Principles: Life and Work

by Ray Dalio

PART III: WORK PRINCIPLES • An organization is a machine consisting of two major parts: culture and people. a. A great organization has both great people and a great culture. b. Great people have both great character and great capabilities. c. Great cultures bring problems and disagreements to the surface and solve them well, and they love imagining and building great things that haven’t been built before. • Tough love is effective for achieving both great work and great relationships. a. In order to be great, one can’t compromise the uncompromisable. • A believability-weighted idea meritocracy is the best system for making effective decisions. • Make your passion and your work one and the same and do it with people you want to be with. TO GET THE CULTURE RIGHT . . . 1 Trust in Radical Truth and Radical Transparency 1.1 Realize that you have nothing to fear from knowing the truth. 1.2 Have integrity and demand it from others. 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. b. Don’t let loyalty to people stand in the way of truth and the well-being of the organization. 1.3 Create an environment in which everyone has the right to understand what makes sense and no one has the right to hold a critical opinion without speaking up. a. Speak up, own it, or get out. b. Be extremely open. c. Don’t be naive about dishonesty. 1.4 Be radically transparent. a. Use transparency to help enforce justice...