12. Be radically honest and transparent

12. Be Radically Honest and Transparent

"One sincere and honest move will cover over dozens of dishonest ones. Open-hearted gestures of honesty and generosity bring down the guard of even the most suspicious people. Once your selective honesty opens a hole in their armor, you can deceive and manipulate them at will. A timely gift—a Trojan horse—will serve the same purpose." — The 48 Laws of Power (2 Areas/3 Notes/3 Sciences/0 Mathematics/AM3D Axioms, postulates/48 Laws of Power/12. Use selective honesty and generosity to disarm your victim)

In the upside-down world of the 48 Laws of Power, even honesty becomes a tool of the dishonest—just another weapon to deceive the insufficiently cynical. To prove his point, Greene shares how Count Victor Lustig conned Al Capone. One day, Lustig approached Capone with a dubious money-making proposal. Give him two months, Lustig promised, and he would double Capone's $50,000 investment. Smooth talker as he was, Lustig secured the money and promptly locked it in a safety box where it remained untouched for the full two months.

Lustig returned to Capone appearing contrite and humbled. The plan had failed, he admitted. But before Capone had time to flay Lustig alive (or to inflict whatever method he preferred for slow, torturous death), the con artist pulled out the original $50,000 and returned it penny for penny. Capone was shocked. Honest men did not cross his threshold often.

Lustig had correctly calculated that Capone would soften at a display of honesty. After returning the money, Lustig secured a smaller gift of $5,000—the true aim of his con all along.

It's a pretty story and apt anecdote. The only problem¹ in viewing it as lesson material is that it assumes you want to spend time in the company of ruthless criminals. If you want to have a constructive impact on society, there are easier paths.

Creative power requires a different kind of honesty—not selective and Trojan but radical and unrelenting.

"I'm talking about a specific extra type of integrity that is not lying, but bending over backwards to show how you're maybe wrong, that you ought to have when acting as a scientist. And this is our responsibility as scientists, certainly to other scientists, and I think to laymen" — Richard Feynman

I'm talking about Feynman's kind of honesty—the radical honesty underpinning the scientific project that led us out of the dark ages. Whether you are a pollyannaish progress worshipper or climate-fearing progress denier, we need the very same honesty to wage an effective climate dialogue—all that stands between us and a prompt return to the dark ages.

But there's no reason to restrict this boon to only scientists. More generally, radical honesty is our responsibility as citizens, colleagues, and children, as partners, parents, and people of the Earth. It builds more resilient, trusting, and happier companies and communities.

Observance of the Law #1

Perhaps the best example of this principle in practice is Bridgewater, one of the world's most successful investment management firm. When asked, founder Ray Dalio often cites "radical transparency" as the most important factor in his company's culture.

As Dalio writes in his Principles:

"Provide people with as much exposure as possible to what’s going on around them. Allowing people direct access lets them form their own views and greatly enhances accuracy and the pursuit of truth. Winston Churchill said, “There is no worse course in leadership than to hold out false hopes soon to be swept away.” The candid question-and-answer process allows people to probe your thinking. You can then modify your thinking to get at the best possible answer, reinforcing your confidence that you’re on the best possible path."

Radical transparency is not easy. Newcomers typically need 18 months to adjust to the new expectations, and many never complete the transition—turnover at Bridgewater is survivorship bias, which is almost double the average. But those that remain, Dalio might say, are stronger for it. They have survived the hazing and excised their deceitful tendencies to become more productive coworkers and business people.

Interpretation # 1

The main purpose of radical transparency at Bridgewater is to foster clearer communication. In our information age, conflict stems less frequently from resource scarcity—the usual cause in premodern societies—than from simple misunderstanding.

Large corporations like Bridgewater are liable to fracture into bureaucratically isolated strata. As a result, information ends up taking painfully convoluted paths to get from A and B. It's a game of telephone sure to corrupt the original message.

Which is why Elon Musk advocates against overly hierarchical company structures:

"A major source of issues is poor communication between depts. The way to solve this is allow free flow of information between all levels. If, in order to get something done between depts, an individual contributor has to talk to their manager, who talks to a director, who talks to a VP, who talks to another VP, who talks to a director, who talks to a manager, who talks to someone doing the actual work, then super dumb things will happen. It must be ok for people to talk directly and just make the right thing happen."

It's a straightforward consequence of the Information Inequality:

$I(X)\geq I(f(X)).$

The information, $I$ , contained in a signal, $X$ , is always less than or equal to the information contained in any function/modification of that signal, $f(x)$ . By reducing the number of interlocutors, $f_i$ , we can more tightly hug the upper bound:

$I(X) \geq I(f_1(X)) \geq I(f_2(f_1(X)))) \geq I(f_3(f_2(f_1(X)))))\geq \dots.$

A different approach is to make the modification functions $f_i$ less lossy. Every additional filter we impose on the signal—our sense of what is decent, what will offend people, what is or is not relevant, etc.—makes us a worse conveyor of information. The solution, then, is to strip out as many filters as possible to make $f_i$ more conservative: i.e., to adopt radical transparency.²

“By lying, we deny others a view of the world as it is. Our dishonesty not only influences the choices they make, it often determines the choices they can make—and in ways we cannot always predict. Every lie is a direct assault upon the autonomy of those we lie to.” — Sam Harris

Observance #2

Another company celebrated for its culture of radical transparency is Netflix. Here's a 25% over the first 18 months:

“In most situations, both social and work, those who consistently say what they really think about people are quickly isolated and banished. We work hard to get people to give each other professional, constructive feedback—up, down and across the organization—on a continual basis. Leaders demonstrate that we are all fallible and open to feedback. People frequently ask others, ‘What could I be doing better?’ and themselves, ‘What feedback have I not yet shared?’”

Yet more concisely, co-CEO Reed Hastings wrote in a memo:

”You only say things about fellow employees you say to their face.”

This is also the company famous for its "Keeper Test"—managers regularly ask themselves which of their employees they would fight to keep if those employees were preparing to leave for another company. Anyone who doesn't make the cut is promptly fired with a considerable severance package. Better to buy off detractors and free room for star players than slowly decline into the sunk-cost fallacy swamp. "Adequate performance gets a generous severance package".

Despite the continual risk of being fired and at-times brutal peer reviews (or, who knows, maybe because of), Netflix is consistently ranked as one of the tech world's favorite places to work—among the release from the company. Maybe radical transparency works.

Interpretation #2

For Netflix, radical "candor" is less about clarity in communication than making room for personal growth and trust. Most of us tend towards stagnation because we surround ourselves with people unwilling to critique us. Perhaps it comes from a good place: our friends don't want to hurt us. Perhaps it comes from a more nefarious place: we self-select an entourage of yes-men to feel better about ourselves. Whatever the cause, the end result is complacency at best and spiritual death at worst. Honest third-party feedback is the fuel of personal development.

If for no other reason, we should strive towards radical honesty because honest people are more pleasant to be around. On the long run, one sincere and consistently honest person will outweight a dozen potentially hurtful feedbacks.

“Honest people are a refuge: You know they mean what they say; you know they will not say one thing to your face and another behind your back; you know they will tell you when they think you have failed—and for this reason their praise cannot be mistaken for mere flattery.” — Sam Harris

Reversal

With both Bridgewater and Netflix, the work culture probably isn't all that the press mythologizes it to be.

Bridgewater's radical transparency has a number of rather creepy corollaries. For one, almost every encounter is recorded on video, so it can potentially serve as training material in the future. This leads to a near-Orwellian surveillance state with "Truespeak" substituted for Orwell's original "Newspeak"—Big Brother butts in only when its subjects become too conventional and self-moderating.

The problem with this particular incarnation of radical transparency is that trust needs autonomy to flourish (top 10 or 20 American companies on GlassDoor). Constant surveillance breeds suspicion.

In addition, Dalio's adherence to his principles trust to be trusted:

Each day, employees are tested and graded on their knowledge of the Principles. They walk around with iPads loaded with the rules and an interactive rating system called “dots” to evaluate peers and supervisors. The ratings feed into each employee’s permanent record, called the “baseball card.”

Two dozen Principles “captains” are responsible for enforcing the rules. Another group, “overseers,” some of whom report to Mr. Dalio, monitor department heads.

Maybe this really is something you can get used to after 18 months of living it. But I'm inclined to think that this period serves more to select for those people already distrusting enough that they can tolerate a work culture so clearly inspired by the Stasi.

Another risk is that Bridgewater's notorious public condemnations are almost universally less effective than private feedback. As radically transparent as you think your culture is, human nature is more receptive to feedback when it is delivered in a small, private setting than when you are surrounded by a tribe of coworkers.

Netflix's variety of radical candor has can get near cultish. In particular, the willingness to fire has leld to a pervasive fear of dismissal. After asking a group of people how many of them feared being fired, Karen Barragan doubled down with the declaration that it was "[g]ood, because fear drives you.”

Within limits, Ms. Barragan, within limits. It definitely isn't good when it leads to a situation like the following:

One former employee remembers seeing a woman who was just fired crying, packing up her boxes, while the rest of her team shied away from the scene without offering any support. They feared that “helping her would put a target on their back,” the employee said. “I just couldn’t believe it.”

Radical candor should not have to mean emotional blunting, but it requires active work to keep the two apart. Every strategy has its pitfalls.

Like any, radical honesty is no perfect decision. There will always be cases where omitting information is the best course of action—or even actively lying (if the Nazis are at the door asking for the location of the family you are hiding). That said, in general, not lying comes pretty close to perfect.

“Lying is, almost by definition, a refusal to cooperate with others. It condenses a lack of trust and trustworthiness into a single act. It is both a failure of understanding and an unwillingness to be understood. To lie is to recoil from relationship.” — Sam Harris

Footnotes

There are actually other problems. Many of them. Like, if Lustig had calculated incorrectly, he would be dead, and we likely would not have heard it. Always factor in the its own downsides. ↩
Ok this needs a bit more rigor since human beings are not quite well-behaved functions $f(x)$ (we can spit out different results for the same answers and might introduce information of our own). Really, this should be expressed in terms of mutual information: $H(X) = I(X; X) \geq I(X; f(x))$ — the entropy (average information) contained in $X$ (equal to the average amount of information about $X$ contained in $X$ ) is always less than the average information about $X$ contained in a function of $X$ . ↩