Charles Wilson's Blog

Whenever I take long trip I try to bring a book to read. When I went to CppCon 2017 in September, I brought Ray Dalio‘s Principles. Ray founded the world’s largest hedge fund. His company Bridgewater, is the exemplar for his book. [29 April 2018 Note: I’d actually completed the book during that trip, but got distracted by other things. I let this linger for far too long.]

At this point, I could assert that having created an organization a large and successful as Bridgewater would be justification for following the methodology he espouses. After all, isn’t that what we do, chase success is search of our own? If your desire is to leverage Ray’s book for that, you’ve failed before you’ve even started.

The information you will find in Principles is slow burning. Everything about his methodology requires tremendous time, effort and attention to detail. Let’s look at how the book decomposes:

In the first part (of three), he gives his personal backstory. This takes about 120 pages of the 550 or so page book. That’s a lot of exposition for a book ostensibly about life and work being able to be systematized. Then again, this isn’t a “here’s a fish” kind of book. If someone is going to purport to present a set a principles leading to success, you need to establish that you actually have the chops. And those chops don’t come from those whose success is inherited or the result of random chance. As has been said in many forms, “you learn nothing from success, but you learn everything from failure.”

The second part (about 150 pages) is devoted to life principles. The takeaway here is that work success is an extension of who you are. Your work, as opposed to your job, is not a coat to be put on, like some bulwark against the financial storms of life. To many his life principles are quite Machiavellian. While having clear goals is the basis of any true achievement, and root causing problems and designing solutions around them are in service to that end; both not tolerating problems that stand in your way and doing what is necessary to achieve results fall into the ruthless bucket. In no way am I opposed to his principles. In fact, I wouldn’t have personally accepted his work principles had he not been ruthless in his personal ones.

The third part is the thing we came to see, it covers his work principles. Here again, we see the division into thirds. They are culture, people and organization.

In the area of culture, first and foremost are the dual concepts of radical truth and radical transparency. On this foundation is having meaningful work and relationships. Next, and where I’ve seen many companies fail miserably, the culture needs to accept mistakes but demand that people learn from them. Once things are spun up, you have to keep everyone in sync. This goes back to the ideas of radical truth and acceptance of mistakes.

On the people front, you must hire the right people. Hiring the wrong people will kill your company eventually. In that vein, who the people are (life principles) is more important that what they know. People with a good foundation can be built upon. Those without can’t. Finally, you must constantly refresh people’s skills. This rigorous regime of renewal is not something that everyone can embrace. When people don’t … well, we’re back to Machiavelli.

Lastly, he addresses the organization itself. In many ways, his approach to the organization is identical to that of a person. The same issues of goals, problem tolerance, evaluation and improvement apply. That may sound like I’m short changing that part of book, but given Ray’s premise that work is an extension of the self, it’s only natural that the organization is an extension of the people working there.

This book is one you will either embrace as an affirmation, or reject as too demanding. As to why I don’t believe that there’ll be any middle ground, the title says it all. You either see the material in the book as principles or you don’t.

I, for one, do.