Principles are ways of successfully dealing with reality to get what you want out of life.
Ray Dalio, one of the world’s most successful investors and entrepreneurs, cites principles as his key to success.
In 1975, Ray Dalio founded Bridgewater Associates, out of his two-bedroom apartment in New York City. Over forty years later, Bridgewater has grown into the largest hedge fund in the world and the fifth most important private company in the United States (according to Fortune magazine), and Dalio himself has been named to TIME’s list of the 100 most influential people in the world. Along the way Dalio discovered unique principles that have led to his and Bridgewater’s unique success. It is these principles, and not anything special about Dalio, that he believes are the reason behind whatever success he has had. He is now at a stage in his life that he wants to pass these principles along to others for them to judge for themselves and to do whatever they want with them.
Work Principle
When evaluating whether to outsource a function you currently do in house, make sure to weigh quality, economics, the loss of institutional knowledge, and security.
- Quality Control. When someone doing work for you is an employee, you are responsible for the quality of their work. But when the person working for you works for another company, you're operating by their standards, so it's important to know whether their standards are as high or higher than yours.
- Economics. If a full-time person is required, it is almost certainly more cost-effective to create a position. Consultants' daily rates add up to considerably more than the annualized cost of a full-time person.
- Institutionalization of Knowledge. Someone who is around your environment on an ongoing basis will gain knowledge and an appreciation of your culture that no outsider can.
- Security. Having outsiders do the job substantially increases your security risks, especially if you can't see them at work (and monitor whether they follow proper precautions, like not leaving sensitive documents on their desks).
You have to consider whether you should be outsourcing or developing capabilities in-house. Though temps and consultants are good for a quick fix, they won't augment your capacities in the long term.
Work Principle
- Design Improvements to Your Machine to Get Around Your Problems
- Build the organization around goals rather than tasks.
- When evaluating whether to outsource a function you currently do in house, make sure to weigh quality, economics, the loss of institutional knowledge, and security.
- Build the organization around goals rather than tasks.
Any person or organization can adopt Principles to better achieve their goals.
Learn what Principles are and how they are applied at Principles.com
