Principles of strategy

Last year, I had the chance to read the book Principles by Ray Dalio, which covered many of the lessons Ray learned throughout his career of investing and business-building.

(Kindle version here.)

What I loved about the book was his approach to decision-making and how it centered on this idea of principles. Here’s a brief explanation of how he thinks about principles:

1. Slow down your thinking so you can note the criteria you are using to make your decision.

2. Write the criteria down as a principle.

3. Think about those criteria when you have an outcome to assess, and refine them before the next “one of those” comes along.

This way, whenever a new decision comes your way, you may be able to recognize its similarity to a decision you’ve made in the past, and then you can apply the same principles you used successfully before.

Voila! A shortcut to better decision-making. :)

The book is a #longread, and there are many, many different categories of principles that Ray talks about. One particular category that has stuck with me is his principles for strategy.

Here they are:

Principles for strategy

Don’t put the expedient ahead of the strategic.

Consider second-and third-order consequences, not just first-order ones.

Beware of paying too much attention to what is coming at you and not enough attention to your machine.

Remember that the WHO is more important than the WHAT

All of your “must-dos” must be above the bar before you do your “like-to-dos.”

These have been useful for me as I’ve weighed strategic decisions at Buffer recently.

Hope they can be helpful for you as well.