Book Review: Principles | Ray Dalio
Ray Dalio is founder of one of the biggest America’s investment firm Bridgewater Associates. He has launched several innovative funds in the market. In 2013, it was the largest hedge fund of the world. And in 2020, Bloomberg ranked him world’s 79th wealthiest person.
“Principles” is recommended by top influential people like Bill Gates and Tony Robbins. In this book, Ray Dalio has shared his approach to life and the mindset he has used in his life.
This book has some super-rich knowledge; that on your own you may take years to learn. It’s a peek into the mind of one of the most successful person in the world in his own words. A slight note of caution. This book does not contain any secret to success (and no book has it). It contains methods and processes used by a successful individual which if you apply in your personal or work life then it can improve your life.
For each situation in life, either success or failure, Ray reflects on the outcome and lessons from it. Then conceptualises that learning into an algorithm and forms a principle. This principle he uses in future while facing a similar situation. This book comprises his life and work principles and his approach to designing principles.
He has applied this approach in managing his organizations and personal life and has created Principles for work and life. He shares the work principles with all employees in the organization. And aligns everyone to a unified process and method towards a single goal.
In this book, he has shared all the Principles he has created and used for life and work over the years. Each Principle is a gem of knowledge and can improve the reader’s approach to life and work.
The book has a bank of knowledge and insights on organizational management, leadership, personal growth, and more. It gives you approach and knowledge on managing so many situations in life and at work. Every principle mentioned in the book is a great new thing to learn.
Here are the 5 key teachings or takeaways from the book “Principles” by Ray Dalio,
1. Importance of promoting radical truth and transparency
Ray promotes an environment where everyone has the right to speak and understand, bring out all the disagreements to the table, and not hold a critical opinion for anyone. In Bridgewater, disagreements are accepted and almost everything is shared with everyone with complete transparency. As there is no worse course in leadership than to hold to false hopes.
As per Ray, however scary the truth be, it will be better for everyone to know it in the long run. And meaningful relationships is maintained if everyone can speak only to each other.
2. Need to prioritize meaningful work and meaningful relationships
We all know it’s important to maintain satisfaction within employees to increase their productivity and get the best out of them. As humans, meaningful work and meaningful relationship are core to our satisfaction. That’s why it’s essential to focus on them. Also, it’s important to stay loyal to the mission and not to anyone who is operating inconsistently. As the owner of any organization, it’s our responsibility to promote meaningful work and relationships.
3. The 5 step process to solve anything
Ray has defined a specific 5 steps process to solve anything that if applied in our lives can improve and make things better. The steps are — have clear goals, identify the problems in front of the goal, diagnose that problem to reach to the root cause, design plans to get around the problem and execute the designed plan. Keep in mind that weakness doesn’t matter if you find solutions.
4. How to manage a Corporate Machine
Ray thinks of an organization as a machine and people and culture being the 2 parts of the machine. To make the organization succeed and engine running, it’s important to focus on those two parts of the machine. He shares pointers on how to manage both parts of the machine.
5. Importance of Idea Meritocracy
One of the key concepts of the book is idea meritocracy. The book covers how he has created the culture of Idea Meritocracy at Bridgewater and how it has helped his organization to grow and maintain a strong culture.
Idea Meritocracy is about giving merit to the idea, logic behind the idea, and not to the designation behind it. If you want to promote a flat and effective hierarchy at the workplace, then all the principles mentioned about Idea Meritocracy will be very helpful to you.
Each principle has been explained in detail to push it into our mindset, to make sure we understand the reasoning and not just to accept it blindly.
1. The book never asks us to apply and follow the listed Principles. Instead, Ray has pushed more on the philosophy behind having Principles and suggested readers create their own set of Principles. And if needed, relevant Principles can be part of the reader’s set of Principles as well.
2. The book is very well structured, where he first goes through his personal life to make us understand the character behind the Principles to make it more relatable. Then it covers the Life Principles and finally the Work Principles.
3. At end of each section, i.e. life principles and work principles, there is a summary page that gives us an excellent review of all the topics we read. Each of this section has a group of pages where only the Principles are listed without any details for future reference.
4. One of the best thing about the book is that Ray has created an eco-system around the book if you need to follow the Principles. There is a mobile app where you can find any Principle based on your situation in life. You can follow his LinkedIn page where he keeps reiterating the same Principles. It helps you apply the concepts learned.
Some things have been repeated a lot and the book could have been shorter but I get the idea was to explain everything related to each principle and leave it to the user what to accept and what not to. After you go through 70% of the book, a lot of things seem repeated. It could also that you have understood the concept so well that you get aligned to Ray’s mindset and predicted what to expect, so maybe it seems repetitive.
Everyone will have a lot to learn and gain from this book, no matter which phase of life you are in. Even if you are a student, someone who has started a career or someone who is running an organization. I recommend this book to each one of you and would recommend to not only read this book but also apply the concepts mentioned in your life.
Originally published at https://www.avishekkataria.com on October 6, 2020.
