Developing Mental Models

Charlie Munger provides some insight into why developing mental models is important. He states, “Well, the first rule is that you can’t really know anything if you just remember isolated facts and try and bang’em back. If the facts don’t hang together on a latticework of theory, you don’t have them in a usable form. You’ve got to have mental models in your head. And you’ve got to array your experience both vicarious and direct on this latticework of models.” Working toward developing mental models to improve your thinking is critical for your success.

Having a latticework of proven models will help you make better decisions. But where to begin? There are certain mental models that broadly apply in many situations. I have found the following models to be extremely useful in many different situations.

However, you need to realize that each one of the following models needs to be ‘road tested’ and understood by you. You will not get the same value from these models unless you have personalized and contextualized them. How will you know when you can move on to the next one? When the model you learned pops into your head naturally at the appropriate time and in the right situation.

INVERSE THINKING

Everyone would benefit from thinking about problems both forward and backward. In other words, you are thinking about the opposite of what you want. So instead of being right more, you are trying to be wrong less.

It may seem counterintuitive, thinking about the opposite of what you want, but it is an essential tool of many great leaders. It is also a good way to avoid certain biases like confirmation bias. One question to ask that would be an example of inverse thinking would be, “What if the evidence did not confirm what you believe or think to be true?” Or perhaps you focus on what you want to avoid instead of focusing on how to achieve success? We can learn many lessons from studying why people fail as they can from why they succeed.

Common applications to use this type of thinking every day.

  • What are the qualities I want in my ideal spouse?
  • Inverse: What are the qualities or behaviors that would ruin a marriage, or that you don’t want in your ideal spouse? Now you are identifying ways to avoid a bad relationship.
  • What are ways I could improve my financial situation?
  • Inverse: What are the ways I could make my financial situation worse? Now you are focusing on how not to lose money.
  • How can we ensure success? What would make this project or product a success.
  • Inverse: What are the ways it could fail? By doing a pre-Mortem, you are identifying failure points and then proactively planning to prevent them.

Remember, avoiding stupidity is easier than seeking brilliance.

FIRST PRINCIPLES

By arguing from first principles, you are striving to be wrong less by challenging the assumptions from which your conclusions are based. What are you sure is true? Using this process encourages you to break down the problem into its most fundamental elements.

Ideally, you are starting with a blank slate, disregarding conventional wisdom.

Let’s say you have a new product that will come to market this year. First, identify your company’s assumptions. Once you have a set of the critical assumptions, then question their validity, and if possible, test them in the real world. Finally, adjust your strategy appropriately based on this information.

Assumption: There will be demand for our product. Why? It will solve a customer problem.

Challenge that assumption: What if it doesn’t solve the customer’s problem as elegantly and easily as another product? What if this is not an important problem for the customer?

A common mistake that individuals or companies make is they do too much work before testing their assumptions. If the assumptions turn out to be wrong, their work is worthless, and the time spent has been wasted. Don’t fall into the trap of premature optimization. Instead, use the minimum viable product approach to develop products or services with just enough features to be tested.

OCCAM’S RAZOR

This model states that the simplest explanation is most likely true. There are many models that have the term ‘razor’, which illustrates the idea that it shaves off unnecessary assumptions.

Einstein referred to Occam’s razor in his famous quote that everything should be made as simple as it can be, but not simpler. As a result, you are more confident in your decisions since they are based on the explanation with the fewest moving parts.

Remember, when you hear hoof beats think horses, not zebras.

These are just a few of the many models I would encourage everyone to develop and use. But for them to be useful they must be put into practice and deeply understood. Otherwise, they will likely not come to mind when needed.  

There is a famous saying about the right time to plant a tree, “The best time to plant a tree was 20 years ago. The second best time is now.” The same could be said about building mental models. What are you waiting for, start building a latticework of useful models that will be sure to improve your thinking and decision-making. Remember that developing mental models to improve your thinking is critical to your ongoing success.

To explore other ideas around your thought process I would encourage you to read our April 13 article on why leaders are not good at understanding what they don’t know. You may also want to read my recent article on how focus leads to success.

ABOUT CHARLES GOOD

Charles Good is the president of The Institute for Management Studies, which provides transformational learning experiences that drive behavioral change and develop exceptional leaders. Charles is an innovative and resourceful leader who specializes in bringing people together to develop creative organizational and talent strategies that enable business results. His areas of expertise include assessing organizational skill gaps and leading the design, creation and delivery of high impact, innovative learning solutions that achieve business goals.

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