What could you learn from the founder of one of the world’s most successful hedge funds?

Not just how to manage a company.

Ray Dalio, the founder of Bridgewater Associates, shares more than his theory on why his company is successful in his well-known book, Principles, which is shared freely on Bridgewater’s website. Besides outlining in detail the numerous company values that create Bridgewater’s unique culture and famous policy of “radical transparency,” Dalio also spends some time illuminating his own personal values and why having and applying thoroughly considered principles is important for success.

As he explains:

All successful people operate by principles that help them be successful. Without principles, you would be forced to react to circumstances that come at you without considering what you value most and how to make choices to get what you want. This would prevent you from making the most of your life. While operating without principles is bad for individuals, it is even worse for groups of individuals (such as companies) because it leads to people randomly bumping into each other without understanding their own values and how to behave in order to be consistent with those values.

In other words, if you know what your values are, you’ll always know how to make decisions that are right for you. Our principles or values guide our everyday interactions and decisions toward what we want most out of business and life, and they ensure that both ourselves and our companies are internally consistent.

So, whether you’re managing a company or managing your own life, spend the time to really think about what your principles are and get them on paper. Most importantly, make sure these are coming from what you believe in rather than something imposed upon you. Dalio warns that “adopting pre-packaged principles without much thought exposes you to the risk of inconsistency with your true values.” The only way having values is effective in guiding you through your personal and professional lives is if you’ve gone through the hard work of figuring out what you believe in.

And hard work it is indeed—but here’s how to get started: The more you reflect on your past experiences, the more apparent your values become. For instance, consider the last time you had to make an extremely difficult decision. What factors did you care most about? How did you go about evaluating your options? Pay closer attention to how you’re reacting to things, and it may reveal some implicit principles that you’re already holding yourself to. For Dalio, his early experiences with investing helped him realize that he didn’t really care for the opinions of others—experts or not. He only cared about soundness of the reasoning behind opinions, which naturally lead him (and his company) to have an uncompromising focus on truth and evidence.

Once you have a sense of your own values, if you’re in the position to do so, you can take it a step further with your team or company and actually outline explicitly what your group values are. Try following Katie Douthwaite’s step-by-step guide on choosing your team’s core values. The process won’t necessarily be easy, but no one ever said success would be.


Photo of men talking courtesy of Shutterstock.