Page 370 - Ray Dalio - Principles

your money as they would their own and they won’t fire
themselves if they are doing a bad job. Only the ultimate RP
can do that.

When putting someone in a position of responsibility, make

sure their incentives are aligned with their responsibilities and
they experience the consequences of the outcomes they
produce. As an example, structure their deals so that they do
well or badly based on how well or badly you do in the areas
they are responsible for. This is fundamental for good
management.

a. Make sure that everyone has someone they report to. Even a company’s

owners have bosses, in their case, the investors whose money
is being spent to achieve their goals. If the owners are self-
funded, they still have to make their clients and employees
happy. And they can’t escape the responsibility of making sure
that their costs are acceptable and their goals are being met.
Even if a person’s job is unique, someone needs to be holding

them accountable at all times.

7.3 Remember the force behind the

thing.

Most people see the things around them without considering
the forces that created them. In most cases those forces were
specific people with specific qualities who worked in specific
ways. Change the people and you change how things develop;
replace creators with noncreators and you stop having
creations.

People tend to personify organizations (“Apple is a creative
company”) while mistakenly depersonalizing their results, thus
losing sight of who did what to produce them. That’s
misguided because companies don’t make decisions—people
do.

So who are the people in your organization behind the

results and culture that make it special? Think about who they
are and how they work together to make it what it is.