The Blueprint for Process Design: Ray Dalio’s 5 Step Process
When it comes to designing and building Processes, I like to use Ray Dalio’s 5 Step Process as the blueprint. Ray is the founder of Bridgewater, one of the world’s top investment firm that manages more than $160 billion in assets, and is also the author of Principles, a book that outlines the life and work principles that helped him become successful.
Step 1: Have Clear Goals
The first and most crucial step is to have clear goals. Why do we need clear goals, you ask? Imagine walking down a path without a destination and ending up where you don’t want to be, perhaps a haunted psych ward.
Your end goal gives you direction.
When people come to me and ask me what they should do and which decision they should make, I always ask them what their goal is and tell them to pick the one that gets them closer to achieving that goal.
Having a goal helps cut out 99% of the noise that don’t matter so you can make quicker and more focused decisions.
Step 2 & 3: Identify and Accurately Diagnose Problems That Stand in Your Way
Once you have set a direction, the next step is to know where you are right now, your starting point. Identifying and accurately diagnosing problems is an exercise in risk mitigation, and you to do that well, you have to be honest, practical, and realistic with yourself.
Be honest with yourself and your team, audit the skills and resources you currently have to see where you stand. Doing this helps you understand the width of the gap (distance) between you and your goals and identify the potential problems that will arise along your journey.
Problems appear as problems because you are not ready, where you do not have the right skills, team, or experience.
When identifying problems, think about your weak points and every single worse case scenario that could possibly happen. List them down and arrange by degree of severity and the stage of your journey to achieving your goals at which those problems would appear.
Diagnosing the problems you identified and getting to their root cause requires a clear understanding of reality and how things work. Because most of us operate on a limited number of mental models, we are biased in understanding why a problem appears. To counter your own biases, create hypotheses for why each problem occurs, test them, and find ways to disprove your assumptions.
If you know the enemy and know yourself, your victory will not stand in doubt; if you know Heaven and know Earth, you may make your victory complete. — The Art of War
Step 4: Design Plans and Processes to Overcome Your Problems
This is the fun part where you get to figure out ways to overcome your problems. There are typically more than one way to solve a problem, and it depends on what resources you have and what additional help you can get.
Keep in mind that overcoming the problems help move you closer to your goal, and is not just for the sake of getting it out of the way. Be sure to think of second and third-order consequences and set yourself up for success. Surely you don’t want more problems to crop up by solving this one problem.
Visualize your Processes and Plans in as much detail as possible, write them down and make sure everyone in your team understands the Processes and Plans. Bonus points if you can keep it elegant and simple. Vague plans will only raise doubts and uncertainty when it is time to face your problems.
Step 5: Do Whatever it Takes and Push Through to Completion
A lot of time has been invested upfront to come up with your Plans and Processes. Going through all that work and not putting them into action will just be a complete waste of time. Not giving it your 110% effort will also be a complete waste of time and resources.
If you are a visionary who isn’t great at execution, find someone with great work ethic and discipline who can, and will, do whatever it takes to execute your Plan and Process until you achieve your goal. Everyone involved needs to have conviction that the Plan and Process will work out and all the problems will be overcome.
To ensure that your Plan/Process is working, establish clear metrics to track your progress and keep yourself accountable. Knowing where you stand and the reality of the situation at all times is the one thing every entrepreneur should do.
Most importantly, don’t give up until you’ve accomplished your goal.
Share your thoughts!
Have you read the book, Principles, by Ray Dalio? What are some of the nuggets of wisdom that you picked up from the book?
Join the PW Global Entrepreneurs Group on LinkedIn and share your thoughts with a community of top entrepreneurs and social leaders from around the world, where we learn and share how to scale our actions and 10x our revenue and impact, all from the proven wisdom of the people who’ve been there and done that.
Don’t lose out when I publish my next article. Follow me to stay updated. Thank you for your attention.
