My thoughts on Principles by Ray Dalio

After listening to Ray Dalio interview Prime Minister Narendra Modi in Davos, I bought his book 'Principles' and it had been languishing deep below in my Kindle collection. I was not sure what its contents would be and it took me some time to get over the inertia. In November, I finished the book and must say I thoroughly enjoyed it.?

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I did not realize – and it was quite silly of me that I didn’t – Ray has not just written what ‘should be’ he has written what he truly believes in, he actually walks the talk on 'principles'.?

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The book is all about the guiding factors basis which Ray Dalio lives his life, both on personal and professional fronts. The 'principles' in the book have been divided as generic, applicable to a person, and as specific to work – though I believe some of the latter could be relevant in any group setting.

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I took extensive notes on the principles as I consumed the book, but neither do I aim to list out all of those nor critique them in detail. I don't want to make this into a book review either. However, I would like to point out that the book resonated with me, and I deeply believe in many of the principles. I endeavour to call out some of those.

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The first principle: ‘Think for yourself: 1. What do you want? 2. What is true? 3. What are you going to do about it to achieve 1 in light of 2?’

Must confess, at first glance I wondered what was the big deal, but on the second reading, it surely set me thinking - what am I doing about it? Nothing! To answer the above and then act on it is not easy at all and we must contemplate this, it’s something I have been doing for the past few months and I am yet not fully sorted.

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In part I, mention of time being like a river where we are going to have encounters which cannot do anything about except ensure we handle them in the best possible way, could not have been truer. While this is not easy, I guess I have handled many a situation with the same thought process. Over the past few months, things have not panned out exactly how I wanted them to be, but the point above, keeps coming back to me and helps me regain my poise. This aspect is no different from the Indian philosophy I practice or what Victor Frankl says in his book – Man’s Search for Meaning.

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The first big principle - embrace reality and deal with it. I have dealt with it in some of the big things that affected me; in other cases, I could have handled these better. This must be a guiding principle daily!

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The point where Dalio says - instead of the pain in the crash focus on the pleasure in learning from the mistake - may sound difficult, but when put into practice, it makes one better and sharper – remember there is nothing called sharp enough!

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Continuing from above, the principle of being a hyper-realist is non-negotiable in the world we live in, and hence understanding, accepting, and working with reality is essential.

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The proposition – ‘Dreams + reality + determination = success’ - talks about howsoever big we may dream; it is important to know the reality and then go about achieving the goals. How can I forget Lord Ganesha here! In all his forms, his one leg rests firmly on the ground always. Not theorising or sermonising, but I feel that knowing the environment and circumstances we operate in is critical in channelling our dreams. As a related principle – ‘Pain + reflection = progress’ - is quite a pithy way to summarise how we need to learn from the mistakes/challenges we face to be on the right path of development.

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Being radically open-minded and transparent is one principle that I truly believe in and abide by in all spheres of life. The ability to take feedback from all corners and questioning oneself for actions is surely a way to be truthful to oneself. It is clear that ego and blind spots come in the way of open mindedness, and it is essential to confront this head-on – using the Johari model, I keep saying one needs to be an open book as much as possible and endeavour to minimize the blind spot. Radical transparency is about sharing details with all stakeholders without holding back information – of course, respecting confidentiality.

Also, many a time people may not like what I say or think I am too direct or “too objective for one’s comfort”, but I guess it puts me at ease that there is nothing to hide.??

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The principle, ‘Evolving is life’s greatest accomplishment and reward’ is a brilliant way to put forth the journey we should undertake and the principle, ‘Own your outcomes (life does not give a damn about what you like)’ will guide as to how we can deal with situations that are not always as per our wishes.

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Over the past few years, I have stopped believing in the SWOT model and feel the SOAR approach is the right way to move forward positively. Therefore, the principle, ‘Weaknesses do not matter if one finds solutions’, resonated with me a lot.

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As I kept going through one pearl of wisdom to another, I came across one of the most profound principles: ‘Goals are not desires. And desires will stop us from getting to goals’ - the message could not have been delivered more succinctly and it is etched in my memory.?

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I keep saying that heterogeneity is what makes the world an interesting and nice place and looking for a single viewpoint – ours – is probably not the best thing to do. Therefore, 'recognizing the perspective from seeing through other people’s eyes and so suspending one’s own judgement for a while' is an essential component of being open-minded and taking as many perspectives as possible as we evolve. It is indeed worth ‘looking for the best answer and not the best answer one can think of on their own’.?

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On verifying one’s views, the following two principles are something that I surely follow. While I may have a few people who fall in the category, but I do, for important matters, ‘triangulate my views with believable people who are willing to disagree'. This not only helps get the right feedback but also helps throw up new perspectives. Further, when one would like to be data-oriented for making any decision, then logically, one would be “evidence-based” and, in a sense, would also use metrics to measure one.

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How many times have we seen that the decisions we take – be it in the personal or professional sphere – go awry because we did not 'recognize that the biggest threat to decision-making is harmful emotions'? While it may not be easy to practise, if one were to objectively look at situations, it would help reduce risks. Further, even if the decisions were to go bad, it would be easy to understand the reason for it.?

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Many principles have been categorized for the work front, and the first one that I truly believe in and cherish is 'Believability - weigh your decision-making'. At first, I did not get the brilliance of the principle – whether autocracy or democracy, either brings in inferior outcomes in eras of decision-making. It should be done through idea-based meritocracy through a believability weight, and this will bring out the best in folks where the index is the highest. Must say, I have been following this approach as a default.

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A few other work related principles that are worth imbibing and following: 'Create an environment where everyone has the right to understand what makes sense and no one has the right to hold a critical opinion without speaking up - speak up, own it, or get out' – the responsibility on making an organization tick well is on both the employer (management) as well as the employees, and this is the only way we will bring in a well-oiled machine where noise levels are minimized; 'be extremely open; do not be naive about dishonesty' – the aspect of being radically transparent is all- encompassing and with that comes in the point that where one finds people not being honest, then it should be shown to the world that there is zero tolerance to such behaviours. I believe it is easy to follow these principles and it will take trust to the next level; 'Get and stay in sync;' 'agree that there will be disagreements; know how to get in sync and disagree well; be open-minded and assertive at the same time' – there must be an alignment within the organization, however hard that may be to achieve, and irrespective of levels it is important to voice not only opinions but also receive feedback. It may be truer when dealing with superiors where if one disagrees with their views, it is fine to call them out politely and firmly rather than sulking and accepting what is not right.??

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One may have been told many Dohas (couplets) about ‘not to get sucked into doing the subordinate’s job', which would clearly indicate that the machine is not designed well, and for folks who are at a leadership level while it may be tempting/or forceful to do stuff on their own, the focus should be on setting the right design, processes, people in place – empower and guide teams to catch fish rather than give them fish to eat.?

And, finally, when I look at the principle, 'Pay for the person and not the job', I wonder why I am still not being paid a million dollars. One day I guess I will be paid for who I am!

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Beyond the principles put forth by Ray Dalio in the book, a few more things caught my interest. First, this book was written in 2017 and it is fascinating that even then he could predict that artificial intelligence would make a big difference – of course what AI meant could always be debated. He emphasized meditation had a big impact on him; I try to meditate for a minimum of 20 minutes daily and it surely brings in a calmness, making it easier to handle tough situations.

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This is not a book review really, but rather my views about a few highly distilled thoughts that will help one have better perspectives. While many more principles are worth delving deeper into, the best way is to pick the book and assimilate whatever one feels relevant.?