[Knowledge Blast] : Principles by Ray Dalio

Ray of light

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When you enter the world of business, it is important that you develop a set of principles to guide you. These principles will allow you to progress forward even when times are unclear.

The author of this book, Ray Dalio, is one of the wealthiest people in the world. Throughout the book, he shares what principles he has adopted in his life and he sheds some light for the reader about how he runs his successful business, Bridgewater Associates.

Guiding light

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Like I said in the first paragraph, having a set of solid principles in business is essential. These will keep you on the right path even when you are facing tough circumstances.

The same applies to the principles you have in your life.

Your principles will have fundamental truths that can be transferred to different scenarios in life. They will move you forward or they might hold you back.

Think of nature. It's sad to see a beautiful gazelle eaten by a pack of vicious hyenas. But this is just a natural fact of life - part of the balanced ecosystem that has evolved over time. If you were to deny this reality and try to intervene, it would have dangerous repercussions.

This is a reminder that we need to go about our life with a rational sensibility. Life ain't pretty all of the time, we need to be able to look at it realistically and accept it for what it is.

I once read somewhere that the word failure shouldn't be in the dictionary. It should be replaced with experiment. Failure is never just a failure, it is also a great opportunity to evolve. Everybody at some point in their life has had to adapt to some new circumstances. The key is to take the hard events in your stride and continue to improve yourself from it.

Choose your goals right

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When you sit down to write down goals, you have to come correct. Be prepared to pick apart all of your priorities and narrow a few things down.

"If you limit your goals to what you know you can achieve, you are setting the bar too low."

In a previous Knowledge Blast, I summarised a book called The 10X Rule, where it goes into great detail about how to amp up your goal setting so you'll break through the ceiling of limitation when it comes to achieving your goals.

The biggest downfall when it comes to setting goals is setting too many at once. When you choose one goal, you are overwriting other goals automatically. This means you have to strip away all of the things that you don't desire and find out what it is that you want to achieve most.

You should examine the situations surrounding your goals and determine what is going to be in your way. If you can honestly identify your weaknesses and aim to improve upon them, rather than ignoring them, you will slowly but surely be able to control yourself and tackle your goals head-on.

The truth matters

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If you have followed my Knowledge Blast's over the past fortnight, you might remember a book that I summarised called Everybody Matters. In this post I went into a bit more detail about the importance of transparency and sharing the truth with your employees.

Ray Dalio also preaches this to great lengths in Principles. He describes how he has practiced this principle within Bridgewater Associates to create an environment for his employees where they can freely speak their mind.

He makes a similar statement to one of the points made in Everybody Matters, employees should be treated like a partner in a long-term relationship. In EM, it stated that you should treat your employees like family. It seems like Dalio takes it even one step further...
Having this kind of relationship with your peers means being upfront and clear about who has what responsibilities, being respectful and also looking out for one another.

A workplace is at its best when employees show more consideration for their colleagues than they expect to be shown.

This statement could be seen as total nonsense by those of you who are used to a workplace more centered around stepping on each other's toes. The truth is, when everyone in your business is acting selfishly and not actively going out of their way to improve their colleagues, the workplace will experience a much lower degree of productivity and quality.

We need to focus on selflessness and providing the support and tools for others around us to grow.

P-p-performance!

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This section is going to have a focus surrounding performance reviews, and methods that Ray uses within his business to check up on his employer's standards. He makes a great point straight off the bat when it comes to performance and how to approach it.

Being dishonest isn't always a malicious act.

This is a point that I want to reverberate throughout the BuddyUP community. This is because of our new channel #post-drop.

In the channel, we have certain requirements before you can send your link. It's centered around feedback and constructive criticism, it's the channel for the people who want to fine tweak and seriously improve their writing, formatting, and expression.

There is another line that sticks out within the book for this topic and that is:

The secret to success isn't radical kindness, it's the radical truth.

We have the ability to pick out the weaknesses of each other in a relatively controlled environment so that we can grow and evolve along the way. Having accuracy and honesty amongst us all is going to benefit us in the long run. If we can be cautious and encouraging with our words we will make sure that we don't wreck peoples motivation in the process.

Ray Dalio likes to think of his employees as if they are all specific parts of an engine, the engine that is leading your business towards its goal.

Each employee has specific traits, talents, and personalities which can benefit not just your company, but other members of your team at the same time. Not too long ago, I summarised the book called Humans are Underrated and within the post, I have a segment called Team Power. In this section, I speak about the different factors that contribute to a great team and how finding the right personalities for your team is more beneficial than having a team full of individually skilled characters.

Once you have identified your engine, you will be one step closer to speeding off towards your goal.

You can start to create a flowchart for your company once you know who does what and what should be done when. By having this realistic timeline of events, you can clearly see where the work is at all times. This allows you to see exactly where problems are arising and you will have a much better idea of how to tackle them and who to approach.

Metrics are the next step. Now that you have your engine rolling and your ability to see how it's chugging along, you are going to want to make sure you know when to oil it (don't be oiling up any employees mind, that might get you in trouble!).
Introducing metrics, or performance measurements will help you realize where and when something is going wrong.

Metrics can provide a considerable boost to productivity, and since they're unbiased, accurate and reliable, they're perfectly suited to an environment that practices radical truth and transparency.

Top down thinking

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To finish with, I'm going to share some points in the book about how Ray Dalio explains where to build your engine and how to maintain it properly.

When something goes wrong, it is very easy to lose the plot and throw everything up in the air. This comes back to an earlier point, you need to use the rational part of your brain, rather than your emotional one. A problem requires a solution and a solution opens up possibilties for improvement for your business.

To make sure you make the most out of the problems that come your way, you need to systematically design your company so that the errors are picked up fast and the solutions are applied quickly. This comes from great management and their ability to handle problems when they crop up.

Every manager should be trustworthy and have high standards. If this isn't the case, their weaknesses and poor performance will eventually spread to their staff.

We are all influenced by the people we spend time with and this rule is still true when it comes to our managers. If the people who manage us lack the traits that make a successful human being, the filter effect will surely take hold and will influence us too.

Another great point to note is the ratio of managers to employees, I am going to quote below a segment which explains the reasoning behind a certain ratio. Before this paragraph there was a statement that a good rule of thumb was 1 to 10.

The ideal ratio is closer to five employees for every one manager, as this will give your managers the best chance of having meaninful relationships and mutual understandings with each employee. But rather than seeing strict rules on team sizes, you'll get the best results by assessing each managers capabilities and proceeding accordingly.

As you can see, fostering meaningful and genuine relationships isn't just how to get the most out of your Steemit experience. It's a way of life.

Learn anything valuable?

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Phew. I know I definitely did. My friend told me about Ray Dalio a few days ago and was explaining some of his principles over the phone to me. After going through this book and seeing how important some of these principles are, I knew I had to make a longer post to make sure I hit a multitude of them. I also wanted a post that I could relate back to whenever I needed some further insight.

There is an awful lot to digest in this post and Ray is an exceptionally interesting man to study. I believe we all have the ability to replicate his genius on some level and we can only strive to improve ourselves daily to evolve into something better.

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Images taken from Pixabay.com & Amazon