ”made up of the right people who do the right things to get what they want,” he writes in The Principles.

Automating the decision-making process is attractive for business, as it will save time and eliminate the emotional instability of a person. But will people be happy to take orders from a robotic manager?

Here the opinions of most experts diverge. Some believe that people usually do not perceive the message that comes from the car. In companies that are really good at data analytics, very often the solution develops a statistical algorithm, but the responsibility for its adoption still lies with the person. Machines do a good job, but you need someone who can put this decision in an emotional context. In another camp, they believe that humankind has long been following the will of the machines: we “outsourced” the development of the route to GPS navigators and trust the autopilot in controlling the aircraft.

There is also a compromise position: artificial intelligence copes better with administrative tasks such as creating an income statement and scheduling resources, while people excel in writing public speaking and communications for clients, motivating employees and developing strategies. However, this is only an assumption. We can not judge the possibilities of AI in solving strategic and creative tasks until we give it the opportunity to express themselves.