This principle is useful in any situation--with family, friends, superiors, subordinates, and peers. As an action that can be applied in every interpersonal interaction, it is of course vital for a strong leader to be able to do. A leader must really seek to understand his subordinates, to build on the bond of trust that his personal principles originally instilled in them. He must understand his superiors, in order to carry out their orders to the best of his abilities.
Understanding first is really the interpersonal display of the first three personal principles. Once you understand yourself, you can extend that understanding to other people. But without that strong personal base, it will seem a shallow attempt to manipulate. If the win/win is a business attitude, understanding is a personal one, and probably the most important principle so far.
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