Principles by Ray Dalio is a great book covering many topics from entrepreneurship, organizational strategy, problem-solving, and learning. Ray Dalio is a fortune 100 CEO, and he shares in his book what he calls are his principles — general concepts of thinking that can be reapplied to one's own life and work. Thus, the book is very fragmented, but also very dense, and I would recommend you to read this book if you are somewhat interested in entrepreneurship.
One of the most interesting concepts I read is the one of the "machine". The "machine" describes a systemic and optimized way to pursue goals by identifying and resolving issues and learning from mistakes. Its power is that it applies to both organizations and individuals while being able to evolve and adapt to the context it is used in. The process works as such:
graph LR;
Goals-->Machine-->Results; Results-->Machine; Results-->Goals;- First, there is the definition of clear goals.
- Then, a strategy is used to get to these goals (the machine) and produces results.
- These results are compared to the initial goals, and it is used as a feedback loop to modify the design/strategy of the machine.
Iteratively, the design/strategy put in place in order to reach the goals improves/evolves and the process is optimized. Now let's dive into the specific design of the "machine" part. It can be summarized as such:
graph TD;
subgraph Machine
A[Goals]-->B[Problem identification]-->C[Problem resolution]-->D[Planning]-->E[Tasks/Action];
end- The well-defined input goals are used to orient the vision.
- All (potential) problems are identified, without tolerance.
- Each problem is resolved in advance.
- A plan that takes into account the problems is designed in order to meet the goals
- Tasks are assigned, proper action is performed
One can see the benefits of using such system, and as those seemingly restricting constraints seem to reduce flexibility, they instead increase it as the system provides a clear frame of thinking in order to find a better way to achieve the goals. Ray Dalio seems to be using systems a lot, which is based on pattern recognition. I very much appreciate that he tries to approach truth through this lens, as well as to get to the root of some problems by identifying general patterns. I believe this empiricist mindset is crucial to get a big picture understanding of complex issues and make informed decisions.
The apparent counterintuitive assertion regarding the truth that perfectionism is flawed and that we should be "efficient imperfectionists" comes from this frame of thinking deeply grounded in reality, but does not deny a rigorous/scientific methodology. It is instead an acknowledgment that truth can be very fluid beyond the rigid scaffoldings of theory and in the realms of reality, and that attempting to find its perfect form can be limiting.
Overall, Principles by Ray Dalio is a good read that provides the reader with tools, principles, to build successful businesses. Its dense nature means that there is much more to this book than presented here, that is why I urge you to read it if my review caught your attention.
Finally, a parallel can be made with my previous post, Deconstruct to reconstruct. Due to the already deconstructed nature of this book into principles, the reader does not have to do it himself.
The first part of the process is deconstructing. It is breaking down something complex into smaller sets.
Thus, reconstructing/reapplying these principles to one's own life context is more straightforward.
The second step of this process is reconstructing. It is necessary to understand the whole. By making interconnections between ideas, and placing what we deconstructed into different places/contexts, we are able to see a problem or a complex system from different angles, and gain a broader understanding of the complex whole.
I would argue that this could lead to a dogmatic belief into Ray Dalio's principles without self-reflection on these, as one can be tempted to apply and believe in them mindlessly. The solution to this can be paradoxically found in one of Ray Dalio's principle : compare theory to reality, using reality as a feedback loop on what you believe is true, linking theory to your own experiences. Experience is the key to understanding.