Ray Dalio’s Principles for Work

Ray Dalio’s Principles explainer video

• An organization is like a machine, made of two main parts: culture and people
  • a. Great organizations have great people and a great culture.
  • b. Great people combine high character with strong capability.
  • c. A great culture doesn’t hide problems or disagreements; it surfaces and solves them openly, encourages imagination, and is willing to pioneer.
• Tough love produces outstanding performance and strong relationships
  • a. To achieve great things, hold the line where you must; don’t compromise on what matters.
• Idea meritocracy weighted by believability is the best way to make effective decisions.
• Make your passion and your work one, and push forward with like‑minded people.
• Build a strong culture…
  • 1 Believe in radical truth and radical transparency
    • 1.1 Don’t fear learning the facts.
    • 1.2 Be honest and expect honesty from others.
      • a. If you won’t say it to someone’s face, don’t say it behind their back. Criticize face‑to‑face.
      • b. Don’t let personal loyalty get in the way of truth and the organization’s interests.
    • 1.3 Create an environment where everyone has the right to know what’s reasonable to know; don’t silently withhold dissent.
      • a. Speak up and own your views — or move on.
      • b. Be completely open and straightforward.
      • c. Don’t be credulous toward people who lack integrity.
    • 1.4 Keep radical transparency.
      • a. Use transparency to achieve justice.
      • b. Share the hardest things to share.
      • c. Keep exceptions to radical transparency to a minimum.
      • d. Ensure those who gain information via transparency manage it well and exercise sound judgment.
      • e. Be transparent with those who can manage information; be less transparent or part ways with those who can’t.
      • f. Don’t provide sensitive information to the organization’s adversaries.
    • 1.5 Meaningful work and meaningful relationships reinforce each other — especially in an environment of radical truth and transparency.
  • 2 Do meaningful work and build meaningful relationships
    • 2.1 Be loyal to the shared mission, not to people who are half‑hearted about it.
    • 2.2 Be explicit about how we relate to one another.
      • a. Ensure people are more considerate than demanding.
      • b. Ensure everyone understands the difference between fairness/reasonableness and generosity.
      • c. Be clear about boundaries, and stand on the side of fairness.
      • d. Pay should correspond to the work.
    • 2.3 Recognize that scale threatens meaningful relationships.
    • 2.4 Remember many people only pretend to work for you while pursuing self‑interest.
    • 2.5 Value honesty, capability, and consistency between inner and outer self.
  • 3 Build a culture that allows mistakes but doesn’t tolerate failing to learn from them
    • 3.1 See that mistakes are a natural by‑product of evolution.
      • a. Turn failures into good outcomes.
      • b. Don’t stew over mistakes — yours or others’; value them.
    • 3.2 Focus less on winning or losing in the moment and more on achieving the goal.
      • a. Focus on accuracy vs. inaccuracy, not blame vs. praise.
    • 3.3 Watch for patterns of mistakes to detect root weaknesses.
    • 3.4 After pain, reflect.
      • a. Be able to reflect — and make sure your people can too.
      • b. No one sees themselves objectively.
      • c. Teach and reinforce “another bump, another lesson.”
    • 3.5 Know which mistakes are acceptable and which are intolerable; don’t let people commit the intolerable ones.
  • 4 Seek consensus — and stick to it
    • 4.1 Understand conflict is essential to building strong relationships; people use conflict to test principles and resolve differences.
      • a. Spend the time and energy to build consensus — it’s among the best investments you can make.
    • 4.2 Know how to seek consensus and manage disagreements.
      • a. Put likely disagreements on the table.
      • b. …
• Build and evolve your machine…
  • 10 Manage like operating a machine to achieve goals
    • 10.1 Look down from a higher level at your machine and yourself.
      • a. Constantly compare outcomes to goals.
      • b. Great managers are the engineers of their organizations.
      • c. Create quantitative metrics.
      • d. Don’t get so caught up in busywork that you neglect the machine.
      • e. Don’t let fires distract you.
    • 10.2 Every response to a problem should serve two purposes: (1) move you closer to the goal; (2) train and test the machine (people and design).

Published at: Oct 8, 2025 · Modified at: Oct 26, 2025