Bridgewater’s Bosses Are Fighting Over Something
The way power struggles at investing firms usually work is, there’s some non-transparent process by which someone wins and someone loses, and then the loser is either kicked out or subjected to some sort of symbolic loss of status. The symbolic loss of status that I often think about is this one, from a power struggle at Pimco:
After the forum, Gross devised a seating plan for a meeting of portfolio managers, relegating Balls, Ivascyn and Mather to the rows of the conference room instead of at the main table. The arrangement was perceived as a snub, according to a person familiar with the matter.
.. Balls, Ivascyn and Mather got their revenge, and Gross was gone a few weeks later. But imagine contesting power at a trillion-dollar investing firm that way, with seating arrangements. Actually, I bet you can imagine it pretty easily. “Next to comp, seating is the most important issue on the Street.” Human beings care deeply about their status, and there are lots of indicators of status — like seating arrangements — that are both instantly legible to humans and weirdly difficult to parse logically.
.. “About 25% of new hires leave Bridgewater within the first 18 months.” A “core tenet” of the firm is “Pain + Reflection = Progress,” and I gather that a lot of pain goes into the progress.
.. If your returns are just so-so, what justification remains for running your hedge fund like an intense New Age meditation retreat?
.. “Many of the alleged discriminatory acts involve such minutiae as…Pao’s office not being in ‘the power corridor’ (whatever that means).” Sounds silly, right? But based on managing partner Ted Schlein’s testimony, it seems seating arrangements at Kleiner do say a lot about status: Asked why he didn’t sit in the back of a conference room to make space at the front table for Pao and other junior partners, he responded, “That’s not how the meetings work.”
.. Not sitting at the main table is as often a power move as it is a snub, really.