Mental Models for Any Time

If you’re like me, your mind has been overloaded by information recently. As a result, I’ve been trying to use this pandemic to build better mental models and become a better thinker overall.

You can think of mental models as simply a way to understand what’s going on in the world and make sense of complexity. The goal is to make better decisions when your mind would otherwise be overwhelmed by details.

My go-to resource (for a long time now) for becoming a better thinker and developing helpful mental models is Farnam Street. They recently published a post titled “Mental Models For a Pandemic” that’s honestly useful anytime but especially right now. I’d encourage everyone to give it a read and try to really grasp the concepts.

Two concepts, in particular, stood out in the piece—inversion and “Black Swan” thinking.

Finally, on a day-to-day basis, trying to make small decisions with incomplete information, you can use inversion. You can look at the problem backwards. When the best way forward is far from clear, you ask yourself what you could do to make things worse, and then avoid doing those things.

Farnam Street in Mental Models for a Pandemic

Regarding “Black Swan” thinking, this is particularly top of mind as I’m reading Antifragile by Nassim Taleb, the author that popularized the term “black swan.” As Taleb defines it, a black swan event has three characteristics:

  1. It is an outlier, as it lies outside the realm of regular expectations, because nothing in the past can convincingly point to its possibility.
  2. It carries an extreme impact
  3. In spite of its outlier status, human nature makes us concoct explanations for its occurrence after the fact, making it explainable and predictable.

Specifically on the third item, there will undoubtedly be many post-dictions (explanations after the fact) that attempt to rationalize COVID-19. The more useful approach isn’t to try to predict the next pandemic. It’s to understand the fragilities that COVID-19 has exposed and attempt to move towards antifragility.

Two Criteria for Believability

Back in 2017, I read Principles by Ray Dalio. It has since become one of my favorite professional books of all time and one I’d certainly recommend to anyone.

Dalio ran Bridgewater Associates, the world’s largest hedge fund, for many years and created a unique culture that he describes in the book. A key concept of Principles is the idea of believability and making decisions within a group.

The problem with a democracy is that it assumes that everyone’s views are equally valuable.

Ray Dalio

(I took “Democracy” in the above quote to mean “consensus-driven decisions,” not “democracy” as a political construct.)

This idea resurfaced in my mind after listening to a recent podcast from Pat Sherwood where he discusses this idea in-depth.

Bridgewater has built a culture Dalio calls an idea meritocracy. Everyone is free to have an opinion in any decision, and the overwhelming majority of conversations and meetings are made public within the company through recordings. This isn’t inherently unique as many companies are moving towards a more transparent model. The unique part is how Bridgewater comes to a decision.

They practice believability-weighted decisions where everyone’s opinion is not counted equally. Individuals with unique expertise, a track record of success, and/or a special investment of time, energy, or resources in a given area are weighted higher than others.

I’ll share a large chunk from the book that summarizes this approach well:

In typical organizations, most decisions are made either autocratically, by a top down leader, or democractically, where everyone shares their opinions and those opinions that have the most support are implemented. Both systems produce inferior decision-making.

That’s because the best decisions are made by an idea meritocracy with believability-weighted decision making in which the most capable people work through their disagreements with other capable people who have thought independently about what is true and what to do about it. It is far better to weigh the opinions of more capable decision makers more heavily than those of less capable decision makers.

…How do you determine who is capable at what? The most believable opinions are those of people who:

1. Have repeatedly and successfully accomplished the thing in question.

2. Have demonstrated they can logically explain their cause and effect relationships behind their conclusions.

Principles, page 370

I find myself coming back to those two criteria quite often when I’m weighing in on a conversation. It’s easy to weigh in and express ideas, but it’s often not clear that those ideas are backed up by experience and logic.

In his podcast, Sherwood mentioned a CrossFit article titled “Conjecture, Hypothesis, Theory, Law: The Basis of Rational Argument.” This goes hand in hand with the concept of believability.

I’d highly encourage everyone to read Principles if you’re interested in running a high-performing team or just making better personal decisions. For a teaser, you can listen to Pat’s podcast or the Recode Decode interview with Dalio. Also, read the interesting story about how Principles came into being as an actual book.

How to Avoid Decision Fatigue by Setting Default Habits

Which internet browser do you use? Chrome, Safari, Firefox, Internet Explorer?

When I read Originals by Adam Grant, one of the most surprising studies involved just that—your browser. It turns out, your browser can be an indication of conformity. Grant references a study conducted by Cornerstone OnDemand. In the study, they asked customer support professionals about various aspects of their work, and they found a link between which browser the employee used and their level of performance at work.

Grant goes on to hypothesize that the link between browser and performance has to do with defaults. Internet Explorer comes pre-installed on all Windows machines. Likewise, Safari is pre-installed on Macs. If you use one of these browsers, you’re effectively saying “The default is good enough for me.”

On the other hand, Chrome and Firefox are both available for free download, but you have to actively go out and install them on your computer. It only takes a few minutes, but it requires you to actively think “I wonder if there is something better out there.”

The takeaway from the study (and Grant’s book Originals) isn’t that we should all go out and change our browsers. Instead, the takeaway is that we should question default decisions.

Continue reading “How to Avoid Decision Fatigue by Setting Default Habits”

How to Make Better Decisions Based on Science

This post was originally written for the Crew blog.

2+2=

Unless you’re a cyborg, you couldn’t help but think of the number “4″ when you saw the above expression. In the same way, the partial phrase “bread and” leaves you with the word “butter” on the tip of your tongue. That’s no accident.

Our brains make thousands of decisions every day. Many of them (like whether you want cream and sugar in your coffee) seem to be automatic. Others (like where you want to go for dinner) can be a bit more taxing and require mental effort.

Research has identified two seemingly separate “systems” of the brain responsible for decision-making. In order to make better decisions, we need to understand what each of these systems is responsible for and how we can shift from one to the other.

Continue reading “How to Make Better Decisions Based on Science”

Using Constraints to Make Better Decisions (Like Walking Away From $2 Million)

Could you walk away from $2 million? How hard of a decision do you think that would be?

If you’re Biz Stone, co-founder of Twitter, the decision is apparently easy. “Of course!” you might say. Stone now has more than a few million in the bank thanks to his role in the social sharing company. However, Stone turned down millions of dollars when he was still poor before Twitter even came into existence.

It was October of 2005, and Stone was working at Google1. He joined the team two years prior to work on Blogger, a blogging software built by Ev Williams.

Stone would need to put in two more years before his stock options fully vested. At that time, Google was skyrocketing in popularity meaning Stone’s options were worth about $2 million.

Yet, on that day in 2005, Stone was quitting his job ready to walk away with nothing in order to join Ev on his new venture, a company called Odeo, which would later become Twitter.

To Stone, the decision was actually quite simple. He had joined Google with one goal in mind: work with Ev Williams. Since Ev had left to pursue other projects, it was time for Stone to move on as well. As Stone put it to his wife, “We didn’t move out to California so I could work at Google. We moved out here so I could work with Ev.”

To make a hard decision, Stone asked a simple question: Is staying at Google accomplishing what I set out to do in California. The answer was obviously “No.”

Stone’s simple question is a type of constraint that helped to guide his decision making.

We typically think of constraints as a negative thing. In the land of plentiful options, constraints represent a step in the wrong direction. But, when used consistently and correctly, constraints can actually help simplify many aspects of your life from what to have for dinner to whether or not you want to walk away from $2 million.

Continue reading “Using Constraints to Make Better Decisions (Like Walking Away From $2 Million)”