Principles: Life and Work

by Ray Dalio

d. Use evaluation tools such as performance surveys, metrics, and formal reviews to document all aspects of a person’s performance.

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

d. Evaluate employees with the same rigor as you evaluate job candidates.

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

d. Beware of paying too much attention to what is coming at you and not enough attention to your machine.

c. When making rules, explain the principles behind them.

d. You should be able to delegate the details.

f. Have the people who report to the people who report to you feel free to escalate their problems to you.

b. Don’t worry about whether or not your people like you and don’t look to them to tell you what you should do.

c. Don’t give orders and try to be followed; try to be understood and to understand others by getting in sync.

c. Beware of group-think: The fact that no one seems concerned doesn’t mean nothing is wrong.

a. Avoid the anonymous “we” and “they,” because they mask personal responsibility.

f. Identifying the fact that someone else doesn’t know what to do doesn’t mean that you know what to do.

d. Recognize that people who make purchases on your behalf probably will not spend your money wisely.

13.11 Remember that almost everything will take more time and cost more money than you expect.

14.1 Work for goals that you and your organization are excited about and think about how your tasks connect to those goals.

14.2 Recognize that everyone has too much to do.

16.3 No governance system of principles, rules, and checks and balances can substitute for a great partnership.

For any group or organization to function well, its work principles must be aligned with its members’ life principles.

b. Great people have both great character and great capabilities. By great character, I mean they are radically truthful, radically transparent,

1) having clear goals, 2) identifying the problems preventing the goals from being achieved, 3) diagnosing what parts of the machine (i.e., which people or which designs) are not working well, 4) designing changes, and 5) doing what is needed. This is the fastest and most efficient way that an organization improves.

I wanted all the people I worked with to be my “partners” rather than my “employees.”

a. In order to be great, one can’t compromise the uncompromisable.

There should be no hierarchy based on age or seniority.

Money is a byproduct of excellence, not a goal.

an idea meritocracy—i.e., a system that brings together smart, independent thinkers and has them productively disagree to come up with the best possible collective thinking and resolve their disagreements in a believability-weighted way—will outperform any other decision-making system.

By being radically truthful and radically transparent, we could see that we all have terribly incomplete and/or distorted perspectives.

“How do you know that you’re not the wrong one?”

they are forced to confront their own believability and see things through others’ eyes as well as their own.

it is much harder and much less efficient to work in an organization in which most people don’t know what their colleagues are really thinking. Also, when people can’t be totally open, they can’t be themselves.

We’ve found that bringing everything to the surface 1) removes the need to try to look good and 2) eliminates time required to guess what people are thinking. In doing so, it creates more meaningful work and more meaningful relationships.

Thinking for yourself and challenging each other’s ideas is anti-cult behavior, and that is the essence of what we do at Bridgewater.

But remember that my most fundamental principle is that you have to think for yourself.

A GPS helps you get where you’re going, but if you follow it blindly off a bridge—well, that would be your fault, not the GPS’s.

Make your passion and your work one and the same and do it with people you want to be with.

Work is either 1) a job you do to earn the money to pay for the life you want to have or 2) what you do to achieve your mission, or some mix of the two.

To have an Idea Meritocracy: 1) Put your honest thoughts on the table 2) Have thoughtful disagreement 3) Abide by agreed-upon ways of getting past disagreement

Understanding what is true is essential for success, and being radically transparent about everything, including mistakes and weaknesses, helps create the understanding that leads to improvements.

The more people can see what is happening—the good, the bad, and the ugly—the more effective they are at deciding the appropriate ways of handling things.

It is a fundamental law of nature that you get stronger only by doing difficult things. While our idea meritocracy is not for everyone, for those who do adapt to it—which is about two-thirds of those who try it—it is so liberating and effective that it’s hard for them to imagine any other way to be.

For me, not telling people what’s really going on so as to protect them from the worries of life is like letting your kids grow into adulthood believing in the Tooth Fairy or Santa Claus.

As Winston Churchill said, “There is no worse course in leadership than to hold out false hopes soon to be swept away.” People need to face harsh and uncertain realities if they are going to learn how to deal with them—and you’ll learn a lot about the people around you by seeing how well they do.

Integrity comes from the Latin word integritas, meaning “one” or “whole.”

People who are one way on the inside and another on the outside become conflicted and often lose touch with their own values. It’s difficult for them to be happy and almost impossible for them to be their best.

Making judgments about people so that they are tried and sentenced in your head, without asking for their perspective, is both unethical and unproductive. Having nothing to hide relieves stress and builds trust.

a. Never say anything about someone that you wouldn’t say to them directly and don’t try people without accusing them to their faces.

Next to being dishonest, it is the worst thing you can do in our community.

Judging one person by a different set of rules than another is an insidious form of corruption that undermines the meritocracy.

What you’re not allowed to do is complain and criticize privately—either to others or in your own head. If you can’t fulfill this obligation, then you must go.

giving people the right to see things for themselves is better than forcing them to rely on information processed for them by others.