Ray Dalio came from humble beginnings before he founded the investment management firm Bridgewater Associates out of his apartment in 1975. The firm grew to become the largest hedge fund in the world in 2005, with assets over $160 billion dollars as of late 2017.
In his book “Principals: Life and Work,” Dalio shares many of the concepts and foundations he has used to manage his firm and grow it into one of the most respected on Wall Street.
This book is broken into three sections. Part one discusses some of Dalio’s background and how he arrived at the philosophy he uses to govern his life and firm. Part two delves into life principals, and part three focuses on work principals.
The philosophies embedded in the first two principals permeate both Dalio’s outlook on life and management style and serve as a springboard for his work principals. The book then offers practical lessons built around his cornerstones of radical truth and radical transparency.
Trust in Radical Truth and Radical Transparency
Dalio believes that “you have nothing to fear from knowing the truth,” and writes about having integrity and demanding it of others. This may seem commonplace, but for several pages he delves into the importance of this issue and how it is a foundation for any successful organization. He even brokered his own equation to describe it:
Idea Meritocracy = Radical Truth + Radical Transparency + Believability-Weighted Decision Making
Dalio delves into how this equation came to be and how it has underpinned the many successes of the firm. He reviews the many mistakes he has made and how he learned from them along the way.
“For any group or organization to function well, its work principals must be aligned with its members’ life principals.”
The above quote is self-explanatory yet illuminating, and for me, was the point in the book where Dalio’s philosophy began to take shape.
I generally do not gravitate to books like this—I find it almost comical to watch the wealthy elite find yet another platform to gather eyeballs. However, I found this book extremely insightful, well put together, and rich with dozens of ideas that could help a manager shape the directionality of their business and create healthier work environments for both themselves and their employees. This in turn leads to happiness and a richer life experience. As many of our clients are small business owners themselves, this book would be highly recommended.
Accentuate the positive, redirect the negative
Next month, we invite you to read along with CWA Partner Dan Wicker as he picks up Ken Blanchard’s, Whale Done!: The Power of Positive Relationships. In this book, top business consultant Blanchard, alongside his co-authors from SeaWorld, explain that both whales and people perform better when you accentuate the positive. Whale Done! shares straightforward techniques to increase productivity at work and home by simply focusing on the positive and redirecting the negative.