Ray Dalio is one of the legendary leaders of our time. I still remember how thrilled I was when telling his jungle story to a friend after listening to him on a podcast. My friend recommended Ray’s book, Principles. The book then became one of my favorite reads. I find Ray’s principles so valuable that I am keen to learn the principles of others.
In this post, I want to share the principles of the leaders I am learning from. You can use the list to benchmark and improve your own.
Although these principles are derived from a few names, based on my research, they are fundamental principles that many great leaders share.
Hope this long post is useful to you. Please leave your thoughts and feedback so that I can improve the posts for you in the future.
Ray Dalio, Billionaire Investor and Founder of Bridgewater.
1. Pain + Refection = Progress
Ray Dalio talked about this principle many times and wrote it down in Principles of Life and Work:
“There is no avoiding pain, especially if you’re going after ambitious goals. Believe it or not, you are lucky to feel that kind of pain if you approach it correctly, because it is a signal that you need to find solutions so you can progress.
If you can develop a reflexive reaction to psychic pain that causes you to reflect on it rather than avoid it, it will lead to your rapid learning/evolving. After seeing how much more effective it is to face the painful realities that are caused by your problems, mistakes, and weaknesses, I believe you won’t want to operate any other way. It’s just a matter of getting in the habit of doing it.
Most people have a tough time reflecting when they are in pain and they pay attention to other things when the pain passes, so they miss out on the reflections that provide the lessons. If you can reflect well while you’re in pain (which is probably too much to ask), great. But if you can remember to reflect after it passes, that’s valuable too.”
Ray Dalio’s story
In 1982, Dalio made a big bet on a global economic collapse and predicted it would happen. However, he was wrong and lost a lot of money for his clients and himself. At the age of 33, he became broke, had to lay off most of his staff and borrowed $4000 from his father to pay family bills.
He felt humiliated and depressed. But instead of giving up, he reflected on his mistake and realized that he had been overconfident and blind to other perspectives. He decided to seek out people who disagreed with him and learn from them.
He also developed a system of radical transparency and feedback at Bridgewater, where everyone could challenge each other’s ideas and opinions. This helped him improve his decision-making and avoid repeating his errors. Later, he was able to rebuild his business and achieve remarkable success in the financial world. He is today worth 15.4 billion USD.
2. Look at the machine from the higher level
Rise over our own and others’ circumstances and inspect them from a higher viewpoint.
Ray explained this principle: “Higher-level thinking gives you the ability to study and influence the cause-effect relationships at play in your life and use them to get the outcomes you want.
By comparing your outcomes with your goals, you can determine how to modify your machine. Distinguish between you as the designer of your machine and you as a worker with your machine.
The biggest mistake most people make is to not see themselves and others objectively, which leads them to bump into their own and others’ weaknesses again and again. Successful people are those who can go above themselves to see things objectively and manage those things to shape change.”
Ray Dalio’s story
In 2008, Ray foresaw the signs of a coming financial crisis and anticipated that many banks and companies would collapse. He analyzed the situation from a higher perspective: recognised the historical patterns and cycles that were unfolding, understood that the government would step in with monetary policies to combat deflation. He also examined his own machine and confirmed that he had the right people and processes to implement his strategy.
Ultimately, he chose to go against the market and distribute funds to assets such as government bonds, gold, and stocks, which demonstrated strong performance during the subsequent economic recovery and expansion phase benefit from the downturn. Thanks to this pe, he was able to safeguard his clients’ wealth and make huge profits, while also assisting others to cope with the crisis.
3. Embrace reality and deal with it
Embrace reality to learn what is true and what works, and apply that understanding to accomplish our goals.
Here is how Ray explained this principle:
“Learning how reality works, visualizing the things I want to create, and then building them out is incredibly exciting to me. Stretching for big goals puts me in the position of failing and needing to learn and come up with new inventions in order to move forward.
I find it exhilarating being caught up in the feedback loop of rapid learning–just as a surfer loves riding a wave, even though it sometimes leads to crashes. Don’t get me wrong, I’m still scared of the crashes and I still find them painful. But I keep that pain in perspective, knowing that I will get through these setbacks and that most of my learning will come from reflecting on them.
Just as long-distance runners push through pain to experience the pleasure of ‘runner’s high,’ I have largely gotten past the pain of my mistake making and instead enjoy the pleasure that comes with learning from it. I believe that with practice you can change your habits and experience the same ‘mistake learner’s high.'”
Ray Dalio’s story
In 2013, Ray Dalio underwent a routine endoscopy that revealed a condition called Barrett’s Esophagus with high-grade dysplasia, which had a high risk of turning into cancer of the esophagus.
He was shocked and scared by the news, but he decided to embrace his health’s reality. He researched the condition and consulted with several doctors who had different opinions and recommendations. He triangulated his view with believable people who were willing to disagree, and he chose the best course of action for him.
He underwent a successful surgery that removed the affected tissue and cured his condition. It turned out that he didn’t have cancer after all, but he was glad that he faced reality and took action before it was too late.
Bill Campbell, Coach of Steve Jobs and other world-class leaders
4. To care about people, you have to care about people
Show authentic interest and concern for your employees, customers, and partners, and avoid treating them as mere tools to achieve your goals.
For Bill Campbell, caring about people was not just a slogan, but a way of life. He had a knack for doing it naturally and authentically.
Eric Schmidt, Jonathan Rosenberg and Alan Eagle wrote in Trillion Dollar Coach: “He’d ask about your family, your hobbies, your interests. He’d remember the names of your kids and spouse. He’d show up for you when things got rough. He’d make time for you, no matter how busy he was. He’d build communities inside and outside of work. He argued that you can’t separate your human and working selves.
While love is not a common word in business books, it was part of Campbell’s secret to success.”
What others talked about Bill?
“He loves people, and he loves growing people” — Steve Jobs, Apple
“His legacy is the smile that he created on everyone’s face and the great leaders of the valley whom he coached.” — Eric Schmidt, Google
“People go on the ‘Oprah’ show and in five minutes they think Oprah is their best friend. In Silicon Valley, five thousand people think Bill is their best friend.” — Ben Horowitz, A16Z
5. Work the team, then the problem
Concentrate on creating and enhancing the teams before addressing any problem or opportunity.
Bill’s priority with any team he coached was to improve the team dynamics before turning to strategy or execution.
He ensured that people communicated effectively, resolved their conflicts, and got along. He also ensured that the team had the right balance of skills and personalities and that everyone knew their roles and responsibilities.
Bill Campbell’s story
When Eric Schmidt took over as the CEO of Google in 2001, he faced the challenge of leading a fast-growing and innovative company with two young and brilliant founders, Larry Page and Sergey Brin. Bill Campbell helped Eric build a partnership with Larry and Sergey, based on trust, respect and collaboration.
He helped develop a process where the three could work out issues privately and then present a united front behind the best decision. This was not about consensus-building, but rather a way to express dissent, lobby each other, hear everyone out, and then arrive at a decision. As investor Chris Sacca noted, “No one was selling out. They had just been taught this amazing art of decision-making…There’s no doubt that it was all Coach.”
6. Win as a team – don’t care who gets credit, win ethically
Cultivate a team-oriented mindset, where everyone prioritizes collective success over their own ego or agenda.
Bill taught leaders to acknowledge and reward team accomplishments instead of individual achievements. As the Trillion Dollar Coach book states, “Bill’s philosophy was that the team is everything. He believed that the best way to achieve great results was to create teams that act as communities, where people integrate their interests, put aside their differences, and work together for the common good.”
Bill Campbell’s story
During his tenure at Intuit, Bill Campbell discouraged product managers from dictating features to engineers. Instead, he fostered a collaborative approach that gave engineers the freedom to innovate. This approach not only resulted in better products but also instilled a sense of shared ownership and ethical responsibility among the team members.
Eric Schmidt summarised Campbell’s impact by stating that he looked for four key characteristics in people: intelligence, hard work, high integrity, and grit. This quote reflects the essence of Campbell’s coaching philosophy, which focuses on building resilient teams that thrive on collaboration and integrity.
7. Purpose beyond profit
Find your own purpose and align it with your business strategy.
Howard believes that having a clear and compelling reason for existing that goes beyond making money gives a company a competitive edge and a lasting impact.
He writes in his book From the Ground Up: A Journey to Reimagine the Promise of America that “a company’s reason for being can’t be only about making a profit. It also has to be about making a difference – in its people’s lives, in its customers’ lives, and in society” .
Howard Schulz’s story
In 2008, during the economic downturn, Starbucks was facing a tough time. Sales had plummeted, and the company’s stock price had fallen sharply. Howard Schultz had to return as CEO to steer the company through the storm and was under pressure to cut costs.
The market was abuzz with talk: “Starbucks needs to undo all these company-owned stores and franchise the system,” they said, a move that would have flooded Starbucks with cash and boosted returns. Economically, it made sense; it was a compelling argument for enhancing shareholder value. Yet, Schultz knew it would “fracture the culture of the company.” He believed that one cannot simply adopt a new roadmap that contradicts one’s core identity. “You have to be authentic, you have to be true,” he insisted, confident that staying true to Starbucks’ values was the only way forward.
Amidst this, he was advised, “You are roasting 400 million pounds of coffee a year. If you reduce the quality 5%, no one would know.” But Schultz was resolute: “We would never do that.” His unwavering commitment to quality and authenticity over mere profit is a testament to his leadership and the enduring values of Starbucks.
8. Make your own opportunities
Realize that success is not a matter of fortune, but a product of hard work, perseverance, and creativity.
In his book Pour Your Heart Into It: How Starbucks Built a Company One Cup at a Time, Howard wrote “I believe life is a series of near misses. A lot of what we ascribe to luck is not luck at all. It’s seizing the day and accepting responsibility for your future. It’s seeing what other people don’t see and pursuing that vision”.
Howard Schulz’s story
In the late 1980s, Howard Schultz faced a pivotal challenge. After his trip to Italy, he was filled with the vision of bringing the Italian café culture to America. However, the original Starbucks founders were resistant to Schultz’s ideas of transforming their stores into espresso bars. Undeterred, Schultz decided to forge his own path.
In 1985, Schultz opened Il Giornale, an Italian-style coffeehouse, in Seattle. This venture was a test of Schultz’s belief in his vision and his ability to create his own opportunities. He faced the daunting task of convincing Americans to adopt a new way of consuming coffee — a challenge given the country’s entrenched drip coffee culture.
Schultz’s perseverance paid off when, in 1987, he acquired Starbucks for $3.8 million with the help of investors. This acquisition allowed him to merge Il Giornale with Starbucks and begin transforming the company into the global coffeehouse chain we know today.
9. Roads are bumpy
Accept that the road to success is dotted with mistakes well-handled
Difficulties and challenges are inevitable for any business, but leaders should stay consistent and resilient in the face of adversity. This acceptance of Howard helped Starbucks overcome various obstacles and setbacks that threatened the company’s survival and growth.
He has also learned from his mistakes and failures and used them as opportunities to improve and innovate. He says “The most powerful lessons I have learned have come during the most difficult periods” and “the only way to build a great company is to endure”.
Howard Schulz’s story
In 2022, Starbucks had a bumpy road: supply chain disruptions, the aftermath of COVID-19, and a wave of unionization among its employees. Howard Schultz, returning as CEO, addressed these issues head-on with a comprehensive plan to “reinvent” the Starbucks experience. He emphasized the need to modernize the company to meet the evolving behaviors, needs, and expectations of both partners and customers.
Schultz’s strategy involved five “Bold Moves,” which included re-envisioning the company’s mission, improving the well-being of retail partners, reimagining the store experience, reconnecting with customers, and redesigning partnership models for mutual success. He also suspended the share repurchasing program to invest more profits into people and stores.
Schultz’s approach was rooted in accountability and innovation, as he stated, “We must modernize and transform the Starbucks experience… It will take our collective courage to begin again”1. This reflected his commitment to navigating Starbucks through the tough times by fostering a culture of resilience and adaptability.
Tim Cook, CEO of Apple
10. Make risky but smart bets
Take calculated risks that have the chance to yield large rewards but also have a distinct vision and strategy to mitigate the possible downsides.
For Tim Cook, innovation requires boldness and daring, but also intelligence and focus. He says “We say no to good ideas every day. We say no to great ideas in order to keep the amount of things we focus on very small in number so that we can put enormous energy behind the ones we do choose.”
Tim Cook’s story
In 2017, Tim Cook introduced the iPhone X, a high-end smartphone that boasted a new design, a larger screen, facial recognition, and wireless charging. However, he faced the risk of pricing out many customers who were accustomed to paying less for iPhones or were content with the existing models. He also had to deliver a flawless and secure product, particularly after the Face ID demo failed on stage.
Nevertheless, it was a wise move as Tim foresaw the demand for a more advanced and immersive iPhone experience and cultivated a loyal and aspirational fan base. He also ensured the quality and reliability of the iPhone X and addressed concerns about privacy and security.
Consequently, the iPhone X became the world’s best-selling smartphone in Q1 2018 and accounted for 27% of Apple’s overall revenue in Q2 2018, which was the most substantial contribution by an iPhone model in the company’s history at that time.
11. Be nice and competitive
Being competitive is not about being ruthless or arrogant, but about striving to be the best in one’s field.
Tim Cook thinks that as long as players are nice, competition is healthy and necessary for innovation and growth: “The reality is, is that we love competition, at Apple. We think it makes us all better. But we want people to invent their own stuff.”
Tim Cook’s story
Apple and Google have long been competitors in the smartphone market, with Google’s Android operating system powering devices that rival Apple’s iOS. Despite occasional disagreements over privacy, data collection, and app store policies, Tim Cook, Apple’s CEO, has taken a pragmatic approach. He recognizes Google’s positive contributions to the industry and has collaborated with them on significant initiatives.
Notably, during the COVID-19 pandemic, they jointly developed contact tracing apps, demonstrating that being competitive doesn’t preclude cooperation. It’s a delicate balance—competing fiercely while respecting each other’s strengths and addressing global challenges together.
As Tim Cook himself expressed: “I think their search engine is the best.” He followed up by emphasizing the privacy features Apple has implemented in its Safari browser, demonstrating a nuanced perspective that combines competition with respect for excellence.
12. Keep calm and have faith
Trust in your’s own abilities, values, and vision in the face of challenges, uncertainties, and pressures.
The more bumpy the roads are, the calmer the driver should be.
Tim’s belief in faith is a source of strength and guidance for him. He was baptized in a Baptist church when he was young and still attends church regularly. He prays daily and trusts that God has a plan for him. He said that his faith helps him deal with stress and uncertainty.
Tim Cook’s story
In 2009, Tim Cook faced the daunting challenge of surviving a cancer scare and running Apple in the absence of Steve Jobs, who was on medical leave. He had to cope with the uncertainty and fear of his own health condition, as well as the responsibility and pressure of leading the company during a critical time. Additionally, he had to manage the expectations and speculations of the stakeholders, who were concerned about the future of Apple and its products.
Despite all these challenges, Tim Cook kept his cool and maintained faith in his own recovery and leadership abilities. He considered himself “fortunate” to have had a successful surgery and maintained a “positive outlook” on his life. He also felt “honored” to serve as the interim CEO and had a “clear vision” for Apple.
He followed the advice of his doctor and his own intuition, focusing on both his health and his work. He also relied on his team and network, trusting their support and guidance. As a result, Tim Cook overcame his cancer scare and resumed his normal activities. He also led Apple through a successful period, launching new products such as the iPhone 3GS, the iPad, and the MacBook Air.
Information was collected and edited via Google and Copilot. Most of the sources are linked. Other sources:
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