Principles: Life and Work

by Ray Dalio

to do exceptionally well you have to push your limits and that, if you push your limits, you will crash and it will hurt a lot. You will think you have failed—but that won’t be true unless you give up. Believe it or not, your pain will fade and you will have many other opportunities ahead of you, though you might not see them at the time. The most important thing you can do is to gather the lessons these failures provide and gain humility and radical open-mindedness in order to increase your chances of success. Then you press on.

As with our bodies, some parts of our brains cannot be materially affected by external experience (in the same way that your skeleton isn’t changed much through working out), while other parts can be strengthened through exercise

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

Don’t have anything to do with closed-minded people. Being open-minded is much more important than being bright or smart. No matter how much they know, closed-minded people will waste your time. If you must deal with them, recognize that there can be no helping them until they open their minds.

If either party to a disagreement is too emotional to be logical, the conversation should be deferred. Pausing a few hours or even a few days in cases where decisions do not have to be made immediately is sometimes the best approach.

If someone asks you a question, think first whether you’re the right person to answer it. If you’re not believable, you probably shouldn’t have an opinion about what they’re asking, let alone share it.

Don’t leave important conflicts unresolved.

Articulate your assessment of a person’s values, abilities, and skills up front and share it; listen to their and others’ responses to your description; organize a plan for training and testing; and reassess your conclusions based on the performance you observe.

Sometimes new people are offended when their managers don’t have confidence in how they are carrying out their responsibilities.

1) open-mindedly seek out the best answers and 2) bring others along as part of that discovery process.

it happened because most of the people in the process paid more attention to getting the tasks done than assessing whether the goals were being achieved.

Make departments as self-sufficient as possible so that they have control over the resources they need to achieve their goals.

Ensure that the ratios of senior managers to junior managers and of junior managers to their reports are limited to preserve quality communication and mutual understanding. Generally, the ratio should not be more than 1:10, and preferably closer to 1:5.

build a pyramid-like “succession pipeline” in which the next generation of leaders is exposed to the thinking and decision making of the current leaders so they can both learn and be tested.

Don’t just pay attention to your job; pay attention to how your job will be done if you are no longer around.

The whole organization should look like a series of descending pyramids, but the number of layers should be limited to minimize hierarchy.

Involve the person who is the point of the pyramid when encountering cross-departmental or cross-sub-departmental issues.

Don’t do work for people in another department or grab people from another department to do work for you unless you speak to the person responsible for overseeing the other department.

Recognize that it is far better to find a few smart people and give them the best technology than to have a greater number of ordinary people who are less well equipped.

Other than working harder for longer hours, there are three ways to fix the problem: 1) having fewer things to do by prioritizing and saying no, 2) finding the right people to delegate to, and 3) improving your productivity.