# Principles

Ray Dalio wrote a book, Principles on how he translated his beliefs into a set of organisational rules.

Very few industries work in the structured, measurable way that his wealth management world does.
When everybody must adopt a set of principles, such as in a company, they should be up for debate at all times.

How I think about principles

Principles are useful for encoding wisdom, solving future problems by abstracting lessons from previous problems. Meta problem-solving.

Principles offer consistency & predictability, which are ever more useful in large organisations, where people impacted by your future decisions want to subscribe to some sense of what you will do.

Principles are also a strategic tool: This is who we are, what we do, and what we don’t.

They are personal & contextual. They depend entirely on your position & priorities. Principles that work great for my set of circumstances may be adjectly terrible for you, and vice versa.

My Principles for Decision Making

Simplify & guard simplicity

Complexity looks smart. Simplicity is smart.
Prefer several small things, that do obvious & repurposable jobs.
Simplicity requires clarity, raising the bar for understanding.
Simplicity usually protects agility & reduces overhead.
Prefer less to more: Can this problem be solved by subtraction?

Don’t passively accept conventional wisdom

Most conventional wisdom is correct.
If it’s right and you don’t know why, you didn’t learn anything.
If it’s wrong, you verify or you pay.
Where are the underlying data or first principles?

Agility & Speed are the most important attributes

You will be wrong & you will make mistakes. It is high-effort to reduce error rates.
If you’re twice as quick, you can afford twice as many wrong turns.
Do nothing that reduces long-term speed & agility.
Prefer the option that leaves the most options. Optionality is agility.
FEEDBACK. LOOPS.
Make it safe to change your mind. People double down on their mistakes out of identity & shame.

Attack uncertainty first

Don’t start with what’s easy.
Don’t start with what has the most dependency.
Start with what is unknown. All risk is there.
Unpicking uncertainty early is a creative endeavour.

Everything is a system, whether you like it or not

There are always knock-on effects
Think systematically, or play Whack-a-mole

Sam