Principles: Life and Work

by Ray Dalio

Recognize that tough love is both the hardest and the most important type of love to give

Recognize that while most people prefer compliments, accurate criticism is more valuable.

By synthesizing, I mean converting a lot of data into an accurate picture.

For performance reviews, start from specific cases, look for patterns, and get in sync with the person being reviewed by looking at the evidence together.

Learn about your people and have them learn about you through frank conversations about mistakes and their root causes.

Recognizing and communicating people’s weaknesses is one of the most difficult things managers have to do.

Knowing how people operate and being able to judge whether that way of operating will lead to good results is more important than knowing what they did.

If someone is doing their job poorly, consider whether it is due to inadequate learning or inadequate ability.

Recognize that when you are really in sync with someone about their weaknesses, the weaknesses are probably true.

When judging people, remember that you don’t have to get to the point of “beyond a shadow of a doubt.”

It should take you no more than a year to learn what a person is like and whether they are a click for their job.

c. Continue assessing people throughout their tenure.

9.9 Train, guardrail, or remove people; don’t rehabilitate them.

a. Don’t collect people.

b. Be willing to “shoot the people you love.” It

Tough love is both the hardest and the most important type of love to give.

Constantly compare your outcomes to your goals.

all great managers have both creativity and technical skills.

Build great metrics.

1) to move you closer to your goal, and 2) to train and test your machine (i.e., your people and your design).

Your policies should be natural extensions of your principles.

Understand the differences between managing, micromanaging, and not managing.

Managers must make sure that what they are responsible for works well.

These profiles should change as the people change.

Prioritization can be a trap if it causes you to ignore the problems around you.

Recognize that there are many ways to skin a cat.

Force yourself and the people who work for you to do difficult things.

Recognize and deal with key-man risk.

weak and strong at the same time.

Put things in perspective by going back before going forward. Before

When you encounter problems, your objective is to specifically identify the root causes of those problems—the

Recognize that design is an iterative process. Between a bad “now” and a good “then” is a “working through it” period.

Build the organization around goals rather than tasks.

imagine the best organization and then make sure the right people are chosen for it.

Great people and great technology both enhance productivity.

Governance is the oversight system that removes the people and the processes if they aren’t working well.

my wishes for you are that: 1) You can make your work and your passion one and the same; 2) You can struggle well with others on your common mission to produce the previously mentioned rewards; 3) You can savor both your struggles and your rewards; and 4) You will evolve quickly and contribute to evolution in significant ways.

It’s up to you to decide what you want to get out of life and what you want to give.