mental models – a primer

resources: 

lists of mental models

explanations of mental models

 

purpose of this post: provide resources to understand the utility, use, and breadth of mental models  

long term goal:

develop a full “dictionary” of mental models, and questions to help leverage them

Basics

What are they?

Explanation #1:  A mental model is just a concept you can use to help try to explain things. There are tens of thousands of mental models, and every discipline has their own set that you can learn through coursework, mentorship, or first-hand experience. Gabriel Weinberg

Explanation #2: It’s the big, basic ideas of all the truly fundamental academic disciplines. The stuff you should have learned in the “101” course of each major subject but probably didn’t. These are the true general principles that underlie most of what’s going on in the world.

These are the winning ideas. For all of the “bestselling” crap that is touted as the new thing each year, there is almost certainly a bigger, more fundamental, and more broadly applicable underlying idea that we already knew about! The “new idea” is thus an application of old ideas, packaged into a new format.

Yet we tend to spend the majority of time keeping up with the “new” at the expense of learning the “old”! This is truly nuts.

The mental-models approach inverts the process to the way it should be: learning the Big Stuff deeply and then using that powerful database every single day. Farnam Street

Explanation #3: What are mental models? A mental model is an explanation of how something works. The phrase “mental model” is an overarching term for any sort of concept, framework, or worldview that you carry around in your mind.

Mental models help you understand life…Mental models also guide your perception and behavior. They are the thinking tools that you use to understand life, make decisions, and solve problems.  James Clear

Why use them?

Explanation #1: Every human can assimilate only so much information through their senses and has only so much memory and processing power. Humans must make decisions constantly. Charlie Munger’s belief is that by learning and thinking using the big models which have been developed by the very best minds, you can become “worldly wise.” Tren Griffin

Explanation #2: Charlie Munger is very focused on acquiring a deep understanding of these models so they can help him better understand the world. He believes that it is through the application of models in a varied range of settings in life that genuine learning takes place. Mistakes, folly and foibles are an inevitable part of this process. Tren Griffin

Explanation #3: Munger believes that by applying a lattice of models from disciplines like behavioral economics an investor can discover decision-making errors. Perfection is not possible to achieve, but following a better decision making process is possible. Focusing on having a sound decision making process rather than outcomes in any given case is wise. In the long term, it is a better process that will generate the better overall result. Tren Griffin

Explanation #4: To use worldly wisdom properly you must be prepared to be a contrarian. Being a contrarian will inevitably sometimes make you unpopular or lonely.  Accepting this solitary state of affairs at times is essential since it is mathematically provable that you cannot outperform the crowd if you are the crowd. Tren Griffin

Explanation #5: If we are prioritize learning, we should focus on things that change slowly.

The models that come from hard science and engineering are the most reliable models on this Earth. And engineering quality control – at least the guts of it that matters to you and me and people who are not professional engineers – is very much based on the elementary mathematics of Fermat and Pascal: It costs so much and you get so much less likelihood of it breaking if you spend this much…

And, of course, the engineering idea of a backup system is a very powerful idea. The engineering idea of breakpoints – that’s a very powerful model, too. The notion of a critical mass – that comes out of physics – is a very powerful model.

Farnam Street

How to add them to your repertoire and use them?

Explanation #1: To actually be useful, however, you have to apply them in the right context at the right time. And for that to happen naturally, you have to know them well and practice using them…When you have a particular problem in front of you, you can go down [your] list, and see if any of the models could possibly apply. Gabriel Weinberg

Explanation #2: The overarching goal is to build a powerful “tree” of the mind with strong and deep roots, a massive trunk, and lots of sturdy branches. We use this tree to hang the “leaves” of experience we acquire, directly and vicariously, throughout our lifetimes: the scenarios, decisions, problems, and solutions arising in any human life. Farnam Street

Explanation #3: And remember: Building your latticework is a lifelong project. Stick with it, and you’ll find that your ability to understand reality, make consistently good decisions, and help those you love will always be improving. Farnam Street

Explanation #4: The process of accumulating mental models is somewhat like improving your vision. Each eye can see something on its own. But if you cover one of them, you lose part of the scene. It’s impossible to see the full picture when you’re only looking through one eye.

Similarly, mental models provide an internal picture of how the world works. We should continuously upgrade and improve the quality of this picture. This means reading widely from good books, studying the fundamentals of seemingly unrelated fields, and learning from people with wildly different life experiences.The mind’s eye needs a variety of mental models to piece together a complete picture of how the world works. The more sources you have to draw upon, the clearer your thinking becomes. As the philosopher Alain de Botton notes, “The chief enemy of good decisions is a lack of sufficient perspectives on a problem.” James Clear

How are they limited?

Explanation #1: Even the best models of the world are imperfect. This insight is important to remember if we want to learn how to make decisions and take action on a daily basis. James Clear

Explanation #2: The theory of mental models, however, is not a paragon. It is radically incomplete; and it is likely to have problems and deficiencies. Proponents of rule theories have accused it of every conceivable shortcoming from blatant falsehood to untestability. It postulates that human reasoners can in principle see the force of counterexamples, and indeed people are able to construct them — a competence that is beyond the power of formal rule theories to explain. The model theory may well be overturned by counterexamples predicted by a superior theory. In which case, it will at least have had the virtue of accounting for its own demise. Princeton

 

 

 

 

 

 

machine reflection (dalio)

resource: ray dalio’s principals – free and paid

purpose: guide your routine reflection on your business, or any other “machine,” you are running to take stock and inspect how it can be improved

Context

“Those who are most successful are capable of “higher level thinking” —i.e., they are able to step back and design a “machine” consisting of the right people doing the right things to get what they want. They are able to assess and improve how their “machine” works by comparing the outcomes that the machine is producing with the goals.” Dalio – Principals, page 22 

machine_image.jpg

“That schematic is meant to convey that your goals will determine the “machine” that you create to achieve them; that machine will produce outcomes that you should compare with your goals to judge how your machine is working. Your “machine” will consist of the design and people you choose to achieve the goals…While having the right design is essential, it is only half the battle. It is equally important to put the right people in each of these positions. They need different qualities to play their positions well… If your outcomes are inconsistent with your goals (e.g., if you are having problems), you need to modify your “machine,” which means that you either have to modify your design/culture or modify your people.” Dalio – Principals, page 22 

“Every organization works like a machine to achieve its goals. This machine produces outcomes. By comparing the outcomes to the goals, those running the machine can see how well the machine is working. This is the feedback loop that those who are responsible for the machine need to run well in order to improve the machine. Based on the feedback, the machine can be adjusted to improve. The machine consists of two big parts—the culture and the people. If the outcomes are inconsistent with the goals, something must be wrong with the machine, which means that something must be wrong with the culture and/or the people. By diagnosing what is wrong, designing improvements and implementing those improvements, the machine will evolve. In short, the evolutionary process is as follows.”Dalio – Principals, page 38

5 step_process.png

 

8 questions after reading

what are the components of the machine you are responsible for?

what is the leading-goal for each of those components?

is that component meeting, exceeding, or failing those goals? how?

if a component is failing, is it due to machine design (i.e. the prescribed process is poorly described/formulated), culture (not able to speak up about problem), information flow, poor goal setting?

who is on each team responsible for those components?

If your machine is producing outcomes that you don’t want, either the design is flawed or the parts/people that you dropped into the design are malfunctioning. Most, but not all, problems happen because 1) it isn’t clear who the “responsible party” is for making sure things go well or 2) the responsible party isn’t handling his or her responsibilities well (in other words, isn’t operating according to the principles to eliminate the problem). Dalio Principals – page 105

is each of those people meeting, exceeding, or failing those goals? how?

if they are failing is due to skills, mindset, capability, or lack of resources?

“If someone is doing their job poorly, consider whether this is due to inadequate learning (i.e., training/experience) or inadequate ability. A weakness due to a lack of experience or training or due to inadequate time can be fixed. A lack of inherent ability cannot.” Dalio –  Principals page 91

with regards to a particular problem, which part of the machine is causing it?

“Think about each problem individually, and as the product of root causes—like the outcomes produced by a machine. Then think about how the machine should be changed to produce good outcomes rather than bad ones. There are typically many paths toward achieving your goals, and you need to find only one of them that works, so it’s almost always doable.” Dalio – Principals, page 33

 


Or just use what Ray Dalio prescribes… page 101-102 principals

 

1) Ask the person who experienced the problem: What suboptimality did you experience?

2) Ask the manager of the area:

  • Is there a clear responsible party for the machine as a whole who can describe the machine to you and answer your questions about how the machine performed compared with expectations?
  • Who owns this responsibility?
  • Do not mask personal responsibility—use specific names.

3) Ask the responsible party: What is the “mental map” of how it was supposed to work?

  •  A “mental map” is essentially the visualization of what should have happened.
  • To be practical, “mental maps” (i.e., the designs that you would have expected would have worked well) should account for the fact that people are imperfect. They should lead to success anyway.

4) Ask the owner of the responsibility: What, if anything, broke in this situation? Were there problems with the design (i.e., who is supposed to do what) or with how the people in the design behaved?

  • Compare the mental map of “what should have happened” to “what did happen” in order to identify the gap.
  • If the machine steps were followed, ask, “Is the machine designed well?” If not, what’s wrong with the machine?5) Ask the people involved why they handled the issue the way they did. What are the proximate causes of the problem (e.g., “Did not do XYZ”)? They will be described using verbs—for example, “Harry did XYZ.” What are the root causes? They will be descriptions. For example: inadequate training/experience, lack of vision, lack of ability, lack of judgment, etc. In other words, root cause is not an action or a reaction—it is a reason.
  • Be willing to touch the nerve.

6) Ask the people involved: Is this broadly consistent with prior patterns (yes/no/unsure)? What is the systematic solution? How should the people / machines / responsibilities evolve as a result of this issue?

  • Confirm that the short-term resolution of the issue has been addressed.
  • Determine the steps to be taken for long-term solutions and who is responsible for thosesteps. Specifically:
    a. Are there responsibilities that need either assigning or greater clarification? b. Are there machine designs that need to be reworked?
    c. Are there people whose fit for their roles needs to be evaluated?

building-in resiliency

resource: On Being – Andrew Zolli: A Shift to Humility (transcript)

12 questions after listening or reading

inventory

in what ways do you currently accept that all things fail?

what systems, processes are in place that demonstrate this acceptance?

“I think the first premise is all things fail. And in fact not only do all things fail, but failure is intrinsic, healthy, normal, and necessary to most complex systems.”

how are you building resiliency and brutal acceptance of failure into your/company/team’s DNA?

what vocabulary are you using to constantly reinforce this?

“We needs systems that can self-reorganize, that are better at sensing emerging disruption. We need systems that encourage cooperation, rather than division. We needs systems that, where a failure in one component of the system doesn’t bring down every other component of the system. Those are really in many ways, they’re sort of a design brief for the 21st century.”

how are systems/machine built so failures and breakdowns are quickly identified?

tactical

how are you building your business/systems/teams to recover, persist, and thrive in the face of change?

which parts of the machine need to know about failures in others?

how are failures communicated?

how have you built your team, technology such that it has excess capacity in wisdom and ability to compensate for inevitable failure?

” Because we’ve so tightly connected all of these systems, it’s important that we have redundancy. It’s important that we have spare capacity. It’s important that we have the right kinds of social networks, so that we can share with each other. It’s important that we have a shared wisdom, a body of knowledge that helps us be more locally self-reliant.”

how is system/team/process X designed fail gracefully? not tearing down others?

“one of the things we need are systems that fail gracefully, that don’t bring down everything else….But this notion of failing gracefully — I mean, it’s a sentence that is true in life as well.”

high-level

what tradeoffs, short/long term, are you willing to make to enable resilience?

“But particularly given the complexity of these things, really what we need to talk about are tradeoffs. So there’s a tradeoff between the agility that comes with short-term thinking and wisdom that comes from long-term thinking.”

how do your relationships, physical health, and physical space enable resilience?

“So the short answer is there are many things that make you or I and the people we know and everyone we know more or less resilient psychologically, psychosocially. Your social networks, the quality of your intimate relationships, the degree to which you both love and experience love. Your access to other kinds of resources, physical resources. Your physical health, your genes and in particular the interaction between your genes and your life experiences.”


Related

David Deustch – Beginning of Infinity

“we cannot create knowledge other than by the fallible method of conjecture and criticism; errors are inevitable, and only error-correcting processes can succeed or continue for long”

“The question about the sources of our knowledge…has always been asked in the spirit of: ‘What are the best sources of our knowledge–the most reliable ones, those which will not lead us into error, and those to which we can and must turn, in case of doubt, as the last court of appeal?’ I propose to assume, instead, that no such ideal sources exist–no more than ideal rulers–and that all ‘sources’ are liable to lead us into error at times. And I propose to replace, therefore, the question of the sources of our knowledge by the entirely different question: ‘How can we hope to detect and eliminate error?’ 

“Some problems are hard, but it is a mistake to confuse hard problems with problems unlikely to be solved. Problems are soluable, and each particular evil is a problem that can be solved. An optimistic civilization is open and not afraid to innovate, and is based on traditions of criticism. Its institutions keep improving, and the most important knowledge that they embody is knowledge of hot to detect and eliminate errors.” 222

intellectual drive reflection

purpose: ensure you are meeting your intellectual needs in a way that enables incremental and continuous progress, rather sprinting and burning out

in what ways are you feeding your intellectual drive (needs?)

how have you been challenged intellectually this past week?

what role is your work playing in the fulfillment your intellectual drive?

how you are “topping off” your intellectual drive outside of work? is this even necessary?

at any point in the past week did you push too far?

did you leave room, hunger, for continued incremental progress next week? or are you feeling burnt out?

the founder’s dilemma’s: part 2, adding team members

resource: the founder’s dilemmas

plus: how to hire (esp idea: “hiring means we failed to execute and need help”)

topic: adding team members

purpose: help (prospective) startup/biz owners by presenting key questions to ask yourself, your partner, your team to avoid pitfalls when adding team members

7 questions to ask yourself and your team:

1) are you willing to sacrifice ease of coordination, and increase the likelihood of conflict, in order to have a larger team?

2) will you get enough leverage out of role X such that they are worth the additional cognitive, communication, complexity overhead?

“the larger the team, the greater the coordination costs and the higher the risk that roles will overlap and cause conflict within the team…each additional person also adds more nodes to the communication network, slows things down, and weakens incentives.” -page 81, founder’s dilemmas

3) do you need a larger team because your business exists in a highly-complex business environment?

“the more complex the environment contingencies faced by the startup, the more need for additional founders. Team’s dealing with complex environments need to process more information; larger teams are better able to…a) absorb and recall more items of information, b) correct more errors in inference and analysis, c) consider more potential solutions, d) bring a broader range of perspectives to bear on the problem.” -page 82, founder’s dilemmas

4) are you hiring for speed (homogeneity)? or …. 

“homogeneity has important benefits, perhaps the most immediate which is speed…it generally take[s] less time to find people who are like you in some important way, [it] also generally takes less time to develop effective working relationships. When  founders share a background, they share a common language that facilitates communication. They have higher confidence that they will be able to develop the deep level of trust that is necessary to become and effective founding team. To some extent, they already understand each other …. It is also easier to access people who are similar to you”  – page 91-92, founder’s dilemmas 

“…teams with homogeneous functional experience tend to have been found in multiple related contexts to be less stable than their heterogeneous counterparts.”- page 93, founder’s dilemmas 

5) …. are you hiring for longevity (diversity)? [this admittedly is a false dichotomy]

“…co founders coming from diverse prior companies were more likely to adopt an ‘exploration’ strategy (developing an innovative product that increased variance within the population of organizations and generated intraindustry variety)”. – page 94, founder’s dilemmas 

“Teams with diverse networks are often more creative and innovative, have better acces to a range of potential investors and corporate partners, and ar able to tap into a wider range of potential employees”- page 94, founder’s dilemmas 

6) how are you enabling flexibility in roles today (to enable speed), and planning for specialization in the future (to enable execution)? how are you planning for division of labor to gracefully evolve? 

“During the early stages of a startup, when there are too many things to do and not enough people and time to do them, when the startup is cash-poor, and when the strategy and business model may have to turn on a dime, having an organization with flexible and overlapping roles – changeable as needed-can be a big advantage….this advantage can become a liability… ” – page 124, 128, founder’s dilemmas

7) where on the egalitarian-to-autocratic spectrum is your ideal decision-making approach with your team? 

egalitarian/consensus: “the members of an egalitarian team ignore their official titles, make decisions collectively by coming to a complete consensus, and act as peers rather than superiors and subordinates.” – page 129, founder’s dilemmas 

hierarchical/autocratic: ” hierarchical teams have a formal process for making decisions and a clear hierarchy, with a single person responsible for final decisions” – page 129, founder’s dilemmas 

 

the founder’s dilemmas: part 1, founding team

resource: the founder’s dilemmas

topics: founding team

purpose: help (prospective) startup/biz owners by presenting key questions to ask yourself, your partner, your team to avoid pitfalls

11 questions to ask yourself and your team:

1) what is your primary motivation, wealth (rich) or control (king)? 

“wealth and control are decoupled for entrepreneurs and indeed, in active conflict. As a result, few founders of high potential startups can achieve both wealth and power”  – page 19, founder’s dilemmas 

“a founder who knows whether wealth or control is his or her primary motivation will have an easier time making decisions and can make consistent decisions that increase the chances of reaching the desired outcome – Rich or King”

page 14, founder’s dilemmas 

 

2) what is your partner(s) primary motivation, wealth (rich) or control (king)? 

3) what is your cofounder’s risk tolerance, personality, time horizon, commitment level, value system, and decision making style? 

“a potential cofounder’s resume may not tell you much about his or her risk tolerance, personality, time horizon, commitment level, and value system. Founders tend to neglect these ‘soft’ factors because they are harder to assess than skill compatibility and function backgrounds, but they can become serious problems even for the most well-matched team.” – page 96, founder’s dilemmas 

4) what are your co-founder(s) collaboration style?

“sharing the idea with a potential co-founder can help the founder articulate and enhance it. ” – page 80, founder’s dilemmas

5) what support/validation does your co-founder(s) provide? is that something you want?

“a core founder who has a strong need for affiliation, validation, or psychological support may seek cofounders, even if they add little capital to the startup.” – page 80, founder’s dilemmas

6) what are your functional backgrounds (ex: product development, marketing, sales, finance, HR, software development, etc..)?

7) what are your gaps/weaknesses? 

“Founding a startup requires the knitting together of all of the functions required to make an organization run effective, from product development to marketing, to sales, to finance, and human resources. Having prior experience in those functions arms the founder with the ability to understand how each one operates on its own and as a part of the larger whole” – page 39, founder’s dilemmas

8) what are your co-founder(s) task preferences? 

“a core founder who has all the requisite skills, contacts, and seed capital but dislikes carrying out one or more of the critical early-stage tasks my look for a co-founder to take on those tasks.” – page 79, founder’s dilemmas

9) what add-on capital do you contribute (social, financial, human)? 

10) where are you lacking?

“social capital is the durable network of social and professional relationships through which founders can identify and asses resources.” – page 47, founder’s dilemmas

“The accumulation of one type of capital can spark a virtuous cycle. Research has shown that people who accumulate more social capital before founding are able to attract more human capital (such as co founders) and financial capital (such as seed capital) with which to launch the startup, and do so more quickly.” – page 48, founder’s dilemmas

“Human capital includes the explicit knowledge derived from formal education and the tacit skills derived from prior experience.” – page 77, founder’s dilemmas

11) how can you maximize shared work experience prior to founding with a team or cofounder?

“teams of prior coworkers were significantly more stable than both teams who had prior social relationship and teams of strangers.” – page 101, founder’s dilemma’s

“across a variety of entrepreneurial contexts, research as shown that teams with greater shared work experience have higher growth rates, higher levels of social integration within the group, and lower risk of company dissolution.” – page 103, founder’s dilemmas

“trying before buying” – page 96, founder’s dilemmas

communication architecture

resource: one on one – a16z

“Perhaps the CEO’s most important operational responsibility is designing and implementing the communication architecture for her company.

The architecture might include the organizational design, meetings, processes, email, yammer and even one-on-one meetings with managers and employees. Absent a well-designed communication architecture, information and ideas will stagnate and your company will degenerate into a bad place to work.

While it is quite possible to design a great communication architecture without one-on-one meetings, in most cases one-on-ones provide an excellent mechanism for information and ideas to flow up the organization and should be part of your design.”

4 questions after reading:

what types of information do you wish to routinely communicate to your team? (i.e. mission, values, objectives, +/- progress against key results, tasks, company news, momentum building)

who is responsible for communicating each type of information?

how frequently do you need to communicate each of these? a daily, weekly, monthly, and yearly basis? 

what is the best mode of communication for each of these? team stand-ups, all-hands, off site, slack, email, 1:1, presentation, etc…