The Importance of Leadership for our Collective Future
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I have been enjoying Ray Dalio’s book “The Changing World Order.” Ray is a master at making complicated topics simple, and I especially appreciate his approach towards looking at global issues, which are typically analyzed by academics, from the perspective of a businessman. So much of what he writes is removed from the realm of theory and there is a practical evaluation of his ideas. Ray built one of the largest hedge funds in the world by being correct about world events much more often than he is incorrect; and so, when he speaks, I pay extra careful attention to his ideas.

What particularly struck me about his book is the way he has emphasized the importance of human capital (what he calls “Human Factor Determinates”) in influencing the future. This importance applies not only to countries, but also to states, local communities, businesses, families, and individuals. 

Ray has clearly pinpointed that large scale collective success begins at an individual level, and the sum of individual choices is a determining factor for group success. He highlights the importance of individual character by saying:

“History has shown that the way people are with themselves, and others is the most important determinant. By that I mean whether they hold themselves accountable to high standards of behavior, whether they are self-disciplined, and whether they are civil with others… character, common sense, creativity, and consideration in most people make for a productive society.”

Ray also knows that culture is an indispensable trait in developing human capital:

“As the saying goes, ‘culture is destiny.’ Cultural differences – differences in how people believe they should be with each other – matter enormously. All societies [businesses, communities, families] create cultures based on how they think reality works, and they all provide principles for guiding how people should deal with reality, and most importantly, how they should deal with each other.”

Ray then summarizes this section by saying: “everything I’ve mentioned so far is influenced by the people in leadership positions.” 

This should come as a great challenge as we understand the importance of our role as a leader in developing the character of the individuals on our team, setting the culture for our organization, and continuing to lead with vision, wisdom, and the same courage of character we expect from others. Leadership is the key to developing human capital, and human capital is key for the success of your family, organization, community, and our collective future.

Here are questions I ask myself:
– Do I approach people with love, even when we have opposing viewpoints?
– Do I hold myself to a standard of excellence even when no one else is looking?
– Do I lead my family with the same care and passion that I lead with at work, or does my family only get the leftovers?
– If everyone acted like me (not thought like me), what kind of society would we have?

Let’s rise above and lead.

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