"The 5 Steps Close-Up" from the page 26 of "Principles" by Ray Dalio

The 5 Steps Close-Up

1) Setting Goals

You can have virtually anything what you want, but you can't have anything you want.

To achieve your goals, you have to prioritize, and that includes rejecting good alternatives.

It is important not to confuse "goals" and "desires."

Goals are the things that you really want to achieve, while desires are things you want that can prevent you from reaching your goals.

Avoid setting goals based on what you think you can achieve.

Set goals without yet assessing whether or not you can achieve them.

Unlike in school, in life you don't have to come up with all the right answers. You can ask the people around you for help--or even ask them to do the things you don't do well.

In other words, there is almost no reason not to succeed if you take the attitude of 1) total flexibility--good answers can come from anyone or anywhere (and in fact, as I have mentioned, there are more good answers "out there" than there are in you) and 2) total accountability: regardless of where the good answers come from, it's your job to find them.

2) Identifying and Not Tolerating Problems

The more painful the problem, the louder it is screaming. In order to be successful, you have to 1) perceive problems and 2) not tolerate them.

If you don't dentify your problems, you won't solve them, so you won't move forward toward achieving your goals. As a result, it is essential to bring problems to the surface.

Most people don't like to do this. But most successful people know that they have to do this.

The most common reasons people don't successfully identify their problems are generally rooted either in a lack of will or in a lack of talent or skill:

• They can be "harsh realities" that are unpleasant to look at, so people often subconsciously put them "out of sight" so they will be "out of mind."
• Thinking about problems that are difficult to solve can produce anxiety that stands in the way of progress.
• People often worry more about appearing to not have problems than about achieving their desired results, and therefore avoid recognizing that their own mistakes and/or weaknesses are causing the problems. (omitted)
• Sometimes people are simply not perceptive enough to see the problems.
• Some people are unable to distinguish big problems from small ones. Since nothing is perfect, it is impossible to identify an infinite number of problems everywhere. If you are unable to distinguish the big problems from the little ones, you can't "successfully" (i.e., in a practical way) identify problems.

When identifying problems, it is important to remain centered and logical.

While it can be tempting to react emotionally to problems and seek sympathy or blame others, this accomplishes nothing.

Remember that identifying problems is like finding gems embedded in puzzles; if you solve the puzzles you will get the gems that will make your life much better. Doing this continuously will lead to your rapid evolution. So, if you're logical, you really should get excited about finding problems because identifying them will bring you closer to your goals.

3) Diagnosing the Problems

You will be much more effective if you focus on diagnosis and design rather than jumping to solutions.

You must be calm and logical.

You must get at the root causes.

Identifying the real root causes of your problems is essential because you can eliminate your problems only by removing their root causes. In other words, you must understand, accept, and successfully deal with reality in order to move toward your goals.

Recognizing and learning from one's mistakes and the mistakes of others who affect outcomes is critical to eliminating problems.

Many problems are caused by people's mistakes. But people often find it difficult to identify and accept their own mistakes. Sometimes it's because they're blind to them, but more often it's because ego and shortsightedness make discovering their mistakes and weaknesses painful.

(omitted) More than anything else, what differentiate people who live up to their potential from those who don't is a willingness to look at themselves and others objectively.

I call the pain that comes from looking at yourself and others objectively "growing pains," because it is the pain that accompanies personal growth. No pain, no gain. Of course, anyone who really understands that no one is perfect and that these discoveries are essential for personal growth finds that these discoveries elicit "growing pleasures." But it seems to be in our nature to overly focus on short-term gratification rather than long-term satisfaction--on first-order rather than second- or third-order consequences--so the connection between this behavior and the rewards it brings doesn't come naturally. However, if you can make this connection, such moments will begin to elicit pleasure rather than pain. It is similar to how exercise eventually becomes pleasurable for people who hardwire the connection between exercise and its benefits.

Remember that:

    Pain + Reflection = Progress

(omitted) There is no getting around the fact that achieving success requires getting at the root causes of all important problems, and people's mistakes and weaknesses are sometimes the root causes. So to be successful, you must be willing to look at your own behavior and the behavior of others as possible causes of problems.

The most important qualities for successfully diagnosing problems are logic, the ability to see multiple possibilities, and the willingness to touch people's nerves to overcome the ego barriers that stand in the way of truth.

4) Designing the Plan (Determining the Solutions)

(omitted) most of the movement towards your goals comes from designing how to remove the root causes of your problems. Problems are great because they are very specific impediments, so you know that you will move forward if you can identify and eliminate their root causes.

Creating a design is like writing a movie script in that you visualize who will do what through time in order to achieve the goal.

Visualize the goal or problem standing in your way, and then visualize practical solutions. When designing solutions, the objective is to change how you do things so that problems don't recur--or recur so often. Think about each problem indivisually, and as the product of root causes--like the outcomes procured by a machine. Then think about how the machine should be changed to produce good outcomes rather than bad ones. There are typically many paths toward achieving your goals, and you need to find only one way of them that works, so it's almost always doable.

But an effective design requires thinking things through and visualizing how things will come together and unfold over time. It's essential to visualize the story of where you have been (or what you have done) that has led you to where you are now and what will happen sequentially in the future to lead you to your goals. You should visualize this plan though time, like watching a movie that connects your past, present, and future.

Then write down the plan so you don't lose sight of it, and include who needs to do what and when. The list of tasks falls out from this story (i.e., the plan), but they are not the same. The story, or plan, is what connects your goals to the tasks. For you to succeed, you must not lose sight of the goals or the story while focusing on the tasks; you must constantly refer back and forth.

When designing your plan, think about the timeliness of various interconnected tasks. (omitted) This is an iterative process, (omitted)

Being as specific as possible (e.g., specifying who will do what and when) allows you to visualize how the design will work at both a big-picture level and in detail. It will also give you and others the to-do lists and target dates that will help direct you.

People successful with this stage have an ability to visualize and a practical understanding of how things really work. Remember, you don't have to process all these qualities if you have someone to help you with the ones you are missing.

Remember: Designing precedes doing! The design will give you your to-do list (i.e., the tasks).

5) Doing the Tasks

Next, you and the others you need to rely on have to do the tasks that will get you to your goals. Great planners who don’t carry out their plans go nowhere.

… it is critical to know each day what you need to do and have the discipline to do it. People with good work habits have to-do lists that are reasonably prioritized, and they make themselves do what needs to be done. By contrast, people with poor work habits almost randomly react to the stuff that comes at them, or they can’t bring themselves to do the things they need to do but don’t like to do (or are unable to do).

You need to know whether you (and others) are following the plan, so you should establish clear benchmarks.

As with the other steps, if you aren’t good at this step, get help.

Design and tasks have no purpose other than to achieve your goals. Said differently, goals are the sole purpose of designs and tasks.


5-Step Process: Qualities Needed

1. Set Goals: Higher-level thinking, synthesis, visualization, prioritization
2. Identify and don’t tolerate problems: Perception, intolerance of badness (regardless of severity), synthesis
3. Diagnose the problems to root causes: Hyper-logical, willing to “touch the nerve,” seeing multiple possibilities
4. Design a plan for eliminating the problems: Visualization, practicality, creativity
5. Do what is set out in the plan: Self-discipline, good work habits, results orientation, proactivity

In a nutshell, my 5-Step process for achieving what you want is:
(Your) Values -->1) Goals -->2) Problems -->3) Diagnoses -->4) Designs -->5) Tasks

As you design and implement your plan to achieve your goals, you may find it helpful to consider that:

• Life is like a game where you seek to overcome the obstacles that stand in the way of achieving your goals;
• You get better at this game through practice;
• The game consists of a series of choices that have consequences;
• You can’t stop the problems and choices from coming at you, so it’s better to learn how to deal with them;
• You have the freedom to make whether choices you want, though it’s best to be mindful of their consequences;
• The pain of problems is a call to find solutions rather than a reason for unhappiness and inaction, so it’s silly, pointless, and harmful to be upset at the problems and choices that come at you (though it’s understandable);
• We all evolve at different paces, and it’s up to you to decide the pace at which you want to evolve (It’s best to spend most of your time in the stretch zone, rather than comfort or panic zone.);
• The process goes better if you are as accurate as possible in all aspects, including assessing your strengths and weaknesses and adapting to them.

… we must be hyperrealistic and hypertruthful.

…and the biggest impediment is people’s reluctance to face their own mistakes and weaknesses and those of others.

Bridgewater is based on the belief that both meaningful work and meaningful relationships are required to be happy and successful. So, our relationships, like our work, must be excellent; as a result, we expect people to be extremely considerate and caring with each other. This does not mean being soft on each other, especially if that means avoiding harsh realities to avoid causing discomfort. It means true caring, which requires recognizing and successfully dealing with our realities, whatever they are.

Underlines are added by the author.