Page 402 - Ray Dalio - Principles

your relationship with the person who is probing you go well, working yourself through this
difficult probing will build your character and your equanimity.

k. Remember that people who see things and think one way often have difficulty communicating with and relating to people
who see things and think another way. Imagine you had to describe what a rose smells like to someone who
lacks a sense of smell. No matter how accurate your explanation, it will always fall short of the
actual experience. The same thing is true of differences in ways of thinking. They are like blind
spots, and if you have one (which we all do), it can be challenging to see what’s there. Working
through these differences requires a lot of patience and open-mindedness, as well as triangulating
with other people who can help fill in the picture.
l. Pull all suspicious threads. It’s worth pulling all suspicious threads because: 1) Small negative situations
can be symptomatic of serious underlying problems; 2) Resolving small differences of perception
may prevent more serious divergence of views; and 3) In trying to create a culture that values
excellence, constantly reinforcing the need to point out and stare at problems—no matter how small
—is essential (otherwise you risk setting an example of tolerating mediocrity).
Prioritization can be a trap if it causes you to ignore the problems around you. Allowing small
problems to go unnoticed and unaddressed creates the perception that it’s acceptable to tolerate such
things. Imagine that all your little problems are small pieces of trash you’re stepping over to get to
the other side of a room. Sure, what’s on the other side of the room may be very important, but it
won’t hurt you to pick up the trash as you come to it, and by reinforcing the culture of excellence it
will have positive second- and third-order consequences that will reverberate across your whole
organization. While you don’t need to pick up every piece, you should never lose sight of the fact
that you’re stepping over the trash nor that it’s probably not as hard as you think to pick up a piece
or two as you go on your way.

m. Recognize that there are many ways to skin a cat. Your assessment of how Responsible Parties are doing
their jobs should not be based on whether they’re doing it your way but whether they’re doing it in a
good way. Be careful about expecting a person who achieves success one way to do it a different
way. That’s like insisting that Babe Ruth improve his swing.

10.7 Think like an owner, and expect the people you work with

to do the same.

It’s a basic reality that if you don’t experience the consequences of your actions, you’ll take less
ownership of them. If you are an employee, and you get a paycheck for turning up and pleasing
your boss, your mind-set will inevitably be trained to this cause-effect relationship. If you are a
manager, make sure you structure incentives and penalties that encourage people to take full
ownership of what they do and not just coast by. This includes straightforward things such as
spending money like it’s their own and making sure their responsibilities aren’t neglected when
they’re out of the office. When people recognize that their own well-being is directly connected to
that of their community, the ownership relationship becomes reciprocal.
a. Going on vacation doesn’t mean one can neglect one’s responsibilities. Thinking like an owner means making
sure that your responsibilities are handled well regardless of what comes up. While you are away on
vacation, it’s your responsibility to make sure nothing drops. You can do that via a combination of
good planning and coordination before you go and staying on top of things while you are away. This
needn’t take much time—it can be as little as an hour of good checking from afar and it doesn’t
even have to be every day, so you can typically slip it in when it’s convenient.
b. Force yourself and the people who work for you to do difficult things. It’s a basic law of nature: You must
stretch yourself if you want to get strong. You and your people must act with each other like trainers
in gyms in order to keep each other fit.

10.8 Recognize and deal with key-man risk.

Every key person should have at least one person who can replace him or her. It’s best to have those
people designated as likely successors and to have them apprentice and help in doing those jobs.