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LIFE PRINCIPLES by Ray Dalio, WORK PRINCIPLES by Ray Dalio - Coggle Diagram
LIFE PRINCIPLES by Ray Dalio
1. Embrace Reality and Deal With It
1.1 Be a hyperrealist: Dreams + Reality + Determination = A Successful Life
1.2 Truth (an accurate understanding of reality) is the essential foundation for any good outcome
1.3 Be radically open-minded and radically transparent
1.4 Look to nature to learn how reality works
1.5 Evolving is life's greatest accomplishment and its greatest reward
1.6 Understand nature's practical lessons
1.7 Pain + Reflection = Progress
1.8 Weigh 2nd- and 3rd-order consequences
1.9 Own your outcomes
1.10 Look at the machine from the higher level
2. Use the 5-Step Process to Get What You Want Out of Life
2.1 Have clear goals
2.2 Identify and don't tolerate problems
2.3 Diagnose problems to get at their root causes
2.4 Design a plan
2.5 Push through to completion
2.6 Remember that weaknesses don't matter if you find solution
2.7 Understand yoiur own and others' mental maps and humility
3. Be Radially Open-Minded
3.1 Recognise your 2 barriers: Ego & blind spots
3.2 Practice radial poen-mindedness
3.3 Appreciate the art of thoughtful disagreement
3.4 Triangulate your view with believable people who are willing to disagree
3.5 Recognise the signs of closed-mindedness and open-mindedness that you should watch out for
3.6 Understand how you can become radically open-minded
4. Understand That People Are Wired Very Differently
4.1 Understand the power that comes from knowing how you and others are wired
4.2 Meaningful work and meaningful relationships aren't just nice things we chose for ourselves - they are genetically programmed into us
4.3 Understand the great brain battles and how to control them to get what "you" want
4.4 Find out what you and others are like
4.5 Getting the right people in the right roles in support of your goal is the key to succeeding at whater you choose to accomplish
5. Learn How to Make Decisions Effectively
5.1 Recognise that 1) the biggest threat to good decision making is harmful emotions, and 2) decision making is a 2-step process (first learning, then deciding)
5.2 Synthesize the situation at hand: Have a higher-level perspective
5.3 Synthesie the situation through time: Be imprecise, be an imperfectionist, remember 80/20
5.4 Navigate levels effectively eg. I want meaningful work full of learning -> I want to be a doctor -> I need to go to med school -> I need to get good grades -> I need to stay home tonight and study
5.5 Logic, reason and common sense are your best tools for synthesizing reality and understanding what to do about it
5.6 Make your decisions as expected value calculations
5.7 Prioritise by weighing the value of additional information against the cost of not deciding
5.8 Simplify!
5.9 Use principles
5.10 Believability weight your decision making
5.11 Convert your principles into algorithms and have the computer make decisions alongside you
5.12 Be cautions about trusting AI without having deep understnading
WORK PRINCIPLES by Ray Dalio
1. Trust in Radical Truth & Radical Transparency
1.1 Realise that you have nothing to fear from knowing the truth
1.2 Have integrity and demand it from others
1.3 Create an environment in which 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
1.4 Be radically transparent
1.5 Meaningful relationships and meaningful work are mutually reinforcing, especially when supported by radical ruth and radical transparency
2. Cultivate Meaningful Work & Meaningful Relationships
2.1 Be loyal to the common mission and not to anyone who is not operating consistently with it
2.2 Be crystal clear on what the deal is
2.4 Recognise that most people will pretend to operate in your interest while operating in their own
2.3 Recognise that the size of the organisation can pose a threat to meaningful relationships
2.5 Treasure honourable people who are capable and will treat you well even when you're not looking
3. Create a Culture in Which It Is Okay to Make Mistakes and Unacceptable Not to Learn from Them
3.1 Recognise that mistakes are a natural part of the evolutionary process
3.2 Don't worry about looking good - worry about achieving your goals
3.3 Observe the patterns of mistakes to see if they are products of weaknesses
3.4 Remember to reflect when you experience pain
3.5 Know what types of mistakes are acceptable and what types are unacceptable, and don't allow the people who work for you to make the unacceptable ones
4. Get and Stay in Sync
4.1 Recognise that conflicts are essential for great relationships because they are how people determine whether their principles are aligned and resolve their differences
4.2 Know how to get in sync and disagree well
4.3 Be open-minded and assertive at the same time
4.4 If it is your meeting to run, manage the conversation
4.5 Great collaboration feels like playing jazz (1+1=3; 3 to 5 > 20)
4.6 When you have alignment, cherish it
4.7 If you find you can't reconcile major differences - especially in values - consider whether the relationship is worth preserving
5. Believability Weight Your Decision Making
5.1 Recognise that having an effective idea meritocracy requires that you understand the merit of each person's ideas
5.2 Find the most believe people possible who disagree with you and try to understand their reasoning
5.3 Think about whether you are playing the role of a teacher, a student, or a peer and whether you should be teaching, asking questions, or debating
5.4 Understand how people came by their opinions
5.5 Disagreeing must be done effectively
5.6 Reocgnise that everyone has the right and responsibility to try to make sense of important things
5.7 Pay more attention to whether the decision-making system is fair than whether you get your way
6. Recognise How to Get Beyond Disagreements
6.1 Remember: Principles can't be ignored by mutual agreement
6.2 Make sure people dont' confuse the right to complain, give advice and openly debate with the right to make decisions
6.3 Don't leave important conflicts unresolved
6.4 Once a decision is made, everyone should get behind it even though individuals may still disagree
6.5 Remember that if the idea meritocracy comes into conflict with the wellbeing of the organisation, it will inevitably suffer
6.6 Recognise that if people who have the power don't want to operate by principles, the principled way of operating will fail
7. Remember That the WHO is More Important Than the WHAT
7.1 Recognise that the most important decision for you to make is who you choose as your Responsible Parties
7.2 Know that the ultimate Responsible Party will be the person who bears the consequences of what is done
7.3 Remember the force behind the thing
8. Hire Right, Because the Penalties for Hiring Wrong Are Huge
8.1 Match the person to the design
8.2 Remember that people are built very differently and that different ways of seeing and thinking make people suitable for different jobs
8.3 Think of your teams the way that sports managers do: No one person possesses everything required to produce success, yet everyone must excel
8.4 Pay attention to people's track records
8.5 Don't hire people just to fit the first job they do - hire people you want to share your life with
8.6 When considering compensation, provide both stability and opportunity
8.7 Remember that great partnerships, consideration and generosity are more important than money
8.8 Great people are hard to find, so make sure you think about how to keep them
9. Constantly Train, Test, Evaluate, and Sort People
9.1 Understand that you and the people you manage will go through a process of personal evolution
9.2 Provide constant feedback
9.3 Evaluate accurately, not kindly
9.4 Recognise that tough love is both the hardest and the most important type of love to give (because it is so rarely welcomed)
9.5 Don't hide your observations about people
9.6 Make the process of learning what someone is like open, evolutionary and iterative
10. Manage as Someone Operating a Machine to Achieve a Goal
10.1 Look down on your machine and yourself within it from the higher level
10.2 Remember that every case you deal with, your approach should have 2 purposes: 1) To move you closer to your goal and 2) To train and test your machine (ie. your people & your design)
10.3 Understand the differences between managing, micromanaging, and not managing
10.4 Know what your people are like and what makes them tick, because your people are your most important resource
10.5 Clearly assign responsibilities
10.6 Probe deep and hard to learn what you cxan expect from your machine
10.7 Think like an owner, and expect the people you work with to do the same
10.8 Recognise and deal with the key-man risk
10.9 Don't treat everyone the same - treat them appropriately
10.10 Know that great leadership is generally not what it's made out to be
10.11 Hold yourself and your people accountable and appreciate them for holding you accountable
10.12 Communicate the plan clearly and have clear metrics conveying whether you are progressing according to it
10.13 Escalate when you can't adequately handle your responsibilities and make sure that the people who work for you are proactive about doing the same
11. Perceive and Don't Toerlate Problems
11.1 If you're not worried, you need to worry - and if you're worried, you don't need to worry
11.2 Design and oversee a machine to perceive whether things are good enough or not good enough, or do it yourself
11.3 Be specific about problems; Don't start with generatlisations
11.4 Don't be afraid to fix the difficult things
12. Diagnose Problems to Get at Their Root Causes
12.1 To diagnose well, ask the following questions: 1) Is the outcome good or bad? 2) Who is responsible for the outcome? 3) If the outcome is bad, is the Responsible Party incapable and/or is the design bad?
12.2 Maintain an emerging synthesis by diagnosing continuously
12.3 Keep in mind that diagnoses should produce outcomes
12.4 Use the following "drill-down" technique to gain an 80/20 understanding of a department that is having problems
5 Understanding the diagnosis is foundational to both progress and quality relationships
13. Design Improvements to Your Machine to Get Around Your Problems
13.1 Build your machine
13.2 Systemise your principles and how they will be implemented
13.3 Remember that a good plan should resemble a movie script
13.4 Recognise that design is an iterative process. Between a bad "now" and a good "then" is a "working through it" period
13.5 Build the organisation around goals rather than tasks
13.6 Create an organisational chart to look like a pyramid, with straight lines down that don't cross
13.7 Create guardrails when needed - and remember it's better not to guardrail at all
13.8 Keep your strategic vision the same while making appropriate tactical changes as circumstances dictate
13.9 Have good controls so that you ar enot exposed to the dishonesty of others
13.10 Have the clearest possible reporting lines and delineations of responsibilities
13.11 Remember that almost everything will take more time and cost more money than you expect
14 Do What You Set Out To Do
14.1 Work for goals that you and your organisation are excited about and think about how your tasks connect to those goals
14.2 Recognise that everyhing has too much to do
14.3 Use checklists
14.4 Allow time for rest and renovation
14.5 Ring the bell
15 Use Tools and Protocols to Shape How Work is Done
15.1 Having systemised principles embedded in tools is especially valuable for an idea meritocracy
16. Don't Overlook Governance
16.1 To be successful, all organisations must have checks and balances
16.2 Remember that in an idea meritocracy, a single CEO is not as good as a great group of leaders
16.3 No governance sytem of princples, rules, and checks and balances can substitute for a great partnership