Page 423 - Ray Dalio - Principles

If they don’t, there’s no purpose to them. At a minimum, a
diagnosis should take the form of theories about root causes
and clarity about what information needs to be gathered to find

out more. At best, it should lead directly to a plan or design to
fix the problem or problems.

a. Remember that if you have the same people doing the same things, you
should expect the same results. Einstein defined insanity as doing the
same thing over and over and expecting different results.
Don’t fall into this trap because you’ll have a hard time getting
out of it.

12.4 Use the following “drill-down”

technique to gain an 80/20

understanding of a department

or sub-department that is

having problems.

A drill-down is a process that allows you to gain an
understanding of the root causes of the biggest problems in a
department or area so you can design a plan to make the area
excellent. Drill-downs are not diagnoses, but a form of broad

and deep probing. They’re not intended to uncover the causes
of every problem: only the 20 or so percent of causes that
produce 80 percent of the suboptimal effects. A drill-down
takes place in two steps and is then followed by design and
execution steps. If done well, the two drill-down steps can be
done in about four hours. It is very important that the steps be
done separately and independently, so as not to go in too many
directions at once. Let me take you through the drill-down

process, offering guidance and examples for each step.

Step 1: List the Problems. Quickly inventory all the core
problems. Be very specific, as this is the only way to
effectively find solutions. Don’t generalize or use the plural
“we” or “they.” Name the names of the people experiencing
the problems.