12. Diagnose problems to get at their root causes
- Identify the root causes. Moving on to fix problems without getting at their root causes is a recipe for continued failure
- The most common mistake I see people make is dealing with their problems as one-offs rather than using them to diagnose how their machine is working so that they can improve it
- The second most common mistake people make is to depersonalize the diagnosis
- The third biggest reason for failure is to not connect what one is learning in one diagnosis to what was learned in prior ones
- Bad outcomes don’t just happen; they occur because specific people make, or fail to make, specific decisions
- If the outcome is bad, is the responsible party incapable and/or is the design bad? Why didn’t things go as they should have? Is the root cause a pattern?
- If a person is chronically failing, it is due to a lack of training or a lack of ability
- Evaluate the merits of a past decision based not on what you know now but only on what you could have reasonably known at the time the decision was made
- It’s one thing to point out a problem; it’s another to have an accurate diagnosis and a quality solution
- Distinguish between a capacity issue and a capability issue: imagine how the person would perform at that particular function if they had ample capacity
- Reasons why managers fall short of their goals: 1. too distant; 2. don’t perceive bad quality; 3. lost sight of how bad things have become because they have got used to it; 4. large egos: can’t bear to admit they are unable to solve their own problems; 5. fear adverse consequences from admitting failure
- Distinguish proximate causes from root causes. It is your job as a manager to get at truth and excellence, not to make people happy
13. Design improvements to your machine to get around your problems
- Once you’ve successfully diagnosed the problems, design paths for solving them
- Build a machine by observing what you’re doing and why, extrapolating the relevant principles from the cases at hand, and systemizing that process
- Create great decision-making machines by thinking through the criteria you are using to make decisions while you are making them. Build your most important principles into habits
- I ask myself how I would handle another one of those situations and write down my principles for doing so
- Systemized, evidence-based decision making will radically improve the quality of management
- Without strong oversight, there is potential for inadequate quality control, inadequate training and inadequate appreciation of excellent work. Never just trust people to do their jobs well
- Make sure the people at the top of each pyramid have the skills and focus to manage their direct reports and a deep understanding of their jobs
- You need to build a perpetual motion machine that can work well without you
- Help good people perform better, not failing people reach the bar
- Think about both the big picture and the granular details, and understand the connections between them. Determine what’s important and what’s unimportant at each level
- Constantly think about how to produce leverage –> maximize my output per hour
14. Do what you set out to do
- Most of success comes from doing the mundane and often distasteful stuff, and pushing hard over a long time
- Think about how your tasks connect to your goals. Focus on the goal, be excited about achieving it and recognize that doing some undesirable tasks to achieve the goal is required
- Don’t act before thinking. Take the time to come up with a game plan
- Other than working harder for longer hours: 1) have fewer things to do by prioritizing and saying no, 2) find the right people to delegate to, and 3) improve your productivity
- “It is what it is” –> figure out what to do about it and not spend time moaning about how I wish it were different
- Winston Churchill: “Success consists of going from failure to failure without loss of enthusiasm”. Enjoy this process of careening between success and failure because it will determine your trajectory
- There’s nothing you can’t accomplish if you think creatively and have the character to do the difficult things
- Allow time for rest and renovation
15. Use tools and protocols to shape how work is done
- There’s a big difference between wanting to do sth and actually being able to do it. It won’t happen until the proper habits are developed
- Foster an environment of confidence and fairness by having clearly-stated principles that are implemented in tools and protocols so that the conclusions reached can be assessed by tracking the logic and data behind them
- Systems that combine human and computer intelligence to program principles into algorithms that substantially improve decision making
16. Don’t overlook governance!
- To be successful, all organizations must have checks (people who check on other people to make sure they’re performing well) and balances (of power)
- It is especially important that governance system is more powerful than any individual – make sure that no one is more powerful than the system or so important that they are irreplaceable
- Reporting lines of the board (those doing the oversight) must be independent of the reporting lines of the CEOs (those doing the management)
Putting it all together
Make your work and your passion one and the same. Struggle well with others on your common mission. Savor both your struggles and your rewards
- Work with others to get: 1) leverage to accomplish our chosen missions in bigger and better ways than we could alone; 2) quality relationships; 3) money
- The relative importance of these three things varies by person –> determine the quantities and mix you want. They are mutually supportive
- “Approach that worked for me: an idea meritocracy in which meaningful work and meaningful relationships are the goals and radical truth and radical transparency are the ways of achieving them”
- An idea meritocracy requires people to do three things: 1) put their honest thoughts on the table for everyone to see; 2) have thoughtful disagreements where there are quality back-and-forths in which people evolve their thinking to come up with the best collective answers possible, and 3) abide by idea-meritocratic ways of getting past the remaining disagreements (such as believability-weighted decision making)
Decide what you want to get out of life and what you want to give
Basado en Principles. Ray Dalio. Editorial Simon & Schuster (2017)
