Principles Life & Work: Ultra Condensed Cliffnotes #19

eBook] Ray Dalio- Principles Life and Work | Shopee Malaysia

Below are my personal notes of Principles Life & Work. These highlights were what I used to write my personal development book, Wiser Next Week, a condensation of many different self improvement books

Markets:

The consensus is often wrong, so be an independent thinker. To make any money, you have to be write when they are wrong

Principles

Work for what I wanted, not for what others wanted me to do
Come up with the best independent opinion I could muster to move towards my goals
Stress test my opinions by having the smartest people I could find and challenge them to find out where I went wrong
Being wary of overconfidence and good at not knowing
Experiencing the results of my decisions and reflecting on what I did to produce them so I could figure out what could be improved

Mistakes

There is an incredible beauty to mistakes, because embedded in each mistake is a gem that’s waiting to be discovered if you solve it
Each mistake was probably a reflection of something I was (or others) were doing wrong, so if I could figure out what that was, I could learn to be more effective.
Great people got great by looking at their mistakes and weaknesses and figuring out how to get around them
“Mistakaphobia” We are fed with facts and those who make the fewest mistakes are considered to be the smartest, so we learn that it is emphasizing to not know and to make mistakes.
- There lives are spent following instructions and pleasing others. Thats why so many students who succeed in school fail in life
- Isn’t the point of learning to help you get what you want? So don’t you have to start with what you want and figuring out what you need to do in order to get it?
Within each group there are differences and they are intended to paint a picture of the world the way they’d like it to be rather than the way it really is.
Blaming bad outcomes on anyone or anything other than oneself is essentially wishing that reality was different, which is silly.
- What happens is that a lot of people don’t take personal responsibility for their outcomes and as a result, fail to make the best possible decisions
If you see that you are not capable of doing something, it is only sensible for you to have someone else do it, use all resources at your disposal
The biggest mistake most people make is not seeing themselves and others objectively.

5 Step Process

Setting Goals
1. You can have virtually anything you want, but not everything
  1. Failing to make the distinction between goals and desires will lead you in the wrong direction, because you’ll be inclined to pursue things you want that will undermine your ability to get things you want more
2. Don’t rule out a goal because of a superficial assessment of its attainability
3. There’s almost no reason you can’t succeed if you take the attitude of:
  1. Total flexibility, good answers can come from anyone or anywhere, there are far more good answers “out there” then there are in you
  2. Total accountability: Wherever the good answers are, its your job to find them
4. Remember that great expectations create great capabilities.
Identifying and Not Tolerating Problems
1. Take the mentality that most problems are potential improvements
2. If you stare down hard at your problems, they almost always shrink or disappear because you almost always find a better way of dealing with them
3. Best ways of getting at truths is reflecting with others who have opposing views and who share your interest in finding the truth rather than being proven right
  1. Have others point things out to you and objectively consider whether what they identify is true
4. Problems due to inadequate skill might be solved with training, whereas those arising from innate weaknesses might be overcome with assistance or role changes
5. Always get to the root, the cause of the problem. Don’t simply hack at the limbs (effects) of the overarching issue
Diagnosing the Problems
1. Be calm and logical, get at the root cause
2. It is ego and short sightedness that makes discovering their mistakes and weaknesses painful
3. What differentiates people who live up to their potential from those who don’t is a willingness to look at themselves and others objectively
4. Pain+Reflection=Progress
5. Be willing to look at your own behavior and the behavior of others as possible causes of problems
6. All problems need to be well-diagnosed before you decide what to do about them
Design the Plan and Determine the Solution
1. Visualize who will do what in order to achieve the goal
2. Ask yourself if the consequences are acceptable or unacceptable
Doing the Tasks
1. Being weak at any one of these steps is not a problem if you understand what you are weak at and successfully compensate for that weakness by seeking help

Your values determine what you want, your goals. In trying to achieve your goals, you will have problems that need to be diagnosed. Only after determining the real root causes of these problems can you design a plan to get around them. Once you have a good plan, you have to master the self discipline to do what is required to make the plan succeed.
You have the freedom to make whatever choices you want, though its best to be mindful of their consequences
The most important difference between great organizations and bad ones is in how well they manage their feedback loops.

Management Principles

Have integrity and demand it from others
- Never say anything about a person you wouldn’t say to them directly
- Don’t let loyalty stand in the way of truth and openness
- When mistakes and weaknesses are hidden, unhealthy character is legitimized
Create a culture where it’s okay to make mistakes but unacceptable not to identify, analyze and learn from them
Don’t worry about looking good, worry about achieving your goals
Ask yourself if you have earned the right to have an opinion
Recognize that conflicts are essential for great relationships because they are the means by which people determine whether their principles are aligned
- There is a giant untapped potential in disagreement, especially if the disagreement is between 2 more more thoughtful people
Don’t treat all opinions as equally valuable
If someone asks you a question, think first on whether you are the right party to be answering the question
- Consider your own and others “believabilities”, the probability that a person’s view will be right. We can roughly assess it according to the quality of a person’s reasoning and their track record
People are best at the jobs that require what they do well
Have people you want to share your life with
Pay for the person, not for the job
Constantly compare your outcomes to your goals
Perceiving problems is the first essential step toward great management
Problems are the fuel for improvement
Don’t use the anonymous “we” or they” as it masks personal responsibility, use specific names
Use issue logs, metrics, surveys, checklists, outside consultants and internal auditors to catch problems
The more mistakes you make and the more quality, honest diagnoses you have, the more rapid your progress will be
Many of life’s failures is men who did not realize how close they were to success when they gave up
Recognize short term failure as a step toward long term success
Avoid confusion, make clear which kind of conversation (debate, discussion, teaching) you are having and recognize that the purpose is ultimately to get to the truth, not to prove that someone is right or wrong
Have an explicit decision making hierarchy, ideally based on merit
Managing means
- Understanding how well your people and designs are operating to achieve your goals
- Constantly improving them
Don’t try to be followed, try to be understood and understand others
You can’t trust people with responsibilities if they don’t understand the goals
Personal contact at the time of personal difficulty is a must
There is also a difference between “I believe you made a bad decision” and “I believe you are a bad decision maker.”
Promote learning through trial and error, weigh the potential damage of a mistake against the benefit of incremental learning
People tell you what they want and tend not to be self critical. Its your job as a manager to get at truth and excellence. Not to make people happy
The efficiency of an organization decreases and the bureaucracy of an organization increases in direct relation to the increase in the number of people and the complexity of an organization
Build your organization from the top down, the foundation is at the top. Find managers that can help you design the machine
Managers should strive to hire, train and oversee in a way in which others can superbly handle as much as possible on their own
- Managers should view needing to get personally involved in the nitty gritty as a bad sign
Use “double do” rather than “double check” to ensure mission critical tasks are done correctly, get 2 independent answers
Remember that your job is to get the best answer, not give the best one you have
While everyone has the right to have questions and theories, only believable people have the right to have an opinion
Never make an important decision without asking three are believable people
- Understand, visualize and assess their reasoning to see if it makes sense to you
The best choices are the ones with more pros than cons, not those that never have cons
- Watch out for people who tend to argue against something because they can find something wrong with it weighing all the pros and cons. Such people tend to be poor decision makers.