Part III: Work Principles (ii)

8. Hire right – the penalties of hiring wrong are huge

People who think independently, argue open-mindedly and assertively, and above all else value the intense pursuit of truth and excellence, and through it, the rapid improvement of themselves and the organization. Treat work as more than just what we do to make a living
Match the person to the design
In picking people for long-term relationships, values are most important, abilities come next, and skills are the least important
The 3Cs: character, common sense and creativity + drive for excellence
Get at their values, abilities and skills: Do they have a track record of excellence in what you’re expecting them to do? Have they done the thing you want them to do successfully at least three times?

When it comes to assessing a candidate’s common sense, vision, creativity or decision-making abilities, school records are of limited value
Beware of the impractical idealist
Don’t assume that a person who has been successful elsewhere will be successful in the job you’re giving them

What you need in the people you work with are excellent character and excellent capabilities, which is why it’s so hard to find great people

Most organizations overvalue the abilities piece and undervalue the character piece because of a shortsighted focus on getting the job done

The people you work with and the company itself will evolve in ways you can’t anticipate –> hire the kind of people you want to share a long-term mission with
Focus more on making the pie bigger than on how to slice it
The only purpose of money is to get you what you want, so think hard about what you value and put it above money
Think about how to keep great people –> build meaningful relationships, constantly getting in sync

9. Constantly train, test, evaluate and sort people

Help people develop
Helping people acquire skills is easy by providing them with appropriate training. Improvements in abilities are more difficult but essential to expanding what a person can be responsible for. Changing sb’s values is sth you should never count on – there comes a point when you must decide whether you are meant for each other
Every leader must decide between 1) getting rid of liked but incapable people to achieve their goals and 2) keeping the nice but incapable people and not achieving their goals

You must choose excellence, even though it might be difficult at the moment, because it’s best for everyone

Personal evolution –> discovering one’s strengths and weaknesses
Experience creates internalized learning that book learning can’t replace
Provide constant feedback
Evaluate accurately, not kindly –> think about accuracy, not implications –> make clear you’re just trying to understand what’s true; figuring out what to do about it is a separate discussion
Giving people the opportunity to struggle rather than giving them the things they are struggling for will make them stronger
Instead of celebrating how great we are, we focus on where we need to improve
Have a clear set of rules and a clear set of metrics to track how people are performing –> make evaluation more objective and fair
Be objectively reflective about one’s performance. Seeing yourself from a higher level is essential for personal evolution and achieving your goals
Pain comes from exploring one’s weaknesses –> [reframe] pain that comes with learning and personal evolution
What people are like is the best indicator of how well they are likely to handle their responsibilities in the future –> “paying more attention to the swing than the shot”

Assess people based on both their reasoning and their outcomes
Look at how well someone does what they do and the outcomes they produce over time

Performance = skills + ability. A weakness that is due to a lack of experience or training can be fixed by learning, while a weakness that is due to a lack of ability can’t be

When thinking about why sb is a poor performer, openly consider whether it is a problem with their abilities

Assess core values and abilities: ask yourself if you would have hired them for that job knowing what you know now; if not, get them out of the job
Training is part of a plan to develop people’s skills and help them evolve. Rehabilitation is an attempt to create significant changes in people’s values and/or abilities. Since values and abilities are difficult to change, rehabilitation is typically impractical

People with inappropriate values and inadequate abilities can have a devastating impact on the organization
Don’t expect people to be much better in the future than they have been in the past

10. Manage as somebody operating a machine to achieve a goal

Great managers see their organizations as machines and work assiduously to maintain and improve them. At a high level you are simply setting goals and building machines to help you achieve them
Constantly compare your outcomes to your goals –> be simultaneously trying to accomplish the goal and evaluating the machine (the people and the design)
Higher-level thinking: seeing things from the top down
Your machine will have problems. Identify those problems and diagnose their root causes

Any problem can be a one-off imperfection or a symptom of root causes that will show up as problems repeatedly
Think clearly how things should have gone and explore why they didn’t go that way

Keeping the cause-and-effect relationships in mind. Skillset of an organizational engineer
Metrics show how the machine is working: objective means of assessment + favorable impact on productivity

Start with the most important questions and imagine the metrics that will answer them
Train and test your machine

Great managers orchestrate rather than do – they do not play an instrument, but direct their people so that they play beautifully together

Managers must make sure that what they are responsible for works well

Delegate the details

There’s danger in thinking you’re delegating details when you’re actually being too distant from what’s important and essentially are not managing

Values, abilities and skills are the real drivers of behavior. Knowing them in detail will tell you which jobs a person can and cannot do well
Clearly assign responsibilities. Eliminate any confusion about expectations

Make sure that people remember how the team is supposed to work and play their positions well

Probe deep and hard to learn what you can expect from your machine

Constantly probe the people who report to you while making sure they understand that it’s good for them and everyone else
The people who work for you should constantly challenge you, so that you can become as good as you can be
Small negative situations can be symptomatic of serious underlying problems –> pointing out and staring at problems (no matter how small) is essential – otherwise you risk setting an example of tolerating mediocrity
Your assessment of how responsible parties are doing their jobs should not be based on whether they’re doing it your way but whether they’re doing it in a good way. Don’t expect a person who achieves success one way to do it a different way

If you don’t experience the consequences of your actions, you’ll take less ownership of them –> structure incentives and penalties that encourage people to take full ownership of what they do
Force yourself and the people who work for you to do difficult things. You must stretch yourself if you want to get strong
Care about the people who work for you. Personal contact at times of personal difficulty is a must
The most effective leaders work to 1) open-mindedly seek out the best answers and 2) bring others along as part of that discovery process

Deal with uncertainty through open-minded exploration
Seek the advice of wise others

Hold yourself and your people accountable

If you didn’t make an expectation clear, you can’t hold people accountable for it not being fulfilled. Don’t assume that sth was implicitly understood
Sucked-down phenomenon: a manager chronically fails to properly redesign an area of responsibility to keep himself from having to do the job that others should be capable of doing well <– the manager focuses more on getting tasks done than on operating his machine

Goals, tasks and responsibilities should be reviewed. Before moving forward with a new plan, take the time to reflect on how the machine has been working up till now

11. Perceive and don’t tolerate problems

Every problem you find is an opportunity to improve your machine. Identify and don’t tolerate problems
Celebrate finding out what is not going well so you can make it go better
This initial failure to perceive and not tolerate problems did not happen for lack of caring; it happened because most of the people in the process paid more attention to getting the tasks done than assessing whether the goals were being achieved. They had become more like rubber stampers than craftsmen
Worrying about what can go wrong will protect you and not worrying about what will go wrong will leave you exposed
Watch out for the “frog in the boiling water syndrome”: people have a strong tendency to slowly get used to unacceptable things that would shock them if they saw them with fresh eyes
Beware of groupthink: the fact that no one seems concerned doesn’t mean nothing is wrong
Compare how the outcomes are lining up with your goals
Be very specific about problems. Start with the specifics and then observe patterns
In some cases, people accept unacceptable problems because they are perceived as too difficult to fix. Not fixing them will lead to more stress, more work and chronic bad outcomes
First, note the problem; then determine who the responsible parties to raise it to are; and finally decide when the right time to discuss it is –> what, who, when

Basado en Principles. Ray Dalio. Editorial Simon & Schuster (2017)