Principles: Summary and Review
Principles: Life & Work by Ray Dalio
Principles describes the “best practices” in the most successful companies. As a consequence, if you already work for a successful company or if you read a lot of business books most of these will seem familiar or obvious to you, and you can therefore safely skip this book if your company is already successful. As a corollary, if the principles come as a surprise to you, it’s a good sign that your company is not that successful.
The official summary is pretty good, you can just read that. I very much appreciated how the publisher made each principle easy to reference in a very detailed table of contents. Reminds me of the rule of thumb in How To Read a Book, if the book has a detailed table of contents, that’s a sign that the author is a deep and careful thinker.
The main life tradeoff: SAVOR LIFE vs. MAKE AN IMPACT
How to write a memo:
1. The High-Level Big Picture: I want meaningful work that's full of learning 1.1 Subordinate Concept: I want to be a doctor - Sub-Point: I need to go to medical school. - Sub-Sub point: I need to get good grades in the sciences. - Sub-Sub-Sub point: I need to stay home tonight and study.
“above the line” vs “below the line” to establish what level a conversation is on.
When a line of reasoning is jumbled and confusing, it’s often because the speaker has gotten caught up in below-the-line details without connecting them back to the major points. An above-the-line discourse should progress in an orderly and accurate way to its conclusion, only going below the line when it’s necessary to illustrate something about one of the major points.
The difference between “generosity” and “fairness”
When Bridgewater arranged for a bus to shuttle people who live in New York City to our Connecticut office, one employee asked, “It seems it would be fair to also compensate those of us who spend hundreds of dollars on gas each month, particularly in light of the New York City bus.” This line of thinking mistakes an act of generosity for some for an entitlement for everyone. “I didn’t have to get you any gift, so stop complaining”. We are generous with people, but we feel no obligation to be measured and equal in our generosity.
“Everyone thinks what they’re doing is more important than it is” If you ask everybody in an organization what percentage of the organization’s success they’re personally responsible for, you’ll wind up with a total of about 300 percent.
The greatest gift you can give someone is the power to be successful. Giving people the opportunity to struggle rather than giving them the things they are struggling for will make them stronger.
Be wary of the “royal we”, instead of “Client advisors aren’t communicating well with the advisors”, use “Harry didn’t write up a memo beyond the basic template to give to Mary”.
People Leverage Ratio
Aim for a 10:1, or 20:1 ratio (or 50:1 if you’re an executive). What this means: for every 1 hour spent managing that person, they’ll spend 50 hours moving the project along.