Decision principleFrameworkDecision-makingLeadership
Weight an opinion by the record of the person holding it
The idea
Dalio's Principles sets out one firm's operating system at considerable length, and the part worth keeping is believability weighting. In a disagreement, the views are not counted equally; each is weighted by how often the person holding it has been right about this kind of question before. It is a rule for deciding rather than a rule for being polite, and it cuts both ways: a senior person with a poor record on the question at hand gets less weight, and a junior with a good one gets more. The Library suggests taking the decision-making sections and being sceptical of the rest.
In a disagreement, weight each view by that person's track record on the question, not by their rank or confidence.
When it works
Investment committees, group cases, and any time you are deciding whose forecast to trust.
When it may fail
Records are short and noisy, and the method can entrench whoever was lucky early. It also depends on a culture that records who was right, which most firms do not have.
How to use it
In a group case, when two views conflict, ask what evidence each person has for being good at this kind of judgement, and say which you are weighting and why. Organising the disagreement scores better than winning it.
Where it came from
Book Principles · Ray Dalio
What the source says. One firm's operating system at length; take the sections on decision making and believability weighting and be sceptical of the rest.
Competing perspectives
Argues against
One person's record is a story about survivorship until proven otherwiseAsk how many people ran the same method and are not in the sample before treating a record as evidence of skill.
Connected ideas
Says something similar
A good decision and a good outcome are separate thingsJudge a decision by what was knowable when it was made, and keep the outcome in a separate column.
Concepts
Put it to work on L3VLUP
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