I have finally finished “Principles“, which I thought was a book that has given ideas and paths for how to live and work. Ray Dalio, the author, has made a lot of mistakes in life, but is still very successful today. I have made a blog post on the first part of this book here, which you can take a look.
The Five-Step Process
“Principles” is almost 600 pages long. I would by lying if I said I understood everything written in the book. There was one part where the author talked about brain and neurology, which to be honest lost me a little bit. However, I did not think it mattered much because the fundamental point lied in the five-step process, which was explained in detail … well, a lot of detail. Ray Dalio called it the steps to achieve everything in life. These five steps could be applied to both work and life, said Ran Dalio. They are as follows.
The First Step
We need to have clear objectives, which have to be prioritised. This means that we should not chase too many objectives simultaneously. More importantly, do not be confused between objectives and wishes. What we wish for is usually the very thing that pushes us away from the targets.
The Second Step
We need to identify our problems and do not let them interfere with what we want to achieve. The reason for problem identification is that each problem requires different solution. Once the problem is identified, do not just sit there … go fix it.
Ray Dalio emphasised many times in his book that: pain + revision = development.
The Third Step
After identifying the problems, we need to analyse them so that we know what causes them in the first place. This is important. We should focus on the cause of the problems before even thinking about solving them. Once we know the root cause of the problem, we go to step number 4.
The Fourth Step
This step is to design a way to manage the problems. Personally, I don’t think this step is that simple. A lot of the times, it is not even possible to do this on our own. This is because there is not just one way to manage the problems. Our job is to choose the method that works.
One thing that the author made this step clearer was the film making analogy. The author said that planning was like writing a film script. We began with a broad plan. We then got into it in more detail … little by little. Having a plan was not enough, said Ray Dalio. It is very important to be able to evaluate it, too.
The Fifth Step
The final step is to put everything into what we plan or what we design so that the expected results can be obtained. To put it simply, this is implementation. One of a few interesting methods is to create an indicator which can measures how well we do according to our plan.
Summary
These are the five-step process. This is not a one-loop process. It is continuous. That means once we have completed the process the first time, we push our target higher and continue with the same process. It implies that we will be able to go further and further, higher and higher.
Do not forget that this process is applicable to both work and life.
This is “Principles” and what I have been able to extract. There are also so much more to it than this. If you have a chance, I would recommend it.