In his self-published paper entitled Principles, Ray Dalio talked about his beliefs and philosophies that made him effective in making his personal and business decisions. His holistic goal setting was succinctly presented in the document. The most important part of his publication was found in the first three parts, a) The Importance of Principles, b) My most Fundamental Life Principles, and c) My Management Principles.
The founder of the Bridgewater Associates started chapter one by discussing about principles and why it is important. He suggested that in the absence of firm principles, a person is likely to react carelessly in situations that come across without thoughtfully and critically thinking about its impact on one’s overall values and objectives. There are many factors that help shaped a person’s principle, but Dalio implied that it is important to adopt principles that are consistent with one’s true values, as he claimed that: “Your principles need to reflect the values you really believe in”(Dalio, 7).
In the second chapter, Dalio elaborated about his childhood and much of how he went through life as a young man. It was through all the different circumstances in his life that he learned life’s lessons. He further described his fundamental principles that he developed during his formative years and the lessons learned when he started Bridegewater Associates. His most fundamental principle is the ‘truth’ which he suggested to be “an accurate understanding of reality- is the essential foundation for producing good outcomes”(Dalio, 15). His other principles included his belief in evolution, pursuing self-interest and the belief on the innate characteristics of nature, which are of being good and bad, depending on the circumstance they are used to. While he surmised that people have their strengths and weaknesses, he claimed that what differentiates success and failure is the ability of an individual to learn and adapt new things.
The third chapter of the paper revealed the management principles which, according to Dalio, stemmed from the principles he believed throughout his life. One of his management principles is ‘to get the culture right.’ Under this principle, he exhorts the need for people to trust in the truth, and a belief in a system where people adapt a culture of transparency. Another principle is ‘to get the people right’, where he pressed the concept that great people operating in a great culture almost always leads to good outcomes. He also believed in the management concept of perceiving, diagnosing and solving problems effectively. These aspects are critical because managers must design the system in a way that they are directed towards reaching organizational goals. Dalio also stressed about the need to make decisions effectively. In this principle, he suggested that managers should not be perfectionists, and that they have to know how to “deal with not knowing” (Dalio, 51), because it is in fact better than knowing.
What Dalio presented in his Principles are considered as an almost universal approach in dealing with personal and management settings. While most of the ideas were moulded from his own perspective and observation, the fact that he was able to manage Bridgewater Associates through the years leads to the convincing effectiveness of these management concepts. What struck me to be the negative aspect of Dalio’s management principles was his claim about “expecting from your machine”(Dalio, 47). It gives the implication about perceiving people as machines that perform as expected. While treating people with transparency and openness is most welcome, referring to them as ‘machines’ is just off the hook.
Works Cited
Dalio, R. (2011). Principles
