Principles: Life and Work

by Ray Dalio

Being radically transparent and radically open-minded accelerates this learning process. It can also be difficult because being radically transparent rather than more guarded exposes one to criticism. It’s natural to fear that. Yet if you don’t put yourself out there with your radical transparency, you won’t learn.

People often make the mistake of focusing on what should be done while neglecting the more important question of who should be given the responsibility for determining what should be done.

Values are the deep-seated beliefs that motivate behaviors and determine people’s compatibilities with each other. People will fight for their values, and they are likely to fight with people who don’t share them.

Abilities are ways of thinking and behaving. Some people are great learners and fast processors; others possess the ability to see things at a higher level. Some focus more on the particulars; still others think creatively or logically or with supreme organization.

It is important for you to know what mix of qualities is important to fit each role and, more broadly, what values and abilities are required in people with whom you can have successful relationships. In picking people for long-term relationships, values are most important, abilities come next, and skills are the least important.

Your part in an employee’s personal evolution begins with a frank assessment of their strengths and weaknesses, followed by a plan for how their weaknesses can be mitigated either through training or by switching to a different job that taps into their strengths and preferences.