Principles by Ray Dalio is the best book on business culture ever written. It goes beyond business culture though and Principles is, for me, a must read for everyone interested in self improvement.
Warning: this is a thorough (long) post.
- Bullet Summary
- Full Summary
- Part I – Where I’m Coming From
- Part II – Life Principle
- Chapter 1. Embrace Reality and Deal With it
- Chapter 2. The 5-Step Process to Get What You Want
- Chapter 3. Be Radically Open Minded
- Chapter 4. Understand People Are Wired Differently
- Chapter 5. Learn How To Make Decisions Effectively
- Life Principles: Putting It All Together
- Part III – Work Principle
- TO GET THE CULTURE RIGHT …
- Chapter 1. Trust Radical Truth and Radical Transparency
- Chapter 2. Cultivate Meaningful Work and Relationships
- Chapter 3. Create a Culture Learning From Mistakes
- Chapter 4. Get and Stay in Sync
- Chapter 5. Believability Weigh Your Decision Making
- Chapter 6. Recognize How to Get Beyond Disagreement
- TO GET PEOPLE RIGHT…
- Chapter 7. Remember WHO is More Important than WHAT
- Chapter 8. Hire Right: Huge Penalties for Hiring Wrong
- Chapter 9. Constantly Train, Test, Evaluate and Sort People
- TO BUILD AND EVOLVE YOUR MACHINE…
- Chapter 10. Manage as Operating a Goal-Achieving Machine
- Chapter 11. Perceive and Don’t Tolerate Problems
- Chapter 12. Diagnose Problems to Get at Their Root Cause
- Chapter 13: Design Your Machine to Get Around Your Problems
- Chapter 14. Do What You Set Out to Do
- Chapter 15. Use Tools and Protocols
- Chapter 16. Don’t Overlook Governance
- Work Principles: Putting It All Together
- Real Life Applications
- What’s good for the whole is good. The whole takes precedence over the one
- Perfect meritocracy is the best system for decision making. It requires:
- Radical open-mindedness (know and accept reality and your limits)
- Radical transparency (be frank and open about your and other people’s assessments)
- If you have a criticism, you have to say it (or else the environment becomes toxic)
- Hire people with a thirst for making sense of the world
- Pain + Reflection = Progress
Ray Dalio says the first principles serve to find your own principles. This what you should do:
- Think for yourself to first decide what you want
- Find out what’s true
- What should you do to achieve what you want in light of what’s true
You choose your principles and you can even accept someone else’s principles if they help you attaining your goals. But your principles must be authentic, meaning they should reflect your real character and values. And then you should live by them and walk the talk.
Ray Dalio says that the success he had is because of the principles he followed, and not because of anything unique about him. So anyone else following these principles can achieve the same level of success.
There are three level principles:
Higher level principles are chapters; mid-level principles are designated by numbers and sub-level principles are designated by letters.
Please note I will not always write all sub-level principles.
However, for a complete understanding of Principles, I invite you to get the book.
Part I – Where I’m Coming From
My Note: I will be brief here because I’m not too interested in biographies.
Here’s a few points. Ray Dalio:
- Fears mediocrity and boredom more than failure. Terrible is better than mediocre
- A “can’t lose bet” he lost showed him it’s always best to assume you’re missing something
- Meaningful work and meaningful relationships are better than money
- Doesn’t want paycheck collectors but people who wanted to make sense of things -as he wants-
- Bad times with good reflections provide the best lessons -and who are the real friend-
- Greatest success is having others do well without you
- There far fewer types of people than people & far fewer types of situations than situations..
- .. Hence matching people and situations is key
- Happiness comes from struggling well
The key question is “how do I know I’m right”. The best way to answer is with other independent thinkers while engaging in thoughtful disagreement.
Dalio realized the only way he could succeed was to:
- Seek out the smartest people who disagree with him so he could understand their reasoning
- Know when not to have an opinion
- Develop tests and systematize time-universal principles
- Balance risks in a way that keep big upsides while capping downsides
Part II – Life Principle
Chapter 1. Embrace Reality and Deal With it
Ray Dalio looks at problems as games and puzzles he has to solve. Any time he solves a problem he gets a token in the form of a principle which allows him to avoid the same problem in the future. The more token he collects, the better decisions he makes and the more he advances in the game (read The Obstacle is The Way for more problem solving mindsets).
1.1: Be an Hyper Realist
Ray Dalio says he has become such a realist that he loves reality even when it’s harsh. On the other hand he came to despise all impractical idealism.
Dream + Reality + Determination = Successful Life
People who drive progress understand the cause-effect relationship that governs reality and idealists who are not grounded in reality cause problems instead.
1.2: Proof is The Foundation of Good Outcomes
The author says that proof or an accurate understanding of reality constitutes the bedrock of any achievement. Most people don’t go for that though and fight instead reality when reality is not what they want to hear.
1.3: Be Radically Open Minded and Radically Transparent
We aren’t born knowing what’s true, we have to find out, says Ray Dalio. And the best way to do that is with radical open mindedness and radical transparency.
We learn with feedback loop from our actions and beliefs, and radical open mindedness improves those feedback loops.
Radical transparency means facing the truth and speaking that truth freely. It can be difficult because it opens us up to criticism, but fearing criticism is tragic, says Dalio, because you won’t learn. The more you do it, the comfortable it will be.
Last but not least, radical truth and radical transparency allow for meaningful work and meaningful relationships.
1.4: Look To Nature to Learn How Reality Works
Ray Dalio says natures sets all the laws of reality. It’s clear Dalio has been shaped by evolutionary theories deeply because he says that evolution is the greatest force of reality (check The Selfish Gene for more on evolution and The Moral Animal for an overview on how evolution shaped us).
Most people, says the author, judge bad and good based on how it affects them. But nature optimized for the whole, not for the single (similar to what Nassim Taleb says in Antifragile).
Other big insights in this principle:
- Don’t get hang up on how things should be because you miss on how they really are
- For something to be good, it must obey laws of reality and contribute to evolution as a whole
1.5: Evolving is life’s greatest accomplishment and reward
Getting better and evolving is simply instinctive and that’s why we have an innate pull to it. Radical open mindedness will allow you to adapt to reality via trial and error.
And since nature and reality optimizes for the whole and not for the individual (ie. not for you), contribute for the whole and you will probably be rewarded.
Ray Dalio philosophizes here when he says we are unbelievably tiny and whatever we accomplish means nothing when seen from the universe. And still we want to matter and and we want to matter for the people around us. Which point of view you choose and who you choose to matter to and care for (family, country, world.. ?) is your choice and will determine who you will be.
Mark Manson says we can see death as a reason not do anything or say there’s no reason NOT to do anything (check The Art of Not Giving a Fu*k) and check my articles on how to leverage our insignificance and mortality
1.6: Understand Nature’s Practical Lessons
It’s evolution and progress itself that make us happy and fulfilled rather than achieving the goal or the material wealth. But to evolve remember that “no pain, no gain”.
1.7: Pain + Reflection = Progress
Ray Dalio says there is no avoiding pain, especially when you’re after ambitious goals. Instead of trying to avoid it you should develop a reflect reaction, which will make you develop much quicker. Reflection before the pain and during is best, but also afterward is helpful (plan around inflection points, says The Power of Habit).
In any case, you gotta run through pain or it means you’re not living to your full potential.
My Note: To read more on a positive spirit of learning, Sometimes You Win Sometimes You Learn is a great book.
- Embrace Tough Love
What Rai Dalio wants to give people around them is not what they want, which ultimately makes them weaker, but the strength to deal with reality to get what they want by themselves, which ultimately makes them strong and independent.
1.8: Weigh Second and Third Order Consequences
Ray Dalio says that people who stop at the first high level consequences get duped by nature and rarely achieve their goals. Translated into normal parlance, this is a bit of a more obvious point, and it says that exercising and eating sugar for example have great first order consequences, but bad second and third consequences.
1. This reminded me of Emotional Intelligence and the importance of having the strength of controlling one’s most basic drives.
2. Similarly Brian Tracey says that hard habits are hard to form but easy to live with, while easy habits are easy to form but hard to live with.
1.9: Own Your Outcomes
The author talks here about internal and external locus of control. Internal locus of control people think that they are in charge of their life and they are happier and outperform those who think that life is a crap shoot game they have no control on.
My Note: check Extreme Ownership
1.10: Look At The Machine From a Higher Level
Ray Dalio says it’s helpful to look at yourself and the people around from the above and as if you were a machine. It will help you to be more objective about where you stand and what you need to do. Looking from above you’ll be the designer and manager of your life looking at your worker self.
When you see a weakness from the above, you have four choices: deny them (unacceptable), accept them and work to address them (great), find ways around them (easy win), change what you’re going after (great if you’re not suited or don’t enjoy your current path).
Chapter 2. The 5-Step Process to Get What You Want
- Have Clear Goals
- Identify and don’t tolerate the problems standing between you and your goals
- Diagnose problems to get to the root causes
- Design plans to get around those problems
- Do what’s necessary to push those designs to completion
2.1 Have Clear Goals
- Prioritize because you can’t have everything.
- Don’t confuse goals with desires, but try to reconcile them to “follow your passions”.
- Don’t mistake the trappings of success for success (= don’t go after the bling)
- Don’t rule out goals because they seem attainable: great expectations create great capabilities
- Flexibility (accept what reality and mentors teach you) and self accountability (holding yourself responsible) will get you there
2.2: Identify and Don’t Tolerate Problems
Ray Dalio says most people are loath of bringing problems to the fore because it exposes their weaknesses, but successful people know that they have to.
2.3: Diagnose Problems to Get to the Root Cause
Ray Dalio says you should focus on the what root cause of the problem really is before moving into solutions. Fixing the root causes is important because the manifestations of that problems, which can be many and varied, will keep popping up.
2.4: Design a Plan
Design precedes doing.
2.5: Push Through Completion
Great designers who don’t execute their plans go nowhere. Keep in mind your WHY when you’re struggling, why you want to do what you’re doing and it will help you stay focused and on track (to read more on the important of your WHY, read Start with Why by Simon Sinek).
- Good work habits are underrated
2.6: Weaknesses Don’t Matter If You Find Solutions
The author says everyone has at least one big thing standing on the way to success. When you find it go to the root cause, address it and fix it. All the rest will come much easier.
If you can’t overcome your biggest roadblocks, have the humility to understand and ask for other people’s help and support.
2.7: Understand Your and Other People’s Mental Maps and Humilities
Mental maps means understanding yourself well, and humility means the open mindedness to find beyond yourself what are the best things to do.
Chapter 3. Be Radically Open Minded
Ray Dalio says this is one of the most important chapters in the book because it addresses the two biggest weakness almost everyone has:
- Your ego
- Your blind spots
3.1: Recognize Your Two Barriers
Our ego protecting mechanisms make it hard for you to recognize and accept your mistakes and weaknesses.
Dalio talks about the high level (conscious) and low level you (unconscious and emotional).The high level is often fighting with the low level amygdala.
For example when someone disagrees and asks you to explain your point of view the low level you is getting angry and defensive even if the higher level you knows it’s better to understand each other and come to a better solution.
But to be effective your need to find out what’s true must be more important than your need to be right.
We all have a preferred way of seeing the world which determines what we pick up on and what we miss. For example we can big picture or detail type of people, or linear or lateral thinkers.
Most people never realize their mental blind spots. And their ego makes it harder for them to understand when someone shows it. But realizing your mental blind spots is paramount to succeed at any kind of complex project (once you know fix them or get people who are strong where you’re weak).
My Note: to read more on the brain’s limitation read Incognito by David Eagleman.
3.2: Practice Radical Open Mindedness
Ray Dalio says that radical open mindedness is how you fix ego barrier and blind spots. To be radically open minded you must:
- sincerely believe you might not know the best path
- recognize your ability to dealing with not knowing is more important than what you know
Dealing with not knowing means you ask equally knowledgeable and smart people. And don’t worry if what they think is different and don’t worry about looking smart and being right, worry about achieving your goal.
3.3: Appreciate The Art of Thoughtful Disagreement
Your goal is not to convince anyone that you’re right, but to find out which view is true and how to act on it. All people in a thoughtful are worried about missing some key information and talk with each other to put all the pieces and perspective together.
3.4: Triangulate Your View With Believable People Willing to Disagree
Ray Dalio proposes to individually talk to experts and encourage them to disagree with each other. He basically creates a thoughtful disagreeing group that raises the chances of being right.
3.5: Recognize The Signs of Close and Open Mindedness
Close minded people:
- don’t want their ideas challenged
- frustrated the other person disagrees
- feel bad in getting things wrong are interested in being right.
- make statements instead of questions
- focus on being understood more than understanding
- say “I could be wrong but..”, which is a semblance of open mindedness while being defensive
- have problems holding two conflicting thoughts
- lack humility
Open minded people:
- not angry when someone disagrees
- are conscious there’s always the possibility they are wrong
- ask genuine questions
- feel compelled to see things from other’s people’s eyes
- listen attentively
- can go back and forth conflicting thoughts
3.6: Understand How You Can Become Radically Open Minded
Consider that it will take time to become truly open minded because it’s a question of habit -18 months on average, Ray Dalio says-. But you can become it and then anything else will become intolerable. To practice open mindedness:
- Use pain as a guide to reflection
Anger, irritability and tensions are all signs that your low road is taking over. Don’t worry, it won’t last long. Resist it and use it as a queue to go the opposite direction instead.
- Make Open Minded an Habit
The more you practice, the more it becomes a habit and the more natural it will become. Read more on changing habits from Tony Robbins and how habits work on the brain in The Brain That Changes Itself.
- Know Your Blind Spots
Record all the times you’ve done bad decisions because it might be a trend. Ask others and you might be about to uncover a blind spot.
- Be Evidence-Based
Many people make choices based on what they like or on what their subconscious dictates. Use data and evidence instead.
- Help Those Around Be Open Minded
Be calm and reasonable to help others prevent the fight or flight response (which is actually freeze fight or flight, as per Joe Navarro).
Chapter 4. Understand People Are Wired Differently
Ray Dalio says that hiring book smart people who excelled in top schools, but as often as not that didn’t turn out well. He finally understood that the biggest differentiator was in personality.
4.1: Power Comes From Knowing How We’re Wired
Ray Dalio here passes the microphone to someone else -sorry don’t remember the name- who says that we are born with attributes that usually have both positives and negatives.
4.2: Meaningful Work and Relationships are Genetic Predisposition
We crave meaningful relationships (Brene Brown saying that “connection” is why we are here)
4.3: Understand Brain Battles and How To Control Them
Principles here goes deeper on the previous concept of high and low you. The conscious mind is in a battle with the unconscious mind, and the biggest battle is between feelings -unconsciously governed by the amygdala- and thinking -prefrontal cortex operating consciously-.
The people who guide their own personal evolution and achieve their goals reflect on their own amygdala hijacking and form good habits. Good habits take on average around 18 months and if you keep up it will stick for ever.
You don’t want to fight the lower level you though, but treat it with kindness and respect, as if you’d teach a child.
4.4: Find Out How You And Others Are
The author says that self assessment of ourselves and others tend to be very inaccurate and psychometric assessments are better. At Bridgewater they map employees on their personality traits and he talks about a few personality traits, which are:
- Introverts /Extroverts: introverts focus on inner world and get energy from ideas and memories. Introverts prefer to share and communicate after they analyzed on their own, while extroverts can find it hard working out through ideas without someone
- Intuitive / Sensing: Intuitives focus on the context while sensing people focus on details
- Thinking / Feeling: some people make analysis based on logic and others on harmony among people
- Planning / Perceiving: some prefers plans, others prefer flexibility
- Tasks / Goals: goals-oriented are more visionary and task oriented are more reliable and better at managing processes that don’t change much
- WPI: Worplace Personality Inventory for example with low achievement orientation and high concern for others are unwilling to step on people’s toes to achieve their goals and bad at rule following might be a more independent thinker
- Creators / Definers / Advancers / Executers / Flexors.
Dalio says that some traits often combine together to create archetypes we are all familiar with. Albeit archetypes tend to be less useful and precise than the full assessments they can be useful when assembling teams: impractical artists, tidy perfectionist, crusher running through wall to get things done, visionary pulling ideas out of nowhere.
Dalio added a few archetypes, most important of whom is the shapers with which he identify himself. The shaper is very rage and goes from visualization to actualization, he can old different conflicting thoughts at the same time and he’s a a visionary + practical thinker + determined.
My Note: for more on personality types also check: Creating Lasting Change by Tony Robbins, where he focuses on the 6 human needs and Captivate by Vanessa van Edwards where she focuses on the OCEAN personality types.
4.5: Right People in The Right Role is Key to Success
Using the traits above, you want to have the people with the best fitting traits for each task, and form teams with complementary traits.
Chapter 5. Learn How To Make Decisions Effectively
Ray Dalio says he has spent his life trying to make decisions effectively. He has been looking for a way people can make decisions repeatedly with the same quality under the same circumstances, often using systems and computers.
5.1: Ban Harmful Emotions and Learn Before Deciding
Ray Dalio says that to make good decisions one must synthesize reality well and knowing how to navigate well.
5:2 Synthesize The Situation at Hand
Many things come at you and they all seem bigger during the present moment. That’s why it’s important to take a step back and realize what to pay and what not to pay attention to.
- One of the most important decisions you make is who you are asking questions to
- Everyone has an opinion, don’t mistake opinion for facts and don’t believe everything you hear
- New is overvalued, great is better than new
5.3: Synthesize The Situation Through Time
Don’t get duped by the fact that something is simply “improving”. Look how much it’s improving and where it’s starting from, or it might not be useful at all.
Everything important in your life needs to be above the bar and on a trajectory towards excellence.
- Remember the 80/20 rule and be an imperfectionist
5.4: Navigate Levels Effectively
Ray Dalio intends levels as the depth you are looking at any given topic. The example is that of a map, are you at street level or at country level?
You decisions should make sense at all levels.
5.5: Logic, Reasons and Common Sense Are Your Best Tool
Don’t use anything else or you will be prey of your low level you.
I loved the quote from Carl Jung:
Until you make your unconscious conscious, it will direct your life and you will call it fate.
5.6: Make Decisions as Expected Value Calculations
Be logic and see decisions as compared to their probability of being right and reward and probability of being wrong and losses.
Sometimes though it makes sense to take a chance if it costs you nothing even when the odds are fully against you if the rewards of a win would be big.
- Knowing when not to be is as important as knowing what bets are worth making
- Best choices have more pros than cons, not zero cons. Beware of people arguing against something just because they can find something wrong with it without considering the upsides
5.7: Prioritize Based on The Cost of Getting More Information
You need to decide if the cost of waiting to make a decision to collect more information is greater than the risks of making a decision right there and then.
- Don’t mistake possibilities for probabilities: everything is possible, the likelihood of it happening is what matters
Any damn fool can make it complex, it takes a genius to make it simple. You do it simple
5.9: Use Principles
Using well thought out principles is a great way to simplify and improve your decision making. All situations could look slightly different, but if you can look beyond the differences and identify “which one of those” it is, you will have systematized your decision making.
5:10: Believability-Weigh Your Decision Making
Triangulate your decision making with people with high believability scores.
The two mental blocks to overcome here is assessing who is more believable and not to rate your own believability too high.
5:11: Convert Your Principles in Algorithms and Recruit a Computer
Computers are an integral part of the process of systematizing and automatizing decision making.
5:12: Be Conscious of Trusting AI Without Understanding It
Computers have no common sense, so you must be aware of the pitfalls of automatized decision making.
Life Principles: Putting It All Together
To have the best life possible you have to know what the best decisions are and have the courage to make them. To acquire principles that work it’s essential that you embrace reality and deal with it as it is.
Part III – Work Principle
Ray Dalio says that because the power of a group is so much greater than that of the individual, the work principles might even more important than the life principles on which they are based.
For groups to function well the work principles have to be aligned with the members’ life principles. Not aligned on everything, but at least on the most important ones: the mission they’re on and how to deal with each other.
- A great organization has both great people and great culture -and it’s not easy getting them both right-
- Great people have both great character (radically truthful, radically transparent and committed to the mission) and great capabilities (skills)
- Great cultures bring problems and disagreements to the surface and solves them well
Work Relationships & Tough Love
Ray Dalio wanted the people working for him to be his partners more than his employees.
He says that treat partnerships come from sharing common values and interests, having a similar approach to pursuing them and having consideration for each other. At the same time, they must be willing to dish out tough love to push each other to greater levels. Too often people avoid facing the truth and put comfort ahead of success so they can stay safe in the social comfort zone.
Basically, the more care you give, the tougher you can be.
Ray Dalio says he wanted an environment where everyone has the right and responsibility to make sense of things for himself and fight openly for his point of view. Resolving those conflicts in a meritocratic system with a believability-weighed will outperform any other system.
A full meritocracy means: radical truth + radical transparency + believability-weighed decision making.
Ray Dalio says that while some called Bridgewater a cult, it’s the opposite and critical thinking is the main differentiator (Peter Thiel doesn’t go this deep in Zero To One when he suggests a start-up to be a cult).
Exceptions & Common Sense
It’s important to remember that all rules have exceptions and you should use your own judgement and common sense. Your Principles are like your GPS, if your GPS is telling you to turn right when there’s no road to the right, you can’t simply blindly follow it.
TO GET THE CULTURE RIGHT …
Chapter 1. Trust Radical Truth and Radical Transparency
It takes time to adapt to radical truth and radical transparency. But the critics saying it’s not natural have it wrong because after 18 months people adapt to it.
I particularly liked the author says it’s almost always best to shoot straight and be honest even when the news are not positive.
So when they were thinking about spinning off a division, most companies would have kept it secret to avoid employee dissatisfaction, but in the name of honesty and radical transparency, they made it public instead and kept great relationships even when the team eventually spun off.
1.1: Realize You Have Nothing to Fear Saying The Truth
The truth is your best friend to improve and the best way to dispense love and make others improve.
1.2: Have Integrity and Demand it From Others
- Never say something you wouldn’t say directly to them
Criticism is always welcome but never beyond someone’s back
- Don’t let loyalty to people stand in the way of truth and the well being of the organization
Personal loyalties and covering for someone’s mistake stands in the way of improvement and encourages deception. It’s an insidious form of corruption and undermines meritocracy.
Dalio says he believes in a healthier form of loyalty founded on exploring what’s true
1.3: The Right to Understand and the Obligation to Speak Up
In perfect meritocracy openness is not just a privilege but a responsibility and discuss about it until you are in sync or until you decided what should be done.
- Don’t be naive about lying: people who lied once are more likely to do so again, but at the same time be practical, everybody has lied at least once, treat cases as appropriate
1.4: Be Radically Transparent
At the beginning it will be difficult and it has drawbacks. Since everything is in plain sight it might appear that a radically transparent organization has more problems, and it might be more prone to scandals because nothing gets swept under the rag.
But Ray Dalio says wisely: the only opinion that counts are those of your employees and your customers.
So being transparent is the way to go, especially with what’s difficult to share and keep the exceptions rare. Exceptions of course are private information and “enemies” of the organization.
1.5: Meaningful Relationships & Work Are Mutually Reinforcing
… Especially when underpinned by radical truth and radical transparency
Chapter 2. Cultivate Meaningful Work and Relationships
Meaningful relationship means that people care about each other and can have great time together both inside and outside the organization.
Asked if the relationships in Bridgewater are more like a family or a team, Dalio answers that he wants the organization to be like a family business where members have to perform excellently or be cut. He would do the same with a family member because he believes that’s best for all.
He says he approached benefits for employees not in the impersonal transaction way most companies do, but like a family business. It doesn’t mean he would give and give, quite the opposite. He was very generous with something while expecting they take care of other things for themselves.
Dalio says the company behaved often like a family and many employees would do everything for the organization and they’d spend holidays often together.
It can happen that some employees don’t want to spend time with the organization outside of work and it’s totally OK to opt out, however the opt-out people are not the ones who provide the organization with the kind of commitment that is necessary for extraordinary performance over the long term.
2.1: Be Loyal To The Common Mission..
.. And not to anyone operating inconsistently with it.
2.2: Be Crystal Clear on What The Deal Is
You must be clear on what the rules and values are -what’s the qui pro quod, what’s generous, what’s fair.. And that people understand the difference between the two -.
I particularly like when Dalio says to make sure people give more consideration to others than they demand for themselves.
2.3: Size of The Organization can be a Threat to Meaningful Relationships
When you grow past a certain point people don’t know each other personally well anymore and sectarian tendencies might sprout. Ideal meritocracy demands you do not allow factions.
2.4: Many Feign Organization Interest While Maximizing For Their Own
Don’t be naive. Strive for the maximum amount people going for meaningful relationships while realizing there will be exceptions.
For example most people will try to maximize the money they can get while minimizing the amount of work they need to do. So be aware, for example, of lawyer’s advise as they want to bill more hours.
2.5: Treasure Honorable People..
.. Who are capable and they will treat you well even when you’re not looking.
Chapter 3. Create a Culture Learning From Mistakes
Ray Dalio says you must create a culture where making mistakes is OK but it’s not OK not learning from them.
Making a mistake is painful but you shouldn’t shield from that pain because it’s there to teach you a lesson. It’s not easy finding people with the correct mindsets towards mistakes, partially because schools stress the importance of having the right answers.
I particularly loved when Ray Dalio says:
If you cannot look back at yourself one year ago and don’t think how stupid you were, you haven’t learned much.
3.1: Mistakes Are a Natural Part of The Evolutionary Progress
Don’t feel bad about mistakes but love them because they’re your milestones in the evolutionary progress.
3.2: Don’t Worry About Looking Good: Worry About Achieving Your Goals
Get over blame and credit and worry about accurate and inaccurate.
3.3: Are Mistake Patterns the Products of Weaknesses?
Our weaknesses are often revealed in the pattern of mistakes we make. Observe and take note.
3.4: Remember to Reflect When Facing Pain
Stay in the pain and explore them so you can build the foundations for improvement. And do the same for others: teach and reinforce mistake-based learning.
Pain + Reflection = Progress
3.5: Know What Mistakes Are Acceptable and Unacceptable
Of course, in some areas and situations it’s not OK to make mistakes.
Chapter 4. Get and Stay in Sync
Ray Dalio says that since we’re all wired differently alignment among people cannot be taken for granted. Quarrels can happen because of misunderstandings and disagreements.
And to fix disagreements people must be open minded and assertive at the same time.
For open minded assertiveness in conversations check Difficult Conversations.
4.1: Conflicts Are Essential For Great Relationships
Because it helps people understand each other and clarify their disagreements.
4.2: Know How to Get In Sync And Disagree Well
It’s essential to know where the final decision making authority lies and it’s never acceptable to get angry because the meritocracy doesn’t produce the decision you wanted.
4.3: Be Open Minded and Assertive At The Same Time
Ray Dalio says most people have problems in being both assertive and open minded at the same time and that being assertive comes easier because it’s easier to see things the way the want to see them.
But getting in sync is a two way street with both responsibility: listening and speaking.
And don’t waste time with close minded people.
4.4: If It’s Your Meeting to Run Manage The Conversation
Make clear who is directing the meeting and who is there to serve. The person who has a goal for that meeting is responsible for it.
I also liked the warning on assertive fast talker: people who articulatively speak faster than people can process as a way of pushing their agenda. Don’t be scared of appearing stupid in saying you didn’t get it.
4.5: Great Collaboration Feels Like Playing Jazz
In great team the result is greater than the mere sum of its parts.
But up to a certain point. Beyond 3 the marginal benefit diminishes and it might be counterproductive as
4.6: When You Have Alignment, Cherish It
Make sure you end up with people with your same core values.
4.7: If You Can’t Reconcile, Consider If The Relationship is Worth It
If you can’t reconcile on the core values chances are you’ll drift with time, so you might want to do that sooner rather than later.
Chapter 5. Believability Weigh Your Decision Making
Ray Dalio says that in most organizations decisions are made either autocratically from the man on top or democratically. Both systems produce inferior decision making.
The best decisions are made by ideal meritocracy with believability-weighed decision making. Believability-weighed means that the opinions of more capable decision makers is weighed more than those of less believable decisions makers.
The opinions are weighed based on whether people have repeatedly and successfully accomplished the thing in question and can demonstrate they can logically demonstrate the cause-effect relationships behind their conclusions.
5.1: You Must Understand The Merit of Each Person’s Idea
But if you have never done something successfully don’t think you can tell others how it should be done, especially if they’ve done it successfully.
5.2: Find The Most Believable People Possible and Understand Them
Ray Dalio says you must check the belieavability of people you triangulate with and pick the best ones -usually those who have done it at least 3 times and who have great explanations of the cause-effect relationships that led them to their conclusions-.
Sometimes inexperienced people can have great ideas too though and sometimes better than experienced ones as they don’t have preconceived notions and experienced ones can get stuck in their own ways.
5.3: Think If You’re Playing Student, Teacher or Peer
You should upfront of in saying how confident you are in your opinion and if it’s a suggestion, a conviction or an opinion.
There’s also a weigh in the exchange depending on your position. It’s more important the student understand the teacher first than the other way around.
5.4: Understand How People Came By Their Opinions
Don’t just listen to the opinion as that can get you confused. Ask people why they think what they think instead and it will help you get to the truth.
And be skeptical of statements with “I think that… “. Even more skeptical of statements beginning with “I think that I… ” as people are poor at self-assessment.
5.5: Disagreeing Must Be Done Efficiently
Disagreeing must be done following a protocol. The teacher role always speaks first than the students. And agree on important things first, then move to the smaller things -if necessary at all-.
5.6: Make Sense of Important Things Is a Right & Responsibility
You don’t need to make judgement about everything and if not important and not your expertise let someone else decide and move on.
5.7: Pay More Attention To Fairness of System Than Getting Your Way
Don’t worry about “winning” but whether or not the system is fair. With a fair system you will get your way when you’re right and you will develop as a person to reach your full potential.
Chapter 6. Recognize How to Get Beyond Disagreement
In this chapter Dalio digs deeper on working out disagreements.
6.1: Principles Can’t Be Ignored By Mutual Agreement
If you don’t like a principle you need to speak up to change the principle, not just do what you wanna do.
6.2: The Right to Debate is Not The Same as The Right To Make Decision
Responsibilities and authorities are assigned to certain individuals based on their ability to handle them. They are stress-tested both up and down the chain and debates are always encouraged. But the final decision is still their responsibility (but if they go against believability-weighed opinion it’s a strong statement that will influence their future scorecard).
6.3: Don’t Leave Important Conflicts Unresolved
Important conflicts can undermine relationships and the decision making process. Always address them.
6.4: Once The Decision Has Been Made Everyone Must Get Behind It
The decision might change in the future again and people must not pretend they agree with it if they don’t, but they must get to work towards the success of the final goal.
6.5: If Meritocracy Comes Into Conflict With The Organization..
.. Declare martial law only in rare and extreme circumstances when the principles need to be suspended.
But be aware of people who agree to suspend the meritocracy for the good of the organization. Often these people place what they want above those of the organization. Get rid of these people.
6.6: If People With Power Don’t Obey The Principles, The System Will Fail
For that reason you only can give power to those who value the principles more than their individual or factional interests.
TO GET PEOPLE RIGHT…
People can change the culture for better or for worst.
Chapter 7. Remember WHO is More Important than WHAT
Who is taking the responsibility is more important than what should be done. Ray Dalio says his role that of a conductor looking for the best players able to do to better than him. Ideally he would find a conductor who would do a better job than himself.
As a conductor you must:
- Remember the Goal
- Give the goal to those who can achieve it
- Hold them accountable
- If they can’t achieve after training and time, get rid of them
7.1: Choosing Responsible Parties is Most Important Decision
The party holding responsibility are the most important parties in the system.
7.2: Those Bearing The Consequences Are Ultimate Responsible
If you bear the responsibilities of the failure you’re the ultimate responsible party. If you want to build a house and pick an architect, you’re the one ultimately responsible as you will pay for mistakes.
So when you put someone in a position of responsibility make sure their interest are aligned with the final person bearing the consequences. And make sure everyone has someone to report to.
7.3: Remember The Force Behind The Thing
Companies don’t make decisions, people do. Change the people, and change how things develop.
Chapter 8. Hire Right: Huge Penalties for Hiring Wrong
Ray Dalio says people hire people whom they like, which are basically people who are like themselves. So he developed two ways to radically improve Bridgewater hiring practices:
- Be crystal clear on what type of person they were looking for and
- Develop a way to assess people at a much more granular level
At a high level they’re looking for people who thinking independently, argue open mindedly and assertively and, most of all, value the intense pursuit of truth and excellence, improving themselves and the organization.
8.1: Match The Person to The Design
Don’t design jobs to fit people but think which values, abilities and skills you need -in that order- and find a person that fits those.
Values are deep seated beliefs that motivates people and determine people’s compatibility with each others; abilities are ways of thinking and behaving (faster learners, big picture types etc.); skills are learned tools -the easiest to chance-.
Since most people don’t change much, especially in the short term, it’s best to assume their values and abilities won’t change at all.
Once you know who you’re looking for, make your hiring systematic and scientific.
8.2: Different Personalities Make For Different Jobs
Ray Dalio is a big proponent of personality assessments, which he says are often more reliable than interviews.
He also has a top suggestion on how to use the human tendency of people to pick people who are like themselves: if you are looking for a visionary, have other visionaries interview the candidate as their positive opinion will give you a stronger clue.
8.3: Think of Your Team The Way Sports Fans Do
Nobody by itself has it all for success and everyone must excel.
8.4: Pay Attention to Track Records
Since people don’t often really change that much, track records do matter. But be wary of school track records: it will not tell you much in terms of abilities you are looking for. School is best at measuring memory, processing speed, determination to succeed and the ability to follow direction.
And check references.
8.5: Hire People You Want to Share Your Life With
You want to hire for long term, so don’t just look at the ability to do the first job you are hiring them for, but hire based on long term compatibility.
- Look for candidate with lots of great questions
Great questions are a much better indicator of future success than great answers.
8.6: Provide Both Compensation and Opportunity With Salaries
Pay enough that people are not under financial stress. Ray Dalio says to pay more than it’s fair but not so much that people become unmotivated fat cats.
Capturing all the intricacies of top performance is very hard, but you should try to put incentives loosely tied to performance metrics.
And finally, I loved:
The very best negotiation are the one saying “you should take more” “no you should take more”.
8.7: Consideration and Generosity Are More Important Than Money
Some people respond to generosity and some others respond more to money. You want more of the first kind of people, and start with yourself: be generous first and expect the same from others.
8.8: Great People Are Hard to Find…
.. So make sure you know how to keep them. Encourage them to speak up and assign a mentor.
Chapter 9. Constantly Train, Test, Evaluate and Sort People
Ray Dalio says that both people and design must improve for the machine as a whole to improve.
It can be hard but if people can’t get up to the bar in an acceptable time frame, they must go. Choose between keeping incapable and liked people and missing your goals or getting rid of them and achieving your goal.
At Bridgewater you have no choice because you must choose excellence, which at the end is best for everyone.
9.1: You And The People You Manage Go Through an Evolution Process
Since people evolve, the career cannot be planned from the outset. The evolution is a natural consequence of discovering strengths and weaknesses and how to tackle them.
The best way to teach them is to let them fail and make mistakes.
9.2: Provide Constant Feedback
Assessments should not come as a surprise because they should be constant.
9.3: Evaluate Accurately, Not Kindly
It might not seem so at first blush, but at the end of the day accurate and kind are the same thing.
You must be precise in assessing who has been responsible for what result and judge independently, because people tend to inflate their own contributions.
9.4: Tough Love is The Hardest and Most Important Type of Love
It’s the most important because it’s so rare. Compliments are easy, tough love is not but it’s the most useful. No pain, no gain.
9.5: Don’t Hide Your Observations About People
But explore them openly.
Make and note all observations, but at the same time don’t overemphasize any single observation but look at trends.
9.6: Make Personal Evolution Open, Evolutionary and Iterative
The review must be done together with the person being reviewed and must be ongoing.
There can be an inherent struggle in open evaluations: the evaluated see themselves better and have an interest in appearing better.
Keep in mind that your only final goal is always the truth.
9.7: Know How People Operate Is More Important Than What They did
Ray Dalio says that knowing how people operate and whether that way of operating will lead to good results is more important than knowing what they actually did.
In Bridgewater, they call it “paying more attention to the swing than to the shot”.
If someone is doing a job poorly pay attention if it’s because of a lack of learning, which can be fixed, or a lack of ability, which cannot be.
9.8: If You’re in Sync About Weaknesses It’s Probably True
If you are in sync with someone about their weaknesses it’s because it’s probably true.
I also found interesting how Ray Dalio highlights that people feel always safer in evaluating candidates for hiring than colleagues and that anyone looking for the truth should see how that’s a mistake.
9.9: Train, Guardrail or Remove. Don’t Rehabilitate
Rehabilitation is an attempt to create changes in values and abilities, but since those are difficult to change, you’re better off removing incompatible people.
Including the people you love. The best way to “shoot the people you love”, says Dalio, is to love the people you shoot. Do it with consideration and in a way that helps them.
Sometimes you can let people step back to another role after failing, but you have to be cautious about it. They could grow resentful and that position could go to someone better suited.
9.10: Transferring is to Benefit The Community
Both managers should agree a new role is the best highest use for someone. If there’s no such role they should escalate to make a termination. For continuity reasons it’s always best to let people finish their task and goals before moving to a new position.
9.11: Don’t Lower The Bar
Ray Dalio says that at Bridgewater they cannot compromise on the fundamentals of their culture and if a person cannot operate within the requirements of excellence and radical truth and transparency in an acceptable time-frame, he must go.
TO BUILD AND EVOLVE YOUR MACHINE…
Ray Dalio says that thinking of your organization as a machine has some important ramifications on how you behave.
Chapter 10. Manage as Operating a Goal-Achieving Machine
Anyone diagnosing problems must understand how the parts of the machine -the design of the people in it- are like and how they work together.
10.1: Look Down On Yourself And Your Machine From High Level
That macro-perspective of looking at yourself and the machine from afar will give you a better perspective and much better insight.
Always simultaneously try to accomplish the goal and evaluate the machine, people and design as all outcomes are a reflection of how the machine is running.
10.2: Move Closer To Your Goals and Train/Test The Machine
Use any situation to move closer to your goals and to train and test the machine.
Training and testing your machine is even more important than moving closer to your goal because that’s how you build a solid organization working well in all circumstances.
I particularly liked that Dalio suggests to look at everything as a case study and look at it at two levels: the case level and what to do about it and the machine level (why that outcome was produced).
10.3: Managing, Micro-Managing and Non Managing
Micro managing is telling the people working for you what tasks to do or doing the task for them. Not managing is letting their do their tasks without oversight or involvement.
Great managers orchestrate like conductors of an orchestra.
10.4: Your People Are The Most Important Resource: Know Them Well
Know how much confidence you can have from the people around you instead of assuming. And regularly take a temperature check of the most important people around you.
10.5: Assign Responsibilities Clearly
It made me chuckles when Dalio says people in organizations are often like children playing football and all run after the ball. Avoid that with clearly defined responsibilities.
10.6: Probe Deep and Hard to Learn What You Can Expect
Ray Dalio asks people reporting directly to him to take 10-15 minutes daily to write a report of what they did, their thoughts and their problems. He says that probing on problems allows you to get a feeling before those problems hit with full force.
It’s also important to probe to a level beneath your direct reports and allow them to escalate problems to you, because you can’t fully know the person until you know how he behaves with his direct reports.
10.7: Think Like an Owner
.. And expect the people you work with to do the same. Like Dalio said before, you don’t experience the consequences of your action, you’ll take less ownership of them.
Thinking like an owner means that you are always responsible… Even when on vacation.
Read more on becoming a linchpin instead of an employee living for paychecks in Linchpin by Seth Godin.
10.8: Recognize and Deal With Key Man Risk
Every key person should have one person who can replace him.
10.9: Don’t Treat People The Same, Treat Them Appropriately
To treat people fairly and appropriately, you must treat them differently. But all are treated with the same set of rules.
Over the years many threatened Dalio to quit, sue or spread bad press. He says that while it seemed easier to “just let things go away” giving in to threats is short sighted and communicates that the rules have changed. It only invites more of the same behavior.
He says he is willing to take the punch in the short term because he’s worried about doing the right thing, not what people think.
10.10: Great Leadership is Not What It’s Made Out to Be
Dalio says he does not describe what he does as great leadership because he believes what most people think of leadership is ineffective. The stereotypical leader is strong, confident and motivates others to follow him. The emphasis on “follow”.
He says that it’s more important to have challengers than followers and you should be both weak and strong at the same time. Asking question is perceived as weak and indecisive, Dalio says, but it’s not because it’s a necessary step to becoming strong and decisive.
Don’t Worry Whether People Like You
Some people will dislike you no matter what decision you take, says Dalio. You only have to worry about making the best decision possible. If you are in a leader position it’s also plausible to believe your opinion weighs more than the average person’s opinion. If that weren’t true than the average person should be in your position.
How To Lead
The best way to deal with your people is to encourage everyone to come up with their own ideas and let the meritocracy decide so openly and reasonably that everyone will recognize the valid merits of your thinking.
Once the decision has been taken in a meritocratic way, be happy whether your idea “won”or not as long as the best idea wins.
And don’t give orders to follow, but strive to be understood, understand and get in sync.
10.11: Hold People Accountable..
… And appreciate them for holding you accountable. Keep in mind you can’t hold people accountable when there wasn’t a clear agreement between you to, so always be clear.
10.12: Communicate The Plan Clearly and Have Clear Metrics
Once you decide on a plan it’s your responsibility to communicate it well and know how you will measure progress.
10.13: Escalate When You Can’t Handle Responsibilities
Escalation is not a failure but a responsibility
Chapter 11. Perceive and Don’t Tolerate Problems
Most people have a tendency to celebrate wins and sweeping problems under the rag. Those people have their priorities exactly backwards.
11.1: If You’re Worried, You Need to Worry..
.. And if you’re worried, you don’t need to worry.
This really made me smile. A constant saying of mine has always been “the best way to be unsafe is to feel safe”
11.2: Your Machine Must Check if Things Are Good or Not
You have to make sure that people are not afraid to look for, investigate and report problems. Dalio for example gives them independent reporting lines.
Without systems that make sure problems are brought to surface you cannot count on people to raise all the problems you need to hear about.
And be aware of group-think: the fact that nobody seems concerned doesn’t mean nothing is wrong (also check the spiral of silence on Wikipedia)
11.3: Be Very Specific About Problems
Avoid “we” and “they”, be specific about people.
11.4: Don’t Be Afraid to Fix Difficult Problems
Sometimes people can be afraid to start tackling problems which seem too difficult to fix. But not fixing them is worse.
Chapter 12. Diagnose Problems to Get at Their Root Cause
Ray Dalio says that the most common issues when fixing problem is not getting to the root cause, not connecting the problems to people and not connecting the problems to see patterns.
12.1: Diagnose Well and Ask These Questions
- Is the outcome good or bad
- Who’s responsible for the outcome
- Is the party responsible incapable or is the design bad.
12.2: Diagnose Continuously
Your system should keep diagnosing on an ongoing basis.
12.3: Diagnoses Should Produce Outcomes
Or at the very least lead to theories about root causes and clarify what information is needed to reach outcomes
12.4: Use Drill Down Techniques
The step one is to list all the problems and identify the root causes. Ray Dalio uses the “5 whys technique” (5 whys on Wikipedia).
12.5: Diagnosis is Foudational to Progress and Quality Relationships
As you dig deep into problems, it’s also an opportunity to get to know people better and help them grow (and vice versa).
Chapter 13: Design Your Machine to Get Around Your Problems
Once you find out the problems, you have to design plans to solve them
13.1: Build Your Machine
Instead of focusing on each task at hand, try to modify the machine in a way that you fix the issue at the operating system level. It takes longer but it will pay many times over.
13.2: Systematize Principles And How to Implement Them
Build your principles into habits and into the machine.
Ray Dalio for example put all his thinking process and principles into algorithms to systematize his decision making.
13.3: A Good Plan Resembles a Movie Script
Try to visualize different plans and assess second and third order consequences they will bring about.
13.4: Between Now and Then There’s a Work-Through Period
Between a bad now and a good then you try different plans and designs
13.5: Build Organization Around Goals, Not Tasks
Build the organization around goals and organize departments and sub-department around “gravitational pull”.
Hire and build from the top down. You hire managers before hiring reports. The people overseeing others must have higher standards, don’t just trust people to do their job well.
13.6: Create Organizational Chart Like a Pyramid
The arrows should go down and don’t cross. The whole organization should look like a series of pyramids, but try to minimize layers to minimize hierarchy.
13.7: Create Guard Rails When Strictly Needed
Guard railing is to help good people perform better, not to prop-up not good enough people. An example of good guard railing is siding people with other people who have key strengths they are lacking.
13.8: Keep Strategic Vision While Making Tactical Changes
Don’t act like you don’t have time for strategic issues because you’re dealing with the tactical ones. Kicking the can down the road is the path to slaughter.
13.9: Have Good Controls to Fence Dishonesty
Do not assume that people will act in your interest rather than their own. When faced with the choice of being fair or taking more for themselves most people will take more for themselves.
Dalio says that even a minimum of cheating is intolerable, so investigate and let people know you will investigate. Dalio suggests to use public hanging and shaming to deter bad behavior and make sure everyone sees the bad behavior.
13.10: Have Clear Reporting Lines for Responsibilities and Reporting Lines
Assign responsibilities based on workflow and abilities, not job titles.
Dalio also says he is always looking for leverage, and technology is a great way of doing so. For example designing FAQ and building manuals and training (same as Michael Gerber suggests in The E-Myth Revisited).
13.11: Virtually Everything Will Cost More and Take Longer
Virtually nothing goes according to plans. Dalio usually multiplies the estimates by 1.5.
Chapter 14. Do What You Set Out to Do
Motivations of why people follow through differ, says Ray Dalio. And at the end of the day, most of success comes from doing mundane and often distasteful stuff, like identifying problems and sticking through it for a long time.
My Note: on the importance of long term commitment for success, but also for long term growth of your passion, I warmly invite you to read Grit by Angela Duckworth).
14.1: Work For Goals You’re Excited About
.. And think about how your tasks are connected to those goals.
14.2: Recognize Everyone Has Too Much To Do
What differentiate those who do a lot with the same amount of time is creativity, character and wisdom. Creativity leverages people, technology or different work approaches. Characters helps wrestle with the challenges. Wisdom looks at us as a machine from above to prioritize, redesign and make sensible choices.
If something bad hasn’t happened yet, wait and it will. But it is what is, success is going from failure to failure without loss of enthusiasm.
14.3: Use Checklists
But don’t confuse them with responsibilities. Your task is doing your job well and achieving your goals, not crossing items off a list.
14.4: Allow Time For Rest and Renovation
Plan and schedule for rest.
14.5: Ring The Bell
Do celebrate when you achieve your goals.
Chapter 15. Use Tools and Protocols
Dalio says that even though most can see why these principles make sense, they won’t be implemented because people agree or recognize it makes sense.
Tools and protocols are needed to shape those principles into habits.
15.1: System-Embedded Tools Is Especially Useful For Ideal Meritocracy
For ideal meritocracy to operate the way Ray Dalio describes it, you need effective tools to collect all the data and convert it into decisions. These tools allow people and systems to work with each other in a symbiotic way.
A good system will make the system fair and all decisions less arbitrary.
Chapter 16. Don’t Overlook Governance
Governance is the oversight systems that removes people or processes when they are not functioning well. And all the principles will be useless without good governance.
Governance makes sure that the best interests of the whole are placed above those of the individuals.
16.1: To Be Successful All Organizations Need Check And Balances
For an ideal meritocracy governance must always be more powerful than any single individual. Make sure nobody is more powerful than the system and that nobody is irreplaceable.
My Note: as a website on sociology and Power Moves, I must note the divergence here. Your interest as an individual is to be (almost) irreplaceable instead. But it also means you deliver outstanding work, which is great for the organization. And if you happen to work in a bad company with a bad boss, read this how to deal with a terrible boss.
16.2: A Great CEO Is Not As Good As a Group of Great Leaders
In Bridgewater Dalio places several co-CEOs instead of just one. That’s what’s best for ideal meritocracy, he says.
16.3: Great Partnerships Still The Way To Go
All governance, check and balances and principles will take you far unless you have great partnerships. Such as, capable people in positions of power who want to operate for the good of the community based on the agreed upon principles.
Work Principles: Putting It All Together
Ray Dalio says we work together to accomplish three things: more leverage to accomplish our goals, quality relationships and money that allow us to buy what we want for us and others.
Ray Dalio believes an ideal meritocracy is the best way to achieve all of them. An ideal meritocracy requires you to do three things:
- Put honest thoughts on the table for everyone tosee
- Have thoughtful disagreements to come up with the best answer possible
- Obey to meritocratic ways of getting past disagreements (such as believability-weighed decision making)
Real Life Applications
This is how I would recommend you strive to apply Ray Dalio’s principles:
Always look at reality. Love reality even when it’s harsh.
Radical Open Mindedness
Be open to accept the feedback you receive on your current skill levels, action and personality. Only by accepting the feedback from the real world as openly as you can you’ll be able to move forward as quickly as you possible.
Foster relationships based on radical transparency. Accept and give feedback with full transparency and straightforwardness. Don’t start business ventures with close minded people who can’t handle radical transparency.
My Note: don’t be radically transparent with everyone! Most people would get hurt and you’d make enemies out of them (read How to Win Friends for more).
Sit Through Pain… With A Pen
Painful experiences with reflection are the biggest growth opportunities. Don’t shy away from pain. Sit through it and make your principles.
Just genius. Pick the people with the most credibility and assign different weights to their opinions.
Duty Of Speaking Up
If you’re building a company, make it a duty of every employee to speak up when unhappy or when they feel wronged. It will stop rumors and dissatisfaction from spreading behind people’s back.
Sub-Principles Org-Chart Not Perfect
Some sub-level principles did not fit well with their upper level principles. They still made sense, but they would have been better under other higher level principles.
Some concepts repeated across different principles and a slight pruning would have made the book more digestible.
The concept of “the whole is more important than the individual” is good to reach a goal. However it can lead to treating the individual as disposable, especially in bigger corporations (something Sinek talks about in Leader Eat Last).
The idea of “loving the person you shoot” can be applied in many harsh ways too. Call me an ineffective romantic, but I like to think that bonding among individuals can matter as much as the whole.
Principles by Ray Dalio has so many insights all packed into one single book that it’s crazy.
It’s one of the best book I have read on people and psychology, one of the best book I have read on business and the best book I have read on how to shape a company culture.
All packed into one.
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