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Book Review: Principles by Ray Dalio

I received a gift of a book recently – Ray Dalio’s Principles. Funny, though, as my bud handed it to me realizing that it was a hefty book, and he knew how much I enjoyed audiobooks. However, I do love a good physical book so I can take notes on or re-read/ review. (Kindle e-books included.) Well, Jeremy, I listened to the e-book for this one, too. ?But are taking notes and reviewing the hardback you gifted.

I enjoyed Ray’s book based on his leadership and the principles he instilled while leading his company Bridgewater from the ground to a 1,600+ behemoth in the financial world. What was inspiring to read, too, was how he initially co-founded the company but early on, had to let everyone go including his co-founder who left as not much money was coming in. Ray had to rebuild his team from just one (himself) to the company it is today.
The book is can be broken up into a few parts – his and Bridgewater’s story before diving into the personal and business principles. There are hundreds of principles that grounds the company in its business dealings, and that enables it to continue to thrive.
In any case, here are a few of my take-aways:
  • Like Patrick Lencioni in his book The Advantage, Ray finds personal assessments to be highly informative. Each assessment provides a view into the strengths and weaknesses of team members, which enables Ray’s team to build teams to deliver the best outcomes. He takes a lot of the personal and politics out of the equation and leans into data.
  • Ray is a fan of leveraging artificial intelligence. Really, he’s a fan of blending both computer systems with human intelligence and interactions. He started building his forecasting and analytics systems from the start – continuously training it to perfect forecasting. He’s able to leverage opposing outcomes from either “system” to dive into what could be missing or inaccurate. Meanwhile, agreeing results from both systems gives high confidence of known outcomes.
  • One of the biggest drivers of Ray and Bridgewater’s success is the idea of radical transparency. This means that personal assessments are completely out in the open so that team members understand how each other acts and works. Transparency enables teams to make mistakes, but own up to them so the rest of the team can learn and prevent future similar mistakes.
  • Meritocracy over autocracy for Bridgewater. Here, all associates at Bridgewater has the ability to challenge authority as long as there is clear merit in the person and the process. This is also where Ray leans into his belief that credence should be given to those who have demonstrated success in at least three occasions of some task/ venture. I touched on this in one of my previous posts in how this affects how I feel in my own ability to coach. But thinking about this idea, Ray has also only had “one” entrepreneurial/ business success (with Bridgewater)… not three. ?

There are many, many principles in the book (just as the title implies). It’s best not to try to adhere to all of the principles from the get go. Heck, it may not make sense to adopt any of the principles. It’s important realize whatever principles make sense (for me, you, whoever). However, it’s a constant practice to not only align myself to my principles, but also ensuring a company is aligned. And much like Bridgewater, if some principle should be rescinded or updated, it’s all possible as long as there is merit and transparency to the process.

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Being Cautious and Re-Orienting When Credibility is Limited

I’m listening to Ray Dalio’s book Principles. At whatever page I’m on, he talks about being open while also being persistent. His point revolves around the principle for always learning. To learn, people need to be open to listening. And yet, people are quick to dig into their own ideas, even if they haven’t showcased success – myself included.
Ray believes successful leaders should be able to showcase at least three instances of such in some area.
It dawns on me on this site that I espouse a lot about entrepreneurship without several successes – if we classify a liquidity event as success (e.g. stock offering, being acquired). That could continue to promote the idea that success only comes from a liquidity event which is not true. From this standpoint, should readers even value what I have to say? That’s a humbling question.
Though, Ray describes the value inexperience brings with it including new, outside perspective. He also talks about gaining buy-in from others with experience like an “influential committee”. Gain the support of those with the credibility or cite sources with credibility to bring credibility to the inexperienced.
I form my own thoughts, while oftentimes, cite or bring in others to provide credibility because I need it. I don’t have the CV to persuade without.
This brings two critical thoughts:
  • I must be careful in how I guide and advise others. I can speak of my experiences and what I’ve learned. However, I should be wary of how I guide others towards whatever their ideas of success are if I do not have the requisite experience to do so.
  • Seeking a “win” is paramount to me. Then, I need to seek my next win. I am not in the upper echelons of successful leaders right now because I don’t deserve to be. Oh, but I want to be in the group who helps architect the future. But how can I join the group if I don’t have the credentials to be amongst them?

Especially the last point, it’s causing me to reflect on my path of seeking my next entrepreneurial journey. Should I continue seeking very early-stage startups (or my own) knowing there’s such a great chance of failure? More failures only mean I become successful at failure, right?

Or, should I join a venture that is beyond early-stage where I can learn scale and gain mastery?
I’m thinking. Should I lean one way or the other? In short: I’m not there yet.
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