If you wanted to learn the principles for building a successful business, Ray Dalio would be one of the first business leaders you would want to ask. He has built the world’s largest Hedge fund from scratch and became one of the world most wealthy business leaders in the process. In his book “Principles” he lays out exactly how he did it and the truth is, it isn’t that complicated providing your guiding principles are right. There are some consistent values that make sense and are required in order to ensure that your business thrives. So, what can we learn from this book?
It’s important to choose the right goal and embrace continuous improvement
Everything begins with the goal you choose. I could not help but notice, when Ray Dalio speaks about identifying a goal, there were many similarities with Simon Sinek’s Start with Why. It all comes back to your purpose. Life is full of ups and downs and if you aren’t passionate about your reason for getting up in the morning, its very hard to push through the downs. But if you are incredibly passionate about what you are doing and why you are doing it, it becomes a lot easier to manage when times are tough. Another truth is that nearly anything is possible in life, but you can’t have it all. If you want to build a multi-billion-dollar business, its likely you are going to sacrifice time with your family or make other compromises. When you prioritise one thing, you are naturally excluding another. There are only a certain number of hours in the day, so it’s important that you choose wisely and align your goal with what you actually desire the most. Once you have decided on whatever that goal is, you need to dedicate yourself to becoming a master in that area. This means that you are constantly looking to improve, learn more and this process never stops. If you are not continually learning, you will never be able to master it. There are new developments all the time.
Radical truth and transparency is key
Ray Dalio is famous for his leadership style of extreme truth and transparency. His idea of radical truth is about making sure that important issues don’t remain hidden. This means that everyone is able to speak their mind and he has created an environment where this is done freely and without consequence. This kind of transparency is considered a safeguard against poor decisions, since co-workers will constantly be exchanging criticisms, making improvements, and catching mistakes before they happen. This is of course very different from the typical corporate culture where many avoid highlighting problems. But this is why Ray Dalio has built the number 1 firm in the world. This radical truth extends to all levels in the organisation. In most firms, if they were considering a sale of one of its divisions, things may often be kept quiet for confidential reasons. In Ray Dalio’s business when this type of thing happened, there was always full transparency. This means that there is total trust within the organisation, no one is hiding anything, and everyone is always honest with each other. This does cause disagreement, as it is natural for people to disagree on various issues, but by the disagreement being open, it allows resolutions to be sought and a clear direction forward forged.
Build organizations from the top down
As you move toward your goals, it’s only a matter of time before problems start to arise. This is natural. If you hope to turn problems into advantages, you need to design your business so that problems get noticed and solutions get implemented as quickly as possible. This means that its incredibly important to have a strong leadership team. If you have a weak leadership team that hide problems and try to save face to avoid looking bad, problems will fester and hurt your organisation. When you are building a building, your foundation must be strong, but within a business, your leadership team must be strong. Its important to build from the top down. If you have great people working under poor leaders, more often than not they will end up leaving as they will be seen as a threat instead of an asset. Its vital that every manager in your organisation is trustworthy and has high standards. If they do not have the right character, it does not matter how good they are, they should not be a manager or leader within your organisation.
*If you are looking to succeed in your career then you should check out my new international bestselling book – The Employee Handbook: A Practical Guide for Managing Your Career. You can pick up a copy by clicking here. Alternatively, you can search for the book on Amazon UK, US, Germany, Spain, France, Italy, Japan, Canada or Australia to order a copy. If you are in another location, Amazon UK will be able to ship globally to you. It is also available as an e-book via Amazon Kindle.