What informs the millions of decisions you will make in your lifetime? Are you so clear on your beliefs that decision making comes quickly and easily to you — and with great success?
Ultimately, the quality of your decisions will reflect the quality of your life, and in order to make high-quality decisions time and again, it’s crucial to have a reservoir of principles to draw upon. If you don’t have principles to guide you in your pursuits, you will eventually become lost. You’ll be navigating too much clutter; you’ll be faced with too many choices, and you may not always make the best decisions.
Principles are fundamental truths that serve as the foundations for behavior that gets you what you want out of life. Think of them as rules or beliefs which govern your behaviors. The way we utilize them at Studio/E is by creating principles in moments of reflection – when we determine what works, what doesn’t, and what we believe to be true. Once we create these boundaries, they are there for us to draw upon while out exploring the unknown. They serve as truths and help us make better decisions when we need help the most.
Named by TIME Magazine as one of the 100 most influential people, Ray Dalio compiled hundreds of principles he follows for both life and work in his aptly named book, Principles. These are the principles Dalio has drawn upon while building and growing Bridgewater Associates – the investment firm Fortune magazine calls the fifth most important private company in the U.S. – and he credits these principles as the reasons behind his success.
“Over the course of my lifetime,” Dalio says in this animated video, “the most valuable things I’ve learned were the results of mistakes I reflected on to help form principles so I wouldn’t make the same mistakes again.” And that’s what his book is – hundreds of things he’s learned in the more than 40 years of operating his successful business. He introduces the book by saying, “Before I begin telling you what I think, I want to establish that I’m a ‘dumb shit’ who doesn’t know much relative to what I need to know.” Dalio is adamant about this notion that his principles are to thank for his success — not his smarts.
Being principled means consistently operating within principles which can be clearly explained. The ability to communicate your principles is important, as it provides others (colleagues, partners, family, etc.) with a better understanding of how and why you make the decisions you do.
Principles can bind us together, but they can also divide us. Your principles might be different than Dalio’s, and that’s a good thing – it’s what makes our world interesting. Whether you agree with a principle or not, there is wisdom to be found in it, which makes Dalio’s collection of learnings so compelling.
In his newest book, Stillness is the Key, author bestselling author Ryan Holiday says, “Each of us must cultivate a moral code, a higher standard that we love almost more than life itself. Each of us must sit down and ask: What’s important to me? What would I rather die for than betray? How am I going to live and why?”
Holiday calls it virtue, Dalio calls it principles. What “it” is is a series of standards upon which you base your behaviors and actions in order to remain true to yourself and what you believe; what “it” is is a way to streamline your decision making.
Among the principles in the nearly 600-page book referred to above, here are some of the many around which we at Studio/E find alignment:
(Note: Dalio’s principles are broken into higher-level, mid-level, and sub-principles, designated by two sets of numbers and one set of letters. We include them below for those who are interested in learning more about them in his book.)
Don’t get hung up on your views of how things “should” be because you will miss out on learning how they really are.
We need to be analytical rather than emotional in order to get good results. Dalio gives the example of watching a pack of hyenas capture a young wildebeest in Africa. What he saw was horrible. But then he asked himself, was it horrible because of his bias, or was it wonderful because nature knows better? He realized then that nature optimizes for the whole, not the individual, and though it was difficult to witness, what he saw was just nature at work. (Life Principle 1.4.a.)
Evolve or die.
You will either learn from your mistakes and continue on with more knowledge, or you won’t, and you will fail. This evolutionary cycle relates to companies as much as it does to humans. (Life Principle 1.4.d.)
Realize that you are simultaneously everything and nothing — and decide what you want to be.
Our lifetimes are only about 1/3,000th of humanity’s existence, and humanity’s existence is only 1/20,000th of Earth’s existence. No matter what we do in our lifetimes, it will be relatively insignificant. That said, the little things we do – the little progress we make – will, over time, contribute to the evolution of the universe. (Life Principle 1.5.d.)
Practice radical open-mindedness.
This is motivated by the worry that you may not be seeing your choices optimally. If you recognize your blind spots (we all have them) and consider the possibility that others may see something better than you do, you’ll be more likely to make good decisions. (Life Principle 3.2.) (Side note: This is why being a part of a learning community – a diverse group of individuals from whom you can learn – is so beneficial!)
Be an imperfectionist.
Perfectionists waste too much time on tiny things at the expense of things that really matter. Figure out what matters, focus on it, and forget the rest. (Dalio says there are just five to ten important factors to consider when making decisions. And even so, studying the important things past a certain point should be limited.) (Life Principle 5.3.d.)
Have integrity and demand it from others.
People who are one way on the inside and another way on the outside lack integrity and often lose touch with their values. When you align what you say with what you think and what you think with what you feel, you’ll be much happier and more successful. Plus, having nothing to hide builds trust. (Work Principle 1.2.)
Be radically transparent.
Giving people the right to see things for themselves is better than forcing them to rely on information passed down (and processed for them) by others. Radical transparency forces issues to the surface and allows the organization to draw on the insights of everyone to solve them. (Work Principle 1.4.)
Create a culture in which it is okay to make mistakes and unacceptable not to learn from them.
We all make mistakes, but not everybody learns from them. When you create an environment in which it’s okay to make mistakes so long as others can learn from them, Dalio says you’ll see rapid progress and fewer significant mistakes. (Work Principle 3).
Be weak and strong at the same time.
Asking questions to gain perspective is a strong move often misperceived as a weakness. Seek advice of those who are wiser than you and let those who are better than you take the lead. (Work Principle 10.10.a.)
Remember that almost everything will take more time and cost more money than you expect.
It’s like contract work around your house — barely anything goes according to plan. Based on his experience, Dalio assumes things will take one and a half times as long and cost one and a half times as much. (Work Principle 13.11.)
Not every principle Dalio included in this book will work for you (nor should they). The purpose of the book, and therefore this article, is to:
- Make the point that you can achieve high levels of success by establishing principles you believe to be true, will operate within, and communicate.
- Provide you with a starting point so you can begin thinking about your own principles upon which you base your behavior.
Ray Dalio claims to have reached his billionaire status by following his principles. You may not be after a billion dollars, but you’re likely interested in success. Creating and communicating your own set of principles is a smart and proven way to achieve the outcomes you want by making better decisions, faster.
Want even more content? Take a look at our video library. We have a lot of great interviews with Studio/E heroes, many of which might inspire your own principles.