I’ve been reading Principles by Ray Dalio, Life and Work, and this one hit me hard: you can do anything you want, but not everything.
The number one thing he is starting to talk about is that we make millions of decisions every day, and for those decisions we typically don’t have a system, a decision making process in our mind, or a systemized or computerized system. We make so many different decisions in our life and those decisions are the ones that basically steer where we go. He’s laying the foundation of how principles are absolutely necessary and important in order for us to be able to make decisions effectively, having a computerized system that makes decisions without emotion, and a natural system in our mind that we use to make decisions as well. That’s so far what I’ve learned.
I’ve also learned about futures, how companies can lock in futures contracts to lock in and make their costs more predictable. Ray Dalio talks about how he helped Lane Processing and McDonald’s. He got Lane Processing to do a contract for a fixed chicken cost by locking in corn and soymeal, the two ingredients you need to raise the chicken, as a futures contract. That let Lane Processing and McDonald’s do a deal and launch Chicken McNuggets in 1983.
The one thing I learned is that you should have an issue log. If anyone on my team makes a mistake, they put their own issue in a sheet, an issue log themselves, rather than the managers trying to catch them. If you didn’t log it, you would be in deep trouble. This way, managers had problems brought to them, which was worlds better than having to seek them out. Having a process that ensures problems are brought to the surface and their root cause diagnosed. I’m actually going to be implementing that in my team. I believe strongly that we should bring problems and disagreements to the surface to learn what should be done to make things better.
And then, making a handful of good unrelated bets that are balanced and leveraged well is the surest way of having a lot of upside without being exposed to unacceptable downside. The ability to figure things out is more important than having specific knowledge of how to do something. It seemed to Ray Dalio that young people were creating sensible innovation that was exciting; older folks who did things in the old ways held no appeal.
You can do anything you want, you just can’t do everything. So pick the handful, bring the problems up, and figure the rest out as you go.