My 5 Biggest Takeaways from Ray Dalio – Principles

I recently posted the below article on my personal LinkedIn page. I also wanted to share the article here on the Pleighties blog for I found tremendous value in Ray Dalio’s book, Principles.

I hope you enjoy the article on my 5 biggest takeaways from Ray Dalio’s Principles.

My 5 Biggest Takeaways from Ray Dalio – Principles

I came across Ray Dalio and his book, Principles, on a #AskGaryVee show Episode #275. After listening to the episode and hearing Dalio talk about his life, work, and his recent book – I immediately bought it.

After spending some time on my “to read” pile in 2019, I finally picked it up and began reading it as I rounded out 2019 and headed into 2020.

The book took me a bit longer to read on account of the holidays (Thanksgiving, Christmas, and the New Year) and balancing work/life, but upon finishing it – I highly recommend it to everyone.

Whether you’re an employee, employer, manager, senior executive, entrepreneur, start-up founder, HR department, investor, or anyone else – I’m sure you’ll find some valuable insights into one of the greatest investment firms and companies of the 20th and 21st century.

There’s so much real world knowledge, experience, case studies, information, and insights packed into the 590+ page powerhouse.

Below I’ve listed my 5 biggest takeaways from Ray Dalio – Principles:

#1. Bridgewater’s Values and Strategic Goals:

Bridgewater’s values and strategic goals have been the same from the beginning. To produce excellent results, meaningful work, and meaningful relationships through radical truth and transparency.

I truly believe that the above values and strategic goals are what laid the foundation for Bridgewater’s future and current success. I mean, who doesn’t want those values and goals out of their work life?

#2. Bridgewater’s Culture:

Radical Truth + Radical Transparency + Believability-Weighted Decision Making = Idea Meritocracy

The idea and notion of an idea meritocracy truly resonated with me after learning and reading about it. As I was reading what went into making Bridgewater Associates an idea meritocracy, the principles and logic behind it just made sense to me. However, with much in life, it’s easier said than done. The idea meritocracy takes tons of work, commitment, and accountability, but once you’ve fully committed to it – the results will follow.

#3. The Power of Documenting the Process(es) to Create Algorithms:

When it comes to believability-weighted decision making, hiring, organizational processes, and investing – it’s best to document the thought and logic that went into making those decisions. By doing so, you can not only test your logic, but you can create algorithms to stay consistent with your decision making process on similar instances as they arise in the future. In certain scenarios, you can retroactively test you logic/algorithms on past events and markets to see how they’d stand the test of time.

# 4. The 5-Step Goal Process: 

1. Have clear goals

2. Identify and don’t tolerate the problems that stand in the way of your achieving those goals

3. Accurately diagnose the problems to get at their root causes

4. Design plans that will get you around them

5. Do what’s necessary to push these designs through to results

It’s always good to have a solid framework when you’re setting goals for yourself whether that be personally or professionally. Ray shared his 5-Step Goal Process as a way to help others set goals and ensure they can work through them to achieve the intended results.

#5. In regards to hiring for your business or organization, make sure you know the difference between valuesabilities, and skills.

Values are the deep-seated beliefs that motivate behaviors and determine people’s compatibilities with each other.

Abilities are ways of thinking and behaving.

Skills are learned tools, such as being able to speak a foreign language or write computer code.

“At a high level, we look for people who think independently, argue open-mindedly and assertively, and above all else value the intense pursuit of truth and excellence, and through it, the rapid improvement of themselves and the organization. Because we treat work as more than just what we do to make a living, we look at every potential hire not just as an employee but as someone we’d want to share our lives with. We insist that the people we work with are considerate, and have a high sense of personal accountability to do the difficult, right things. We look for people with generous natures and high standards of fairness. Most importantly, they must be able to put their egos aside and assess themselves candidly.” -Ray Dalio

Although this section pertains more to HR, management, startup founders, and entrepreneurs who are hiring potential employees – I found Ray’s insights into the difference between values, abilities, and skills interesting. Most of us have all been on the receiving end of interviews and can empathize with the strange, arbitrary process that is applying and interviewing. Overall, I found his reflections on the hiring process and what Bridgewater looked for when they were hiring refreshing and insightful.

I hope you enjoyed the above 5 takeaways from Ray Dalio’s Principles.

What was your favorite takeaway? Did you read Principles and feel I missed anything? If so, leave your comments on what insights, principles, and perspectives you took from the book.

Finally, if you haven’t had a chance to read the book yet – I highly recommend you do.

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