You can buy the book here (I will receive a small commission!). But first check your library.

Written by Ray Dalio 

• Success comes more from realizing what you don’t don’t know than what you do know
• Principles are fundamental truths that help us as we go through life.
• All successful people operate by Principles. We act in ways that can be easily explained. Not everyone writes them down.

When evaluating someone try to identify their principles
Some principles are self defined & created. Others are adopted from society or other people like our parents:

• Think for yourself. What do you want? What is true? What should you do to be true & get what you want?
  • People that have shared values and principles get along. Those that have conflicting principles have conflict.
  • Be clear about your principles & then walk the walk. Don’t be phony, be clear to others.
• One key to success is to always strive for a lot but be ok failing.
• To be an entrepreneur or stock trader you must think for yourself and make bets against the consensus.
• Write down your decision making criteria whenever you are making a decision. This helps systematize the process and allows you to  build consistency.
  • Develop your own principals and write them down!
• Ray’s Life & Work principles are laid out in this book. His Economic & Investing principles can be found in a second book.

Part 1 — Where I’m Coming From
Our goals influence our path. Over the course of life we make millions of decisions which constantly move us forward.Look for the cause effect relationship in those your admire or want to emulate.

Chapter 1: My Call to Adventure (1949-1967)

• Born in 1949 in Long Island. Was an ordinary kid from an ordinary family. Has a self proclaimed bad rote memory and did not like school.
  • Dad was a musician.
  • Mom died at 19
  • Had many jobs growing up such as stocking the local department store, running a newspaper route, & caddying at the local golf course.
  • Vividly remembers John F. Kennedy and his ideals in the 60s (Ray’s teenage years)
  • Took caddying money and started investing at 12 (1961).
• Great is better than terrible and terrible is better than mediocre.
• 1966 was Ray’s senior year in high school. This year would also prove to be the stock market peak, challenging Ray’s ideas about investing.

Chapter 2: Crossing the Threshold (1967-1979)

• Everyone expects the future to be a slightly modified version of the past. Instead, it is almost always very different.
• Prices tend to reflect people’s expectations. Stocks go up when companies perform better than expected and go down when they perform worse than expected. Most people are biased by recent performances.
  • Went to local community college and studied finance.
  • Traded commodity futures which had low margin requirements and could be leveraged.
  • Inspired by the Beatles, took on meditation as a part of life.
  • Hypoglycemia allowed Ray to avoid the Vietnam war draft.
• Currency events began appearing in news more often and caught Ray’s attention. Many of the world currency’s were pegged to US dollar. Worried about US printing to finance war, many countries began trading their currencies for gold.
  • Graduated with 4.0 in 1971 and got into Harvard Business School. Got a job as clerk at NY stock exchange.
• The more strongly policy makers make assurances against monetary devaluation, the more precarious the situation probably is and the more likely it is to occur.
  • Lived with people all over the world at HBS and learned from case studies, not whiteboard lectures.
  • Got commodities summer job at Merrill lynch.
• When everyone thinks the same thing, it’s built into the price & betting on it is probably a mistake.
• There exists a consequence for every action. 
• Most everything in life has happened before in history & follows a cause effect relationship.
  • Dominic & Dominic hired Ray to set up commodities division for a salary of 25K. However a bad stock market took down the firm.
• In trading you need to be defensive and aggressive. You need to experience pain to learn the defensive part.
  • Then worked at Shearson managing client risk utilizing commodities. 
    • Was fired for punching his boss.
  • In 1975, Ray opened Bridgewater Associates. (Name was originally from bridging waters & selling commodity futures in other nations)
• Ray views business as a way to go to exotic places & meet interesting people. If money is made then that’s a bonus! Money is one of the things in life you need but not the only or most important thing. Start with what is actually important and have a meaningful purpose — The money will follow. 
• Always assume you are missing something. Even sure bets can lose.
  • Helped McDonald’s bring the chicken nugget to market. The main hurdle was the price risk on chicken. McDonald’s partner “Lane,” unwilling to sign a fixed contract because of their price worries. Ray knew this was mostly due to feed cost (chicken business = chick + feed) and helped fix cost with corn and wheat futures. Now Lane could offer fixed chicken contract to McDonald’s.
  • 1976 had first son.

Chapter 3: My Abyss (1979-1982)

• One of most volatile economic periods. High unemployment.
  • In 1979 Ray’s second son was born.
• Timing is everything. Ray’s friend (Nelson) Bunker Hunt was a billionaire who went broke from over exposure to silver. The price rose to $10 (Ray sold) then to $50 then dropped again to under $10.
• This period featured high levels of debt and inflation. Government faced a choice between accelerating inflation and deflationary depression. Ray held gold and bonds as a hedge.
• In 1982 Mexico defaulted on their national debt grinding debt markets to a halt
• Fed made money more readily available. The market jumped:
  • Ray predicted only 5% chance of this succeeding.
  • But it worked & an 18 year boom ensued.
• Money poured out of borrower nations into the US, strengthening the dollar and allowing interest rates to rise without crushing the economy.
  • As a result of being so wrong Ray had to let go of all employees.
  • Ray realized he was arrogant and way too confident.
• Timing is hard. Even if you are right, the market can often stay irrational longer than you can stay solvent. 
• Debts denominated in ones own currency can be restructured.
  • Crash gave Ray humility — From then on, he was  willing to challenge his own ideas ask, “What am I missing?”

Only way to succeed:

• Seek out the smartest people who disagree with you to understand their view.
• Be willing to not have an opinion or know when to not have an opinion.
• Develop, test & systemize timeless principals to live by.
• Balance risk in ways that maintains big upside but hedges against big downside.

Chapter 4: My Road of Trials (1983-1994)

• Bridgewater used computers and algorithms early in the game.
• “He that lives by the crystal ball is destined to eat ground glass.”
• What’s more important is the ability to respond to current conditions — you can then apply algorithms to past data and tweak so it aligns.
• Always write down your decision making criteria so you can look back and improve. Also known as, “Back testing.”
• Computer + The Human Brain makes a great partnership. Computer can analyze data way more efficiently. But the brain can see and process new creative ideas & connections better. Bridgewater overrides the computer recommendation ~2% of the time.
• Without systems you will go crazy with constant decision making.
• Establish a risk neutral benchmark. Then use alpha overlay to make measured bets when you have a strong conviction. Active alpha, passive beta.
  • Became top performing us bond manager
  • Consulting allowed Ray to travel to interesting places such as China when China was less known.
  • Saw potential for China growth in 21st century & was one of first to set up investment company. Decided not to pursue it because of shaky accounting and amount of time and attention it would have required.
• If you work hard you can have anything you want but you can’t have everything you want.
• Maturity is giving up good opportunities to pursue better ones.
• Leaders must be judged within the circumstances they encounter.
• Ray loves Meeting interesting people and seeing life through their eyes. Rich or poor. Be curious enough to understand how people who see things differently developed that perspective.
  • Bob Prince joined Bridgewater in 1986. Office was in a barn Ray owned and lived in on a farm. The company reached 20 people by end of the 1980’s.
• Surround yourself with people who work for a personal mission not a pay check.
• Bad times coupled with good reflection are the best learning moments.
• Ray values character, creativity and common sense over experience (though some situations warrant experience)
• Having a few good uncorrelated income streams is best way to hedge and be successful. Best way is having upside without being overly exposed to downsize.
• Individual assets within same asset class are typically ~60% correlated. You can pick 1000 stocks and still not be properly diversified.
  • Used pure alpha strategy to deliver better results than any other hedge fund.
• Use mistakes as opportunity to learn and grow. Penalizing mistakes leads to culture of hiding mistakes. Having a culture that encourages expressing mistakes leads to iteration and improvement. Have error log.

To foster collaborative & open relationships:

• Put honest thoughts on the table.
• Have thoughtful disagreements with the ability & willingness to change your mind.
• Have a system in place to deal with continued disagreements & move beyond them without resentment.

Chapter 5: The Ultimate Boom (1995- 2010)

• Greg Jensen joined straight out of college in 1996 & would go on to become co-CEO.
• Helped give Larry Summers advice to create an inflation protected U.S. bond.
• Mid 1990’s Ray created a trust for family & thought about the mix of assets for long term gains. All asset classes eventually lose. Advisers that can navigate all environments effectively (very rare) don’t live forever.

Gives 4 environments to consider:

1. Rising growth & rising inflation
2. Rising growth and declining inflation
3. Declining growth & rising inflation
4. Declining growth and declining inflation

• Became “all weather” product.
• People assume challenges of growing big business are greater than growing small company. This is not true. They are just different.
• To grow your company you need to know what kind of company you want to be. Boutique or large institution?
• The number of principles you live by can start small and grow over time as you or your company grows.
• Idea-meritocracy requires full transparency. 
• Those who do not understand that people think differently will not be good leaders or or managers.
  • To understand how people think use the Myers Briggs test.
  • Make baseball card of your & your employees stats. If your a “big idea” person don’t focus on detail oriented tasks. Find someone else.
• Nothing prompts learning like pain and suffering.
• Much of the way we think is physiological and can be changed (Ray’s son has to overcome bipolar disorder).
  • Ray conducted a time study and decided he couldn’t adequately run the management of Bridgewater and the investment management. 
  • At this time Bridgewater had grown to 178 people & had a management committee.
  • Met with policy officials prior to 2008 financial crisis. Had compared numbers and day to day actions to past crises.
• 14% return in 2008 despite the crisis. Many more debt crises will come and will likely surprise as many people. 
• Economists need to connect and speak with finance people to improve global macro models. They don’t have same feedback loop that investors have.
• Beware of tall poppy syndrome. Those That grow tallest have the highest chance of having their head whacked off. Beware of too much recognition.
  • Ray published his principals on his website in 2010.
• It is a rare person who has the character, creativity & common sense to enact change. Most people need helping hand.

Chapter 6: Returning the Boon (2011-2015)
Life consists of 3 phases:

1. We are dependent on others and learn.
2. Others are dependent on us and we work.
3. Others are no longer dependent on us and we no longer need to work. We can savor life.

• In 2011, Ray announced his plan to step down as CEO and start a slow transition to mentor. 
• Principles was created out of a need to explore and understand the shapers of society. Started with conversing with Walter Issacson (wrote biographies on Steve Jobs, Ben Franklin, Albert Einstein)
  • All have a lot in common.
  • They are all independent thinkers. They don’t let anyone or anything get in the way of their need to achieve.
  • They have a road map of what they want but are willing to test these mental road maps in the real world. 
  • They have wider range of vision than most. Granular & big picture at same time. Creative, systematic and practical.
  • Passionate about what they do and intolerant of those that don’t have a passion for what they do.
    • Elon spoke about Tesla key fob as much as rest of the car.
    • Spacex was founded because of lack of vision from NASA and belief that humans would eventually inspire a catastrophic event on earth and need somewhere else to go.
  • Choose achieving goals over pleasing others.
  • Some shapers are inventors, others are managers.
  • Shapers move from success to success over decades.
• There are far fewer types of people in world than people and far fewer situations than time. Patterns exists.
• The same types of people in the same types of situations tend to produce the best results.
• For consistent results systemize decision making. At Bridgewater investment decisions were far more systemized than management decision making.
• Ray believes strongly in algorithmic decision making. All can agree it is fair. Same principles and actions applied on a consistent basis.
  • May 2013 became a grandfather
  • 2010 saw a potential European debt crisis. Again met with resistance by policy-makers.
• The investment community is an amalgam of individuals. Not one player.
• A true hero gets satisfaction from the results they produce not the credit / recognition they receive.
  • Made 2013 video on how the economic machine works: https://www.youtube.com/watch?v=PHe0bXAIuk0&list=PLtxdEpL7whp8RRHkzBVAGfRLiKJx8oOXi
• Foreign policy is generally played as a chess game against opponents with a more selfless approach than would be acceptable for an individual. Each country is trying to maximize their interests.
• A hero dreams of unattainable goals. The capable worry about future while the unwise worry about nothing. If all issues were solved acutely there would be no hero’s.
• Ray wanted to give his children excellent healthcare, excellent education & a boost to get their careers started. Nothing more.
  • Ray wrestled with how much money to give away/ keep for his family. Landed on somewhere beyond 50% give.
• Seek giving opportunities with philanthropic returns (maximize the good from your philanthropy. Different than measuring profits from a business)

Chapter 7: My last year and greatest challenge (2016 -2017)

• Ray realized what he didn’t know was greater than he knew in the sector of replacing leaders effectively.
• To effectively transition leadership:
  • Put capable CEOs in place
  • Have system in place to replace CEOs if they prove to not be capable.
• April 2017 Ray officially stepped down as interim CEO and began the 3rd phase of his life.

Chapter 8: Looking back from a Higher Level

• Reality is a gorgeous perpetual motion machine. Causes become effects which are in turn are new causes.
• Pain is life’s way of saying there is an important lesson to learn.
• Satisfaction does not come from success but struggling well towards success.
• Incremental benefits of having a lot are not nearly as great as people think.
• The basics: good relationships, good food & good sex are most important. Those things don’t get much better when you have a lot of money or can even get worse.
• People one meets at the top are not necessarily more special.
• Marginal benefits of having more fall off quickly. Having a lot more comes with a lot more obligations.
• Happiest people find their own nature and map their path to it. Relaxed life is better for some than life full of accomplishments.

Part 2 — Life Principles

Chapter 1: Embrace Reality and Deal With It
Think of life as a game with each problem as a puzzle that needs to be solved. When you solve a puzzle you get a gem (principle) that allows you to continue to higher levels in the game.

• Embrace the mistake learners high (similar to a runners high from pushing through the pain)

1.1 — Be a hyper realist

• People that create things are grounded in reality.
• Dreams + reality + determination = successful life
• Idealists + ungrounded = problem creator.
• Some people want to change the world. Others want to live in simple harmony with it. That is OK. 

1.2 — Truth (an accurate understanding of reality) is essential foundation for any good outcome

• Most people fight truth when it’s not what they want it to be.
• More important to understand and deal with bad stuff since good stuff will take care of itself.

1.3 — Be radically open minded and radically transparent

• Greatly improves efficiency of feedback loops involved in learning. Opens one to criticism, you must be ok with this.

1.4 — Look to nature to learn how reality works

• All laws of reality given by nature not created by man. Flight and satellites were possible by harnessing existing laws of nature.
• Man alone can take a perspective outside of oneself. Considering the future and past. Abstract and logical thinking.
• Makes us unique among other species but can also make us uniquely confused. What is good what is bad. Reconciling amp to one with logic.
• Man is just one of 10 million species. Most look from a broader perspective to see universal truths.
• Nature is smarter than we are.

1.5 — Evolving is life’s greatest accomplishment and reward

• All species (and companies) will either evolve or go extinct.

1.6 — Understand nature’s practical lessons

•  A — maximize your evolution.
  • Because of conscious memory based learning (evolved neocortex) mankind can shape their evolution and increase its speed.
• B — Remember no pain no gain.
  • Nature gave us pain for a purpose. It alerts us and helps to direct us.
• C — It is a fundamental law of nature that to gain strength one needs to push limits which is painful.

1.7 — Pain + reflection = progress

• Facing painful realities leads to progress. Avoiding it does not.

1.8 — Weigh the 2nd & 3rd order consequences of actions

• For example, the first order consequences of exercise = pain and time.
• However the 2nd order is health & fitness.
• 1st order consequences can be distraction or barrier to overcome.

1.9 — Own your outcomes

• What ever circumstances live brings you by taking full responsibility will give you greater control on your actions and happiness.

1.10 — Look at machine from higher level

• Higher level thinking — Study your life and those around you from above.

Choices when confronting weaknesses:

1. Deny them
2. Accept them and try to enact change
3. Accept them and try to find ways around them
4. Change what you are after

• F — Asking others for help in areas you are weak is a great strength.
• G — Because it is hard to view oneself objectively, it is important to reply on others input.
• H — If you are open minded and determined enough you can achieve almost anything you want. However, it will be easier if you choose items that align with your nature.

1. Don’t confuse what you wish is true with what is actually true
2. Dont worry about looking good. Worry about a achieving goals
3. Don’t value 1st order achievements without accounting for 2nd and 3rd order consequences
4. Don’t let pain stand in the way of progress
5. Don’t blame bad outcomes on anyone but yourself

Chapter 2: Use the 5 step process to get what you want out of life
5 steps:

1. Have clear goals
2. Identify and don’t tolerate problems that stand in way
3. Accurately diagnose problems to get at root causes
4. Design plans that will get you around those problems
5. Do what is necessary to see those plans to fruition

• This is a loop. Setting goals continuously higher. Don’t blur or skip steps. It is an iterative process.

2.1 — Have clear goals

• A — Prioritize. While you can have anything you want you can’t have everything you want.
• B — Don’t confuse goals with desires. A goal is something you really want to achieve. Desires often 1st order consequences that can get in the way of our long term goals. i.e. A desire to eat good tasting but unhealthy food and a goal of getting in shape.  
• C — Reconcile goals and desires to resonate with what you really want in life.
• D — Don’t mistake the trappings of success for success itself.
• E — Never rule out a goal because you think it is unattainable. What you think is attainable is based only on what you know now.
• F — Remember that great expectations create great capabilities.
• G — Almost nothing can stop you from achieving if you have flexibility and self accountability.
• H — Knowing how to deal with setbacks is just as important as knowing how to move forward

2.2 — Identify and don’t tolerate problems

• A — View painful problems as potential improvements that are screaming at you.
• B — Don’t avoid confronting problems because they are rooted in harsh realities that are unpleasant to look at.
• C — Be specific in identifying your problems.
• D — Don’t mistake a cause of problems for the real problem.
  • I’m not getting enough sleep is not the problem it is the cause of a potential problem.
• E — Distinguish big problems from small problems. Spend most of your time on big problems but make sure little problems aren’t contributing to big problems.
• F — Once you identity a problem don’t tolerate.

2.3 — Diagnose problems to get at their root causes

• A — Figure out what a problem is before trying to solve it.
  • 15 min to 1 hour. Speak to all related stake holders
• B — Identify proximate causes from root causes.
  • Proximate causes are generally actions denoted by verbs.
  • Root causes run deeper and are usually described by adjectives.
• C — Recognize that identifying what someone is like, including yourself, will tell your what you can expect from them.

2.4 — Design a plan

• A — Go back before you go forward.
  • Examine past.
• B — Imagine outcomes as being produced from a machine. View from above.
• C — Typically there exist many paths to achieving your goals. You only need to find one that works.
• D — Imagine your plan as movie script. Start with big picture (who and what) then drill down.
• E — Write down your plan for everyone to see and measure your progress against.
• F — Recognize it doesn’t take a lot of time to define a plan.

2.5—Push through to execution

• A — Great planners who don’t follow through go nowhere.
• B — Good work habits vastly underrated.
• C — Establish clear metrics to track progress. Ideally have a 3rd party keep you accountable.

2.6 — Remember that weaknesses don’t matter if you find solutions

• Virtually no one can do all 5 steps perfectly. Requires different qualities.
• Have humility so you can get what you need from others.

2.7— Understand your own and other people’s mental maps and humilities
Chapter 3: Be radically open minded
3.1— Recognize your two barriers. Ego and blind spots

• A — Ego barrier.
  • Is one of the deepest seeded fears rooted in the subconscious.
• B — Your two you’s fight to control you. Higher level & lower level conscious.
  • Fight and flight vs logical mind.
• C — Understand your blind spot barrier.
  • In what ways does your way of thinking blind you? Some people see linearly, others laterally. Some big picture, some small.

3.2 — Practice radical open mindedness

• Recognize that others may see things better

3.3— Appreciate the art of thoughtful disagreement

• Use questions instead of statements. Have conversations not arguments.
• Practice relaying back the others persecutive.
• Don’t need to do this with everyone. Just those you find the most believable.

3.4—Triangulate your view with believable people who are are willing to disagree

• A — Plan for the worst case scenario to make it as good as possible.

3.5 — Recognize the signs of open mindedness and closed mindedness that you should look for.

• Closed minded people more likely to make statements not questions.
• Closed minded people focus more on being understood then understanding others.
• Open minded people more interested in listening than speaking.
• Closed minded people use “I could be wrong” to appear open minded.

3.6 — Understand how you can become radically open minded

• A — Regularly use pain as your guide towards quality reflection
• B — Make being open minded a habit.
• C —Get to know blind spots.
• D — If a number of believe people see something differently and only you see it the other way assume you could be wrong.
• E — Mediate.
• F — Be evidenced based and encourage others to do the same.
• G — Do everything in your power to help others be reasonable.
• H— Used evidence based decision making tools.
• I — Know when it’s based to stop fighting and have faith in your decision making process.

Chapter 4:Understand that people are wired very differently
4.1 — Understand the power that comes from knowing how you and others are wired

• Ray recommends using psychometric testing. Worked with Bob Eichinger who connected physiological and psychological differences that others were hesitant to connect.
• 1 in 5 Americans have clinical mental issues. It is a physiological issue. 

4.2— Meaningful work and meaningful relationships aren’t just nice things we chose for ourself — they are genetically programmed into us

• Altruism
• Morality
• Sense of consciousness and honor
  • All of the above come from this development.

4.3— Understand the great brain battles and how to control them to get what you want

• A —Realize that the conscious mind is battling against the subconscious mind.
  • There are large parts of our brains & thinking that are not logical.
  • Some parts of the subconscious mind are quicker and better than the conscious. Be aware and reflect on your subconscious.
• B — The most constant struggle is between thinking and feeling.
• D — Choose your habits well.
  • If you do just about anything consistently a habit will form. Inertia to keep up current actions. Takes 18 months to stick.
  • If you really want to change, identify your three most harmful habits and try to break them.
  • Pick the right habits and acquire them.
• E — Train your lower level you with love and kindness and persistence so the right habits are formed.
• F —Understand the differences between right and left brain thinking.
  • Left is linear logical thinking.
  • Right is big picture abstract.
• G — Understand how much the brain can and cannot change.
  • We can change and build habits but underlying preferences are unlikely to change. Accept your weaknesses.

4.4— Find out what you and others are like

• Psychometric assessments:
  • Myers Briggs type indicator.
  • Work place personality inventory.
  • Team dimensions profile.
  • Stratified systems theory.

4.5—Getting the right people in the right roles in support of your goal is the key to succeeding at whatever you choose to accomplish

• A — Manage yourself and orchestrate others to get what you want.
  • Lower vs higher self is the hardest personal challenge. Use habits.
  • For others imagine an orchestra that needs to be conducted. Need the right components who then need to be led.

Chapter 5: Learn how to make decisions effectively

• Most facets are subconscious.

5.1—Recognize that 1) the biggest threat to good decision making is harmful emotions & 2) Decision making is a two step process (First learning then deciding)

• Deciding is picking which factors to consider. Then evaluating 1st 2nd and 3rd order consequences.
• Don’t choose first and cherry pick data second.

5.2—Synthesizing information effectively

• A — One of most important decisions you can make is who you ask questions of.
• B — Don’t believe everything you hear.
• C — Everything looks bigger up close.
• D — New is overvalued yo that which is great.
• E — Don’t over squeeze dots (individual data points).

5.3— Synthesize the situation through time

• A — Keep in mind the rates of change, the levels of things & their relation to one another. Are you improving but still below average?
• B — Be imprecise.
  • Use approximations as a time saver and for conceptual thinking.
  • For 38 * 12 using 40*10=400 is good enough for most situations.
• C — Remember the 80/20 rule & know what the 20 % is.
• D — Be an imperfectionist.

5.4— Navigate levels effectively

• Move between macro and micro

5.5—Logic reason and common sense are the best tools for synthesizing reality and understanding what to do about it

• Until you make the subconscious conscious you will make decisions based on it and call it fate.

5.6— Make your decisions as expected value calculations

• Probability & reward for being right as well as probability and penalty for being wrong.
  • If you have a 60% chance of succeeding and gaining $100 the expected gain = $60
  • If you also have a 40% failing and losing $100 the expected loss is = -$40
    • Your expected value over time is $20
  • Sometimes it’s ok to pursue a small chance if the reward is great and the consequence is small / something you can afford to cover.
    • “It never hurts to ask”
• A — Raising the probably of being right is valuable no matter where it started.
• B — Knowing when not to bet is as important as knowing which bets are worth making.
• C — The best choices are those that have more pros than cons not those that have no cons at all.

5.7— Prioritize by weighing the value of additional information against the cost of not deciding

• A — All of your must dos must be above bar before pursing “like to dos”.
• B — Chances are you won’t have time for the less important things.
• C — Don’t mistake possibilities for probabilities.

5.8— Simplify

• Even a fool can make things complicated. Only a genius can make things simple.

5.9— Apply principles Almost all cases are “another one of those”

• Slow down so you understand the decision making criteria.
• Write your criteria down as a principle.
• Think out criteria when you have an outcome to analyze and revise principles before next “one of those”.

5.10— Believability weight your decision making

• Avoid common mistakes:
  • Valuing your own believability more than is logical.
  • Not distinguishing who is more or less credible.

5.11— Convert principles to algorithm and let computer make decisions

• Can also analyze your principles against historical events.
• Understanding the language of computers critical
• Only human intelligence can answer certain questions.

5.12— Be cautious relying on AI without understanding them deeply

• Ray divides computer aided decision making into 3 categories:
  • Expert systems.
    • Designers specify criteria based on logical understanding of cause and effect relationships and test new scenarios.
  • Mimicking.
    • Computer observes patterns without understanding of logic. Can fall out of sync with reality if criteria are changing (ie open system / real world).
  • Data mining.
    • Machine learning. Powerful computers ingest enormous amounts of data to find patterns. Problem exists when future is different than past. Computers have no common sense. Can misconstrue correlation for causation. Ex. Humans eat breakfast in the morning because waking up makes you hungry.
  • Life principles: putting it all together
    • To have best life possible you need to know what the best decisions are and have the courage to make them.
    • Relatively well thought out principles will allow you to respond to just about anything life throws at you.
    • Constantly iterate based on feedback loop and the feedback of others.
    • Get help from others. You can’t be the best at everything.
    • Practice radical open mindedness.

Part 3 — Work Principles

• An organization is a machine made up of culture and people.

Chapter 1 — Trust in radical truth and radical transparency

• This ensures issues are transparent instead of hidden. If you are handling things well this will be clear. If handling poor thus will also be clear.
• IT TAKES GETTING USED TO (18 months).
• Concealing the truth might make people happier in the short term but it won’t make them smarter or more trusting in the long run.

1.1— Realize you have nothing to fear from learning the truth

• Even a negative medical diagnosis is better than not knowing so you can get treatment and make a plan.

1.2— Have integrity and demand it from others

• Being duplicitous may give immediate results (don’t have to engage in conflict) but being consistent in all situations gives tremendous 2nd and 3rd order results. Align what you say with what you think and what you think with what you feel.

1.3— Create an environment where everyone has the right to understand what makes sense and none one has a right to hold a critical opinion without speaking up

• A — Speak up & own it or get out.
• B — Be extremely open.
• C — Don’t be naive about dishonesty.
  • Can’t view as black and white, one strike and you’re out. Must view situationally.

1.4— Be radically transparent

• Radical transparency isn’t full transparency. There are still items that are best kept private such as health issues.

1.5— Meaningful relationships and meaningful work are mutually reinforcing especially with radical transparency and honesty
Chapter 2: Cultivate meaningful work and meaningful relationships
2.1— Be loyal to the common mission and not to anyone who isn’t operating consistently with it2.2— Be crystal clear what the deal is & where there can and cannot be compromise

• A — Make sure people give more consideration for others than they do for themselves.
• B — Make sure people understand the difference between fairness and generosity.
  • Generosity is good. Entitlement is bad.
• C — Know where the line is and be on the far side of fair.
• D — Pay for work.
  • Must be economically viable for employees. Don’t get caught up in the ebbs and flows but in general employees should be compensated for additional work and docked for falling below the expect level of work.

2.3—Recognize that size of organization can pose a threat to meaningful relationships

• Create groups of 100 or less.

2.4—Recognize that most people will pretend to operate on your interest while acting in their own2.5— Treasure honorable people that will treat you well when you are not looking
Chapter 3: create a culture where it is OK to make mistakes but imperative that you learn from them

• “I have not failed, I have found 10,000 ways that don’t work” — Thomas Edison.
• If you don’t look back and view the you from one year ago as ignorant you are not learning enough.
• Mistakes are an opportunity not failure.

3.1— Mistakes are a natural part of the evolutionary process

• A — Fail well.
  • Everyone fails. They are only succeeding at the things you notice.
• B — Don’t feel bad about your mistakes or others. Love them.

3.2— Don’t worry about looking good. Worry about achieving goals

• A — Get over blame and credit. Embrace accurate and inaccurate.

3.3— Observe the patterns of mistakes to see if they are caused by weaknesses

• Identify your one big challenge (no more than 3) to tackle.

3.4— Remember to reflect when you experience pain

• A — Be self reflective and make sure your people are self reflective.
  • Pain + reflection = progress.
• B — Know that nobody can see themselves objectively. We all have blind spots.
• C — Teach and reinforce the merits of mistake based learning.
  • Use an issue log.

3.5—Know which type of mistakes are acceptable and which are not and make sure those that are not are avoided
Chapter 4: Get and stay in sync

• People must be open minded and assertive at the same time.

4.1 — Recognize that conflicts are necessary for great relationships because they are how people decide whether their principles are aligned and resolve their differences

• A — Spend lavishly on the time and effort you spend getting in synch.

4.2 — Know how to get in sync and disagree well

• A — Surface areas of possible disagreement.
• B — Distinguish between idle complaints and those meant to lead to improvement.
• C — Remember that every story has another side.

4.3 — Be open minded and assertive at the same time

• A — Distinguish open minded people from closed minded people.
  • Do you like being around people who know more than you?
• B — Don’t have anything to do with closed minded people.
  • Being open minded is more important than being smart.
• C — Watch out for people who think it’s embarrassing not to know.
• D — Make sure those in charge are open minded to the questions and comments of others.
• E —  Recognize that getting in synch is a two way responsibility.
• F — Worry more about substance than style.
• G — Be reasonable and expect others to be reasonable.
• H — Making questions and suggestions is not the same as criticizing.

4.4 — If it is your meeting to run manage the conversation

• A — Make it clear who is directing the meeting and who it is meant to serve.
• B — Be precise in what you are talking about so it is not misunderstood.
• C — Make clear what type of communication you are going to have in light of the objectives.
  • Debate or for education?
• D — Lead the discussion by being assertive and open minded.
• E — Navigate through the different levels of the conversation.
• F — Watch out for topic drift. Track the conversation on a whiteboard.
• G — Enforce the logic of conversations.
• H — Be careful not to lose personal responsibility via group decision making. Assign who is responsible for following up.
• I — Utilize the two minute role to avoid interruptions.
• J — Watch out for assertive fast talkers. Slow them down. Don’t feel pressured to not ask questions or appear stupid.
• K — Achieve completion in conversations. State take aways and to-dos.
• L — Leverage your communication.
  • Use audio and video recordings of meetings or an email to the office.

4.5 — Great collaboration feels like playing jazz

• A — 1+1 = 3
  • Leverage each other’s strengths and watch out for what the other is missing.
• B — 3-5 is greater than 20
  • 3-5 smart conceptual people seeking right answers in open minded way will lead to best answers.
    • Adding more people is marginal and eventually slows things drown

4.6 — When you have alignment cherish it4.7 — If you find you can’t reconcile major differences — especially in values — consider whether the relationship is worth conserving
Chapter 5: Believability weight your decision making

• The most believable people are those who have:
  • Done something successfully numerous times.
  • Are able to explain cause effect relationship behind success.

5.1 — Having an idea meritocracy requires you understand the viewpoint and merit of each person’s ideas

• A — If you can’t successfully do something, don’t think you can tell others what to do.
• B — Everyone has opinions and many are wrong.

5.2 — Find the most believable people that disagree with you and try to understand their reasoning

• A — Think about someone’s believability to assess the likelihood that their ideas are good.
• B — Remember that believability is most likely to come from:
  • Someone who has done something successfully at least 3 times.
  • Someone who understands the logic behind their decision making.
• C — If someone hasn’t done something but has a theory that seems logical and can be stress tested go ahead. You are playing a numbers game.
• D — Pay less attention to someone’s conclusions & more on how they got to their conclusions.
• E — Inexperienced people can have great ideas and opinions too. Experienced people can get stuck in their ways.
• F — Everyone should be upfront with how strongly they believe in their idea or opinion.

5.3 — Think about if you should be playing role of a teacher, student or a peer. Teaching, asking questions or debating

• A — It is more important that the student understand the teacher than the other way around. Student should be open minded first. Then the teacher can understand and untangle the students perspective.
• B — Recognize that while everyone has the right and responsibility to make sense of important things they must do so with humility and open mindedness.

5.4 — Understand how people came about their opinions

• Use data and reasoning.

5.5 — Disagreeing must be done efficiently

• A — Know when you should stop debating and move on to agreeing about what should be done.
• B — Use believability weighting as a tool rather than a substitute for decision making by responsible parties.
• C — Since you don’t have time to thoroughly explore everyone’s thinking, choose your believability weighted people wisely.
  • Finding 3 people who care about the outcome is usually sufficient.
• D — When responsible for a decision compare your decision to the consensus of the believability weighted vote.

5.6 — Everyone has the right and responsibility to make sense of important things

• A — Communications aimed at getting the best answer should involve the most relevant people.
• B — Communications aimed at education or cohesion should involve a wider range of people.
• C — Recognize that you don’t need to make judgements on everything.

5.7 — Pay more attention to if the decision making system is fair than if you get your way
Chapter 6: Recognize how to get beyond disagreements

• Like a legal system you need a well-defined method that can render a final verdict.

6.1— Principles can’t be ignored by mutual agreement

• Principles operate like laws. If the principles are outdated change the principle don’t just ignore them. 

6.2—Make sure people don’t confuse the right to complain, give advice and openly debate for the right to make decisions

• A — When challenging a decision or decision maker make sure to consider the wider context.
  • Is it a small component of a larger idea or an important decision for the company.

6.3— Don’t leave important conflicts unresolved

• A — Don’t let the disagreement on little things divide you when the agreements on bigger things should bind you together.
• B — Don’t get stuck in disagreement. Escalate or vote.

6.4— Once a decision is made everyone needs to get behind it

• A — See things from the higher level.
  • Get out of your head and view from larger omniscient perspective and from others views.
• B — Never let the idea meritocracy turn into anarchy.
• C — Don’t allow lynch mobs or mob rule.
  • Individuals have the right to an opinion not to render verdicts.

6.5—If the idea meritocracy comes in conflict with the wellbeing of the organization it will suffer

• A — Declare Marshall law only In extreme situations when principles need to be suspended.
• B — Be wary of people who argue for the suspension of the idea meritocracy for the good of the organization.

6.6—If those in power don’t want to abide by principles the system will fail

• Who is more important than the what. Hire the right people. Not just the people that are like you.

Chapter 7:  Remember the who is not more important than the what

• Remember the goal
  • Give the goal to people who can achieve it (or less good, tell them what to do to achieve it – micromanaging)
• Hold them accountable.
• If they still can’t do the job after you train them and give them time, get rid of them.

7.1— Recognize that the most important decision you make is who you choose as your responsible parties

• The most important RPs (responsible parties) are those responsible for the goal’s machine and outcomes at the highest levels.

7.2— The ultimate RP are those who bear the consequences of the decision. You can delegate control of your money to someone else but you are still the ultimate party responsible and who is effected

• A — Make sure everyone has someone to answer to.

7.3—Remember the force behind the thing

• Most people see the things around them without thinking about the force and people behind the results and outcomes.

Chapter 8: Hire right because the penalties for hiring wrong is huge
8.1— Match the person to the design. Don’t design jobs to fit people

• A — Think about what values abilities & skills you are looking for in that order.
  • Skills can be learned quickly. The others change much more slowly.
• B — Make finding the right people scientific and systematic.
• C — Here the click. Find the right fit between the role and the person.
• D — Look for people who sparkle. Not just someone who fits.
• E — Don’t use your pull to get someone a job.

8.2—People are built very differently. Different ways of thinking are more suitable for certain jobs

• A — Understand how to utilize and interpret personality tests.
• B — Remember that people tend to pick people like themselves. So pick interviewers similar to the qualities you are looking for.
• C — Look for people willing to look at themselves objectively.
• D — Remember that people don’t typically change that much. Especially over short durations like 1-2 years.

8.3— Think of your team the way professional sports teams do

• Different skills for different positions.
• Everyone needs to be excellent at their specialty or may need to be cut.

8.4— Pay attention to people’s track records. Everyone is fairly knowable if you do your homework

• A — Check references.
• B — Recognize that performance in school does not equate to success in the work place.
• C — While it’s best to have conceptual thinking, great experience and track record count for a lot.
• D — Beware of the impractical idealists.
• E — Don’t assume a person who has been successful elsewhere will be successful in your company.
• F — Make sure your people have good character and are capable.

8.5— Don’t hire people for the first job you are putting them in hire people you want to share your life with

• Turnover is costly.

8.6— When considering compensation, provide both stability and opportunity

• Enough to avoid financial stress but not fat and happy.

8.7— In great partnerships, consideration and generosity are more important than money.

• The only purpose of money is to get what you want. So think hard about what you value and put it above money.

8.8— Great people are hard to find so make sure you focus on keeping them
Chapter 9: Constantly train test evaluate and sort people

• Must decide between getting rid of nice but incapable people and keeping them and falling short of full potential.

9.1— Understand that you and the people you manage will go through a process of personal evolution

• No one is exempt. 

9.2— Provide constant feedback9.3— Evaluate accurately not kindly

• A — In the end accuracy and kindness are the same.
• B — Put your compliments and criticisms in perspective.
• C — Think about accuracy not implications.
  • Think about the “what,” first not what to do about it.
• D — Make accurate assessments.
  • Make sure people are doing things in a good way, not your way.
• E — Learn from success as well as failure.
  • Radical honestly doesn’t have to be all critical.
• F — Know that most everyone thinks what they did and what they are doing is more important than it is.

9.4— Recognize that tough love is the harshest and most rewarding to give

• A — While most people prefer compliments, accurate criticism is more valuable.

9.5— Don’t hide your observations about people. Explore them in the open

• A — Build your synthesis from the bottom up. Use specific data.
• B — Squeeze the dots. (Data points).
• C — Don’t over squeeze any one dot. Look holistically.
• D — Use evaluation tools such as evaluation metrics & psychological assessments to document all aspects of someone’s performance and progress.

9.6— Make the process of learning what someone is like open evolutionary and iterative

• A — Make rules and metrics clear and impartial.
• B — Encourage people to be objectively reflective about their performance.
• C — Look at the whole picture.
• D — For performance reviews start with specific cases. Look for patterns and get in synch with the person getting reviewed.
  • Review should not contain any surprises because you should have been giving constant feedback.
• E — When it comes to assessing people the two biggest mistakes are being over confident in your assessment and failing to get in synch with the person getting assessed.
• F — Get in synch on assessments in a non- hierarchal way.
• G — Learn about your people and have them learn about you through frank conversations.
• H — Making sure that people doing a good job does not require constant monitoring. Just check in occasionally and systematically.
• I — Recognize that change is difficult.
  • When confronting a change, ask am I being open minded or resistant.
• J — Help people through the pain that comes with exploring someone’s weaknesses.

9.7— Knowing how people operate and if it will lead to good results is more important than what they did

• Pay more attention to the swing than the shot. Outside factors can influence the end result. Focus on input not just the output.

9.8— Recognize that when you are in synch with someone about a weakness it is probably true

• A — When evaluating people, realize you don’t need need to get to a perfect understanding. A mutually agreed upon, by-in-large correct understanding is OK.
• B — It should take you no more than a year to find out what someone is like and if they are a fit for their job.
• C — Continue assessing people throughout their tenure.
• D — Evaluate employees with the same rigor as interviewees.

9.9— Train guardrail or remove people don’t rehabilitate people

• Values and abilities are difficult to change.

9.10—Remember that the goal of a transfer is the best highest use of the person that benefits the community as a team as a whole

• A — Have people complete their swings before moving on.
  • Usually takes 1 year in role before talking about a new role.

9.11—Don’t lower the bar

• Follow the 5 step process:
  • Identify goals.
  • Encountering our problems.
  • Diagnosing our problems to get at the root causes.
  • Designing changes to get around problems.
  • Doing what is needed.

Chapter 10: Manage as someone operating a machine to achieve a goal
10.1— Look down at your machine and yourself within it from the higher level

• A — Constantly compare your outcomes to your goals.
• B — Understand that a good manager is essentially an organizational engineer.
  • Use process flow charts.
  • Both creativity/ vision and management skills are needed. You can develop whichever you lack but need to start with one.
• C — Build great metrics.
  • Serves as an objective means of assessment.
  • Start with most the important questions to your business and what the ideal metrics would be.
• D — Beware of paying too much attention to what is coming at you and not enough on the machine at large.
• E — Don’t let shiny objects distract you from the larger machine.

10.2— Remember that for every case you deal with your approach should have two purposes:

• To move you closer to your goal.
• To train and test your machine (more important).

10.3— Understand the differences between managing, not managing and micro managing

• A — Managers must make sure that what they are responsible for is done well.
• B — Managing the people that report to you should feel like skiing together. Good back and forth as they learn by trial and error.
• C — An excellent skier likely makes a better ski instructor. This applies to management as well. You need to be believable.
• D — You should be able to delegate the details.

10.4— Know what your people are like and what makes them tick

• A —Regularly take the temperature of those who are important to you and the organization.
• B — Learn how much confidence to have in your people, don’t assume.
• C — Vary your involvement based on your confidence.

10.5—Clearly assign expectations.

• A —  Remember who has what responsibilities.
• B — Watch out for job slip (changes in job responsibility without conscious thought).

10.6— Probe deep and hard to know what you can expect from your machine

• A — Get a threshold understanding when managing an area.
• B — Avoid saying too distant.
• C — Use daily updates to stay on top of what your people are doing and thinking.
• D — Probe so you know if problems are likely to occur before they do.
• E — Probe to the level below the people who report to you.
• F — Have the people who report to the people who report to you be allowed to escalate something directly to you.
• G — Don’t assume that people’s answers are correct.
• H — Train your ear. Verbal queues will appear.
• I — Make your probing transparent rather than secret.
• J — Welcome probing of yourself.
• K — Remember those who see & think one way have a hard time connecting with and describing something to someone who thinks a different way.
• L — Pull all suspicious threads.
• M — Recognize that there are many ways to skin the cat. Assessment should not need to be based on your way of doing things as long as they are doing something a good way.

10.7— Think like an owner and expect the people you work with to do the same

• Structure incentives and penalties to make people take full ownership.

10.8— Recognize and deal with key person risk10.9— Don’t treat people the same. Treat them appropriately

• A — Don’t let yourself get squeezed.
• B — Care about the people who work for you.

10.10— Great leadership is generally not what it’s made out to be Don’t be manipulative. Speak to logic.

• It is OK to be uncertain.

10.11— Hold your people accountable and appreciate them keeping you accountable

• A — If you have agreed with someone that something should get done, hold them accountable to doing it unless you get in sync over a new thing to focus on.
• B — Distinguish between a failure of someone breaking their contract and not having a contract to begin with.
• C — Don’t get sucked down.
  • Don’t take on tasks that should belong to others as a manager.
• D — Watch out for people who confuse goals and tasks.
• E — Watch out for the unfocused theoretical should.
  • We should do xyz so and so should be able to do it.
  • Should instead be a focused person who is known to be able to do it.

10.12— Communicate the plan clearly and have clear objectives. Then convey whether you are progressing according to it

• A — Put things in perspective by looking back before moving forward.

10.13— Elevate when you can’t adequately handle your responsibilities

• Should not be seen as a failure and your downline people should do the same.

Chapter 11: Perceive and don’t tolerate problems

• Every problem you find is an opportunity to improve your machine.
• If you focus only on tasks and not long term goals you will allow mistakes to take place.

11.1— If you are not worried you need to worry. If you are worried you don’t need to worry11.2— Design and overview a machine to decide if things are don’t well enough or not well enough

• A — Give people the job of perceiving problems. Give them the proper channels to report them.
• B — Watch out for the frog in boiling water syndrome.
• C — Beware of group think.
  • Just because others aren’t concerned doesn’t mean you shouldn’t be.
• D — To perceive problems compare how the outcomes to your goals.
• E — Taste the soup. Think of your self as a chef. Taste before delivering to customer.
• F — Have as many eyes looking for problems as possible.
• G — Pop the cork. Give employees plenty of opportunities to speak up and ask them for feedback.
• H — Realize that the people closest to certain jobs know them best.

11.3— Be very specific about problems. Don’t start with generalizations

• A — Avoid the anonymous we or they. Assign responsibility by name.

11.4— Don’t be afraid to fix difficult problems

• A — Problems with a planned solution are better than identified problems.
• B — Think of the problems you perceive in a machine like way.
  • What. Who. When.

Chapter 12: Diagnose problems to get at their root cause

• Are the problems one off or prevalent

12.1— To diagnose well ask the following questions:

• Is the outcome good or bad?
• Who is responsible for the outcome?
• If bad Is the responsible party (RP) incapable or is the design bad?
  • Your job to steer conversation appropriately. Don’t let it get lost in unnecessary details.
• Did RP handle appropriately. Yes or no. Is this issue reoccurring, yes or no. Is failure due to training issues. Did RP escalate problem to the correct party?
  • If person is not capable they will need to be removed from the role.

12.2— Maintain an emerging synthesis by diagnosing continuously12.3— Diagnoses should produce outcomes

• A — If you have the same people doing the same things you should expect the same results.

12.4— Use the drill down technique to gain an 80/20 understanding of a department or area

• What 20 % of actions are causing 80% of the problems.
  • List problems. Be specific.
  • Find root cause. Keep asking why as you drill down.
  • Create a plan to address root causes
  • Execute the agreed upon plan.

12.5— Understand the diagnoses is foundational to both progress and quality relationships
Chapter 13: Design improvements to your machine to get around problems
13.1— Build your machine

• Likely takes 2x as long to build out a machine then simply completing the task at hand but pays dividends as time goes on.

13.2— Systemize your principles and how they will be implemented

• A — Create great decision making machines by creating principles/criteria as you go through the decision making process.

13.3— A good plan should be like a movie script

• A — Put your self in the position of pain for a while so you can understand what you are dealing with.
• B — Visualize alternative machines and their outcomes, then choose.
• C — Consider second and third order consequences not just first order.
• D — Use standing meetings to help your machine run like clockwork. Have standard input questions and non standard inquiries.
• E — Remember that a good machine takes in to account that people are imperfect.

13.4— Recognize that design is an iterative process. Between a bad now and a good future is a working through it process

• A — Understand the power of cleansing storms.

13.5— Build the organization around goals instead of tasks

• A —Build your organization from the top down.
  • Opposite of real estate. The foundation is built at the top.
• B — Remember that everyone must be overseen by a believable person with high standards.
• C — Make sure the people at the top of each pyramid have the skills to oversee their reports and a deep understanding of their jobs.
• D — In designing an organization, remember the 5 step process is the secret to success and different people are good at different steps.
• E — Don’t build the organization to fit the people. Jobs should be created for the work that needs to be done not the existing workers.
• F — Keep scale in mind. Goals must be kept on scale with the resources you have.
• G — Organize departments and sub departments on the most logical groupings based on gravitational pull.
• H — Make departments as self sufficient as possible with the resources needed to complete their jobs.
• I — Make sure the ratio of junior employees to their reports is appropriate. Ideally no more than 10:1.
• J — Consider succession and training in your design.
• K — Don’t just pay attention to your job. Pay attention to what would happen if you stepped out. Visualize your replacement.
• L — Do double dos instead of double checking. If the person double checking isn’t capable of doing the job themselves they aren’t qualified to check. Better to plan for having two people capable of doing something.
• M — Use consultants wisely and watch out for consultant addiction. Consider:
  • 1) Quality control.
  • 2) Economics (full time position is usually cheaper to create in house unless the knowledge sought is very specialized).
  • 3) Institutionalization of knowledge (do you want to internalize the skill or knowledge or always be forced to go outside for it).
  • 4) Security.

13.6— Create an organizational chart that looks like a series of pyramids for each department all creating one large pyramid that is the organization

• A — Involve the person that is involved with the specific pyramid in question when deciding issues between different parts of the pyramid.
• B — Don’t do work for another department or grab people from other departments without asking for permission from their head on the pyramid.
• C — Watch out for department slip. Those in charge of support should not be setting the vision. I.E. facilities choosing the new facility.

13.7—Create guard rails when necessary. Meant to help good people perform better, not help failing people

• A — Don’t expect people to recognize and compensate for their own blindspots.
• B — Consider the clover leaf design. Several people overlapping and checking and balancing each other.

13.8—Keep your strategic visions the same while making appropriate tactical changes as the situation dictates

• A — Don’t put the immediate in front of the strategic.
• B — Think about both the bigger picture and the granular details.

13.9— Have good controls so you are not exposed to the dishonesty of others

• A — Investigate and let others know you are going to investigate.
• B — No reason to have laws without policeman/ auditors.
• C — Beware of rubber stamping. Audit the auditors.
• D — Beware that people who spend money on your behalf will probably not do a good job.
• E — Use public hangings to deter bad behavior.

13.10—Have the clearest possible reporting lines

• A — Assign responsibility based on workflow design and capabilities. Not job title.
• B — Constantly think about how to produce leverage.
  • Ray = 50:1 with his reports and expects them to be 10-20:1 with their reports.
  • Principles are a form of leverage. Allows time to be saved making decisions.
• C — Smarter to have a few great people with great technology than more average people.
• D — Use leveragers. People who can effectively go from conceptual to reality.

13.11—Virtually everything will take more time and cost more money than you expect

• 1.5x of expected cost and time is a good rule of thumb.

Chapter 14: Do what you set out to do

• Recruit individuals who are willing to do the mundane tasks required for success.

14.1—Work for goals you & your organizations are excited about

• This will give proper motivation and perspective. If you aren’t excited about a goal you won’t do the difficult and mundane work required: Drop it.

13.2— Everyone has too much to do

• How to get more done:
  • Prioritize and say no.
  • Find the right people to delegate to.
  • Improve your productivity.
• Creativity, wisdom and character needed.

14.3—Use checklists

• A — Don’t confuse checklists with personal responsibility. Do the whole job well, not just to do list items.

14.4—Allow time for rest and renovation

• If you just keep doing you will burn out.

14.5—Ring the bell and celebrate when you reach your goals
Chapter 15: Use tools and protocols to shape how work is done

• Nearly impossible to change a behavior with out practicing. (Listening to audiobooks alone doesn’t do much)

15.1—Having systemized and embedded tools are especially important for an idea meritocracy

• A — To produce real behavioral change there must be real internalized learning.
  • The experiential learning now possible through software could lead to a step up in our ability to disseminate and internalize new ideas — similar to the invention of the book/printing press centuries ago.
• B — Use tools to collect data and process it into conclusions and actions.
  • Create algorithms.
• C — Create an environment of fairness & confidence by having clearly stated principles as well as tools and protocols.
  • This will leave less room for argument of those deemed to be ineffective.

Chapter 16: And for heavens sake don’t overlook good governance
16.1—To be successful all organizations must have checks and balances

• A — Even in an idea meritocracy merit alone cannot be the sole determining factor in assigning responsibilities. Appropriate vested interests must also be accounted for.
• B — Make sure that no one is more powerful than the system or too important to be replaced.
• C —  Beware of fiefdoms – must be loyal to the system not one division or boss.
• D — Make clear that the organizations’ systems and rules are set up to make sure the checks and balances work well.
• E — Make sure reporting lines are clear. Especially at the board level.
• F — Make sure decision rights are clear.
• G — Make sure the people doing the assessing have the ability and time to do so properly and don’t have a conflict of interest.
• H — Recognize that decision makers must have access to the information required to make decisions and must be trust worthy enough to access this information.

16.2—Remember that in an idea meritocracy a single CEO is not as good as a great group of leaders

• Leads to key man risk.

16.3—No governance system of Principles, Rules and Checks & Balances can Substitute for a Great Partnership
Work Principles: Putting it all togetherWe work with others to get three things:

• Leverage to accomplish chosen missions in bigger & better ways than we could achieve alone
• Quality relationships that make for good community
• Money that allows us to buy what we need and want for ourselves and others

You choose the mix and quantities that fit your goalsConclusion — Idea meritocracy is the best method of governance. To operate in this manner you will need to:

• Put honest thoughts on table for everyone to see
• Have thoughtful disagreements with quality backs and forths
• Have quality ways to get past disagreements such as believability weighted decision making

 Key Takeaways Ray Hopes We Will Seek:

• You make your work and passion one in the same
• You can struggle well with others on your common mission
• You can savor both your struggles & your rewards
• You will evolve quickly and contribute to evolution in a meaningful way

I hope you found this summary of “Principles,” helpful. If there are other books you think I should read and summarize, let me know! For additional insights check out:

• Crushing It Summary
• The 10X Rule Summary
• The Intelligent Investor Summary Series