CTech’s Book Review: Learning to embrace failure and use it as an opportunity to grow and improve

Title: Principles

Author: Ray Dalio

Format: Audiobook

Where: Home and Commute

Shelly Hod-Moyal. Photo: iAngels

Summary:

Ray Dalio writes his memoirs of his life, how he became successful and how he uses and adapts principles to life lessons. It is also part “how-to” guide about how he is a hyper-realist who is connected to what he calls the radical truth. He describes how he became successful, treating pain or internal conflicts as a cue and an opportunity to see things differently. He stresses that mistakes are natural and need to be reflected on, and understood as something we need to learn from and then apply those lessons to other things in our lives.

Important Themes:

Important themes in the book include a unique set of principles that Ray believes are the reasons for his success. He attributes his success, more to how he dealt with what he didn’t know - than what he did know.

Principles are the smart ways you devise to handle things that happen again and again and help to create practical lessons for life, management, investing, and economics. They are like life rules.

One of the important principles is to live a life with purpose. Throughout the book, he discusses the importance of meaningful work and meaningful relationships. Communication plays a key part in this, when people can speak openly, understand each other, and are accountable to each other, it allows them to be the best versions of themselves. Relationships are strengthened and people are drawn together when they experience challenging times or challenges at work. Ray believes that it is this self-reinforcing cycle that leads to success and allows one to “pursue more and more ambitious goals.”

At Bridgewater, Ray implemented an idea meritocracy - a system or process that is fair and ensures the best idea will win out. It starts, he says, with creating a strong foundation based on truthful and transparent communication (radical truth and radical transparency) and a democratic environment where people are invited to every meeting and encouraged to share their opinions and share or challenge ideas. This system recognizes the value and merit of each person’s ideas and allows people to work through their disagreements. Through this discussion process, together with diverse teams, the best decisions are made.

The company created a process to record all decisions that are made by using the Dot Collector App. The app actively measures the success or failure of each idea and uses that information to establish a track record of “believability” for the influencers of such decisions. Using the data points from the app, they developed a Baseball Card system for the employees detailing each individuals’ traits. These baseball cards, which are visible to the entire organization, include details of strengths and weaknesses with the purpose of getting the most out of the employees; not to highlight their flaws, but to help managers work around or with people’s personalities. Open access to all employees' experiences and track records is a way to establish believability that is objective and trusted by everyone.

Ray discusses the two biggest impediments to good decision making:

1. Ego - this is what prevents you from recognizing your weaknesses. Our need to be right is greater than our need to see what’s true. We are prone to become defensive when challenged, which leads us to make inferior decisions.

2. Blindspots - Things that you don’t see. In reality, no one person can see everything. Some people are better at seeing the bigger picture, some are more attentive to details, some have higher IQ and some have higher EQ. In order to overcome Ray’s blind spots, he has surrounded himself with many smart people who think and see things differently.

The more capable you are, the greater the challenges that you will take on. For anyone who wants to be successful, it is important to know your goals and really run after them. It doesn’t get easier and you will always encounter obstacles along the way.

What I've Learned:

I’ve learned to embrace failure and use it as an opportunity to grow and improve. I ask for feedback often with the aim of raising my awareness and do my best not to get defensive. If you are the type of person that gets defensive and is righteous, people will avoid telling you what they really think and then you won’t have opportunities to discover your blindspots and deal with them. I constantly work on improving my communication skills, which I consider today as the most important skill - both in business and in my personal life. The better I get at this, the happier I am.

Critique:

While the culture and company that Ray has built is profound and there are many leadership examples that can be learned from, brutal honesty is not a leadership style I adopted. From my personal experience, being brutally honest all the time, with everyone and in front of everyone often does the opposite of getting people to open up and be the best versions of themselves. Most people are looking for constructive feedback, rather than being put on display for a dose of brutal honesty. Often you can get much more out of people with a more holistic and gentle approach by highlighting their strengths and things you appreciate as well when giving feedback.

Who Should Read This Book:

Everyone. It is interesting, inspiring, and very relevant to anyone looking to be successful in life, especially entrepreneurs starting their journey.