It’s the late 70s, and Ray is a 34-year-old entrepreneur and investor. He is fired up and about to make the boldest bet of his life: he had calculated that the American banks had lent too much money to poor countries and these nations were not going to be able to pay back their debts. He therefore believed the world would have the biggest economic crisis since the Great Depression and with it a big crash in stock values. It was a crazy and controversial point of view at the time.
A few years later, the indebted countries were indeed unable to pay back their debts and went bankrupt. The greatest crisis since the Great Depression followed. Ray predicted it all and was asked to testify in Congress and appear on “Wall Street Week,” the show of the time. In the Congress testimony, he offered his thoughts on the financial markets: “The economy is now flat — teetering on the brink of failure.” He was also quoted in an article declaring, “I can say this with absolute certainty because I know how markets work.” Ray was bold and filled with conviction and openly so.
He was also very wrong. While the debt crisis happened, contrary to Ray’s prediction the stock market and the economy went up rather than down. He lost so much of his own and his clients’ money he had to shut down his business and let all his employees go. He even had to borrow 4,000 dollars from his dad to pay for his family’s bills.
After this extremely painful experience, Ray knew he needed to better examine his strengths and weaknesses. He crashed hard but he was now ready to embrace reality and learn from it. What he discovered from his self-assessment was rather surprising. By looking at the causes and consequences of his actions, Ray understood that his personality traits were strongly influencing his decisions and actions. His boldness, extreme risk-taking, and ambition had a big impact on his failure. They were his dark side.
But Ray intuitively knew that the same traits were part of his inner code for achieving his goals. The real problem, reflected Ray, was that these strong traits had been running wild and he had taken them to an extreme. They were not well-balanced and intentionally calibrated. He was too bold and not humble enough. He took too much risk without properly stress-testing his thinking. Ray knew that in order to be successful he didn’t need to push away his dark side but instead take full advantage of it through a balancing act.
Ray found tremendous value in exploring his dark side. He gained insights that set the foundations for a profoundly new way of thinking about hard decisions, the economy and achieving success. He is today known as Ray Dalio, the founder of Bridgewater Associates, the largest hedge fund in the world, and the bestselling author of Principles: Life and Work, a book that has created a movement and is recommended by some of the greatest thinkers of our times.
Know your dark side
Almost two decades ago, psychologists identified a dark triad of traits—namely, narcissism, Machiavellianism and psychopathy—that influence a myriad of life outcomes from health and relationships to career choice and wealth.
Narcissism, probably the mildest trait of the dark triad, comes in two flavors: grandiosity and vulnerability. Grandiosely narcissistic people are characterized by a lack of humility/modesty and dominance. Vulnerably narcissistic individuals are characterized by an overall negative mood, distrust, selfishness, and a need for attention and recognition.
Machiavellian individuals are thought to be strategic and skilled manipulators and callous pragmatists who strive for success while being able to demonstrate high self-control.
Psychopathy is perhaps the most dangerous of the dark triad. It has three distinct elements: dominance, impulsivity, and meanness. When not managed well, these tendencies are toxic to relationships and destructive for careers.
More recently, strong evidence shows that the dark triad is more likely a dark duo with psychopathy and Machiavellianism highly overlapping, and narcissism being a distinctive trait.
The dark triad traits are not the only aspects of personality that can disrupt our personal and professional lives. In the world of work, psychologists studying leaders and followers have identified a total of 11 dark traits that resemble clinical personality disorders, especially when taken to an extreme. The dark traits range from excitable, defining a person who is rather moody and hard to please to dutiful, which is a characteristic of someone who is eager to please and avoids disagreement.
We intuitively know that humans can have a dark side. What is less obvious is that has our dark side can be both positive and negative. A bold person can be overconfident and arrogant at times but she or he will also often have the courage and conviction to move things forward and inspire others to action.
Ray ultimately reached peak performance and incredible success not by suppressing his dark side but by uncovering it in its entirety.
The downside of dark traits
Personality tests of dark traits carried out by the firm Hogan Assessments with millions of people suggest that each person has at least three of them. At the same time, 40% of people likely have high-risk dark traits, where their weaknesses result in counterproductive behaviors. This figure points to a dark reality: more than one-third of the working population is frequently engaging in toxic behavior at work.
It should come as no big surprise that popular CEOs are often “breaking bad”. The famous inventor and entrepreneur, Elon Musk, for example, is well known for his impulsive, almost psychopathic, behaviors: he smoked pot during a live podcast appearance and posted misleading financial information on Twitter, leading to a lawsuit, these being just a few samples of his recklessness. A recent analysis of the spread of psychopathy among CEOs shows that psychopathic traits are indeed associated with holding leadership and management positions, although the figure has been overblown by the media.
If we were to look for the negative outcomes of the dark traits, they are not hard to find. Psychopathic hedge fund managers make worse investors. Managers with psychopathic traits engage in more bullying and are themselves more depressed. Steve Jobs was known for his disruptive personality, frequently displaying insensitive and antisocial behavior, bullying and intimidating his employees.
Narcissistic leaders can be toxic as well, triggering negative emotions in their followers, hindering collaboration and even contributing to lower financial returns for their companies.
CEOs are not the only ones falling victim to their wild dark sides. World-class performers are susceptible to it as well. The Olympian Michael Phelps used to lose control of his dark side after every Olympic games he participated at, using drugs, driving drunk or having temper “explosions”. He almost took his own life because of it.
The weaknesses that stem from dark traits can be hidden and entangled with more positive tendencies, making them difficult to identify. Fortunately, a practical study conducted in Europe has uncovered 15 signs of “counterproductive” dark traits at work:
- Over-claiming, or falsely taking credit for, contributions to the organization.
- Aggressive self-promotion.
- Being highly defensive after negative feedback and criticizing the source of feedback.
- Treating valued members of the organization (trophy colleagues) differently than those who do not boost their egos.
- Demonstrating a selfish perspective with a “choose your battles” mind-set.
- Trying to control or minimize other people’s influence.
- Not sharing knowledge with colleagues.
- Using manipulation to reach goals.
- Scheming for personal benefit without considering consequences for others.
- Competing rather than cooperating.
- Making quick, short-term-focused decisions without considering consequences for others.
- Making bold, risky decisions without regard to organizational rules or ethics.
- Questioning authority figures, rules, and the status quo.
- Bullying or criticizing coworkers and focusing on personal feuds instead of the tasks at hand.
- Luring coworkers into wild behaviors or seducing coworkers or supervisors into romantic relationships.
There is no doubt dark traits can produce a lot of damage. But let’s not forget that they can have highly desirable aspects and outcomes as well.
The upside of dark traits
Mischievousness, especially when taken at psychopathy level, is probably the most dangerous of all the dark traits. Most, if not all, serial killers are psychopaths.
But the same killers share at least one psychopathic trait with people you would want on your side at all times: emergency professionals. That’s right, ambulance workers, firefighters have something in common with cold blood criminals: a low level of fear. Of course, how this fearlessness is put to use is another story. While firefighters and policemen use their fearlessness to save lives, criminals might use it to take them.
Fearlessness is also what makes people become entrepreneurs and innovators in the first place and change the world, sometimes for the better. And while the concern over the spread of psychopathy amongst CEOs has been exaggerated, psychopathic tendencies do contribute to their effectiveness as leaders to some degree (although only in the case of male CEOs).
Better executive performance is not the only positive outcome associated with dark traits. Narcissistic leaders tend to have higher salaries and more promotions. They are seen as charismatic, daring and proactive and they are preferred in uncertain conditions.
Because fearlessness and other “good” tendencies of dark traits are useful to society, a positive science of the dark side has started to emerge. For example, research from Maastricht University has uncovered an adaptive form of psychopathy that involves desirable traits such as stress immunity and remarkable social skills. The accompanying questionnaire is measuring nine traits that encompass adaptive psychopathy: Leadership, Logical Thinking, Composure, Creativity, Fearlessness, Money Smart, Focus, Extroversion, and Management. These “good” psychopathic traits contribute to healthy life outcomes, guarding against depression, anxiety, stress, and suicidal thoughts.
The positive manifestations of dark traits do not happen naturally. For a dark trait to become a dark strength, one has to engage in a deliberate process of development.
Master your dark side
Dark traits are hard to control. Moreover, our very own human nature is working against us by making bad behaviors feel more intense, forceful and stronger than the good ones. If there is something close to a law in psychology, it’s the “bad is stronger than good” principle.
Time is not on our side either: any personality change attempt after the age of thirty will be met with extreme difficulty and resistance.
Because our bad tendencies are so hard to change we must ignite an uncommon process of change that has a strong focus on dark strengths and workes around weaknesses not against them.
There are three steps in this process and you will need all three in order to make the most of your dark strengths.
1. Focus on a single dark trait
In order to effectively manage your dark side, you must concentrate all your energy on just a single trait.
When Ray (introduced at the beginning of the article) started his own development work, he didn’t divide his energy and attention by working on multiple weaknesses at the same time. He took them one by one, starting with his mischievousness (or audacity, in his terms). Ray focused on this risk-taking attitude because it was the trait that got him in big trouble most often.
To decide on which dark trait to work on first, do the following:
- think of some painful mistakes that you made over the years
- use the dark traits inventory from above to scan for the dark traits responsible for those mistakes
- choose a single dark trait that: a) was responsible for multiple mistakes over the years or b) has contributed to your biggest personal “crash” and c) still has relevance today.
By focusing on a single dark trait, your change effort will have a clear purpose and direction. Next, you will add a transformative force to your change project.
2. Double down on your dark strengths
In the cards game of blackjack, to double down means to double a bet after seeing one’s initial cards. In our case, your cards are your dark traits. In the first step, you saw your dark traits and you chose the right one. Now you must fully embrace the strengths of your dark trait and increase their force and magnitude.
For Ray, the strength of his audacity and propensity for risk was his logical thinking. He always considered himself a hyper-realist and thought that in order to become successful one needs to deal with reality first. Ray always had this strength but it was inhibited and overpowered by his appetite for risk.
To double down on your dark traits you need to forcefully empower those strengths that come like second nature to you. In the case of Ray, his dark strengths were always part of who he is but they were pushed aside by the more intense, reactive tendencies. Your goal is to bring them back to life and make them part of you are and how you act once again.
In the last step, you will have to deal with your dark weaknesses but you will have powerful allies.
3. Compensate for your weaknesses
When dealing with weaknesses, the common reaction is to fight them head-on, to “fix” them and ourselves. We work hard at not being so hot-headed and to be more controlled. We want to battle our perfectionism and over-controlling personality head to head. Most often we lose this battle. Angry people usually stay angry despite the best of their intentions and efforts. Dr. House adeptly observed, “People never change. They just become more of who they really are.”
We need a different kind of strategy to deal with weaknesses. Ray crashed hard from taking too much risk but he didn’t set to eliminate risk from his life in order to avoid failing again. That would have positioned him at another undesirable extreme — the indecisive, overly cautious one. Ray understood that he still needed to take risks in order to achieve his goals and become successful.
Instead of avoiding risk altogether, Ray put his efforts into devising the right context and tools that would calibrate his risk-taking attitude and guard him against repeating painful mistakes. He surrounded himself with smart people with whom he would have thoughtful disagreements to stress-test his opinions. He wrote down his life and management principles based on his experience, mistakes, and observations of what works that would help him and others make consistently better decisions.
We fail at change because when we fight our weaknesses head-on we meet with great resistance. Our weaknesses likely grew stronger and stronger over the years and became part of our mental ammo for getting what we want. Maybe during our childhood and youth, we had some successes and too much praise and they forged a narcissistic personality. We then used these narcissistic ways of thinking and action (e.g. overconfidence, entitlement) to go after more goals, in a vicious, self-perpetuating cycle.
To break this cycle we must avoid fighting our weaknesses in a direct match. A better strategy is bringing together virtuous compensators, powerful allies that will do the fight for us.
The dark skills of the future
Most of us have a dark side. We have disruptive traits that can derail us and put our life, relationships, and careers in jeopardy. But that’s not the whole story. Dark traits also entail strengths that can have tremendous value for ourselves and society.
Some argue that resilience, fearlessness, and creativity are the skills of the future. They also happen to be the dark strengths of “good psychopaths” such as Elon Musk and Ray Dalio and powerful catalysts for their incredible achievements.
Our future might be brighter if we all make the most of our dark side.