What Ray Dalio from Bridgewater teaches us?
Learn the secrets of successful entrepreneurship from billionaire and investor Ray Dalio of Bridgewater Associates.
What Ray Dalio from Bridgewater teaches us?
As the multi-billionaires and successful businessmen of today inspire and continue to share their secrets of success with the world, more and more aspiring entrepreneurs and small business owners make their way up the success ladder and become great examples for the rest of us. While not everyone followed the same path to becoming uber-successful. Bill Gates did it with his company Microsoft by selling the most popular operating system and documentation software to millions of customers and enterprises worldwide, Steve Jobs did it by selling Macintosh and mobile products like the iPhone and iPod, Google did it with a plethora of services like Google Search, YouTube and Android, Mark Zuckerberg did it by selling advertisement spaces at his social media platform Facebook along with information about user behavior to other businesses, and the list goes on.
Among them, the name of investor and billionaire Raymond Dalio has been making rounds across the internet because of a series of books he has published since 2005 that outline his working methods and principles he has developed while running his firm Bridgewater Associates, which is one of the world’s leading hedge fund. Not just the continued success, but the failures that Dalio has faced since he started in this field have made him a role model and a source of inspiration to many. He made his first investment in 1961 at the age of 12 and since his life has revolved around finance and investments.
Through his principles, he has taught many aspiring businesses about how he started his investment firm right from his two-bedroom apartment in 1975, around the time when successful businessmen, such as Steve Jobs and Bill Gates started their companies. His books, especially “Principles” has sold more than 2 million copies worldwide and is regarded as one of the most powerful management books of all time. According to Dalio, “Taken together, these principles are meant to paint a picture of a process for the systematic pursuit of truth and excellence and for the rewards that accompany this pursuit.”
In this post, I have summarized a few of the many principles in his books that will help businesses and individuals become successful in their respective endeavors.
No harm in making mistakes
Mistakes are naturally made on a daily basis by all human beings. They are a part of life and no one should feel embarrassed for making them in their professional and personal lives. Not correcting them, however, can cause significant damage.
Since they are inevitable, according to Ray Dalio, mistakes must be systematically identified, examined and corrected frequently, and the lessons learnt from them must be spread to prevent the same mistake from happening again. He further recounts an event from the 1990s when the head of trading, Ross Walker, at his firm forgot to place a trade that ended up costing the company some money. He did not remove Walker from the position and instead put a management tool in place to take care of errors and mistakes.
Hire people who are better than you
The importance of people you hire at your business is huge and Dalio is a firm believer in it like the rest of us. He says that after years of hiring, training, and firing people, the one trick he has learnt about the hiring process is to always hire individuals who are better than you. The key, according to him, is to identify the employees who bring a specific set of skills to the table, therefore, if your team members can perform certain tasks better than yourself, you will not need to micromanage them later and you will have more time to focus on the aspects of your business that really matter. Also, employees work better when they are not micro-managed constantly.
Be radically open-minded to be successful
One of the most important lessons for guaranteed success near Dalio is about open-mindedness, since it explains how you can get around the hindrances that limit us from achieving success. The two obstacles to becoming open-minded are our blind spots and ego. The ego stops us from embracing from accepting our mistakes and makes us hold onto our fears while blind spots inhibit us from seeing things accurately due to the wiring of our brain. Letting go of our ego and keeping ourselves up to date with new developments is the key.
Open-minded parties insist on searching for the truth rather than being right every time they are confronted, which results in thoughtful disagreements instead of emotional conflicts.
Follow the 5-step process to become successful
Ray Dalio suggests the following 5-step process to become successful in any business:
- Always begin with a clear and achievable set of goals. If you are not sure about your aim since the beginning, you will not go much far with your company.
- Identify problems that stand in your way from the start.
- Diagnose the underlying causes behind those problems.
- Employ methods to solve or get around the obstacles.
- Continue with the execution process and get results.
The process is a continuous loop and when you have reached a target, you can start the process again for your next goals and so on.
Originally published at https://www.rizvihaider.com on July 28, 2020.