Thinking About Thinking: Tiny Changes, Big Results

BY SHANE PARRISH

How is it we become better at thinking? How is is we learn to make better decisions? And if we can’t make better decisions how is it we learn to avoid stupidity.

A while back I came across an irreverent billionaire named Charlie Munger who taught me how to think better. I learned about behavioral biases but more than that I learned how the big ideas of the world can help you understand problems. I also learned that I needed to prepare to make good decisions in the first place.

When it comes to thinking too many of us focus on the way we think things should be and not enough on the way things are.

Here’s a sketch of the things that have helped me think a little bit better.

Principles

Three of the guiding principles that I follow on my path toward seeking wisdom are:

  1. Go to bed smarter than when you woke up; and
  2. I’m not smart enough to figure everything out myself, so I want to ‘Master the best of what other people have already figured out.’
  3. Ego should be toward the outcome and not toward me being right.

What Matters

Ok … so when it comes to getting better at thinking.

IQ tests don’t really matter. That’s not the type of knowledge or brainpower that makes you better at life, happier, or more successful. It’s a measure sure, but a useless one.

There is no get-smarter-quick plan. Acquiring wisdom, is hard work. (see My answer to What skill should I learn for 1–2 hours a day, that will help me become successful?).

If you want to learn to think better you focus on what you’re doing. I don’t mean spending putting a few 5 minute time chunks of time together to learn something new but focus on understanding the problem. You need to spend time thinking.

Mental Models Are The Key To Understanding

Mental models help you think better because mental models are how we think.

“Mental models are an explanation of how things work. They are how we decide what variables matter in a given situation and how those variables interact with one another. Mental models are how we make sense of the world. (source)”

Your head is already full of mental models of how the world works. What separates good thinkers from great thinkers is: (1) the number of models at their disposal; (2) the accuracy of those models; and (3) how quickly they update their model in the face of feedback.

1. The number of models

There is no one model that explains everything. All models are limited but that doesn’t mean they are not useful. The key is having the right model available when you need it.

If you have a toolbox full of accurate models it increases the odds that you will understand the problem. The extent to which you understand the problem is the extent to which your actions will be correct. The better you understand the problem, the better actions you will choose.

If you’re interested, I’ve listed 113 of the most important mental models , and provided a brief description of them. Some of the models represent how the world works (e.g., evolution, critical mass, Pyrrhic Victory) and some represent how to think (inversion, second-order thinking, the map is not the territory).

The key to the models is you have to apply them outside of the discipline to which you originally learned them. Compound interest, for example, doesn’t only apply to money. It’s a model that when combined with evolution explains to a large extent how we got here today.

2. The accuracy of those models

Models are great but not if they’re flawed. If you’re using a model that’s flawed you’ll misunderstand the variables that matter and the cause and effect relationship between variables. That means you’ll think something that’s not true and if you take action on those thoughts, you’ll likely end up with a big, time consuming, anxiety-ridden mess.

The best way to test the accuracy and robustness models is to let time filter them for you. Compound interest was working long before recorded human history.

3. Updating your models

When you’re wrong, you’re wrong. People might start out with more ability than you — while you can’t control the hand you’re dealt, or the vector your parents put you on. But if you’re an adult, at some point you have to take control of your own trajectory. I’ve seen people who quickly adapt to feedback from the world rise to incredible levels.

Typically the mental models we’re using get in the way making us unable to see their limitations or inaccuracy. Updating your models in the face of evidence or feedback is very hard. One thing that seems to work well for people is to refocus your ego from “you being right” to “the best outcome was achieved.” If you tie your ego to outcomes, you positively change the path you’re on.

Knowing the models is not enough. You have to use them.

You need to know how to apply your mental models to understand real problems.

Charlie Munger, the irreverent billionaire business partner of Warren Buffett, shows us how this is done using the model of autocatalysis.

Disney is an amazing example of autocatalysis … They had those movies in the can. They owned the copyright. And just as Coke could prosper when refrigeration came, when the videocassette was invented, Disney didn’t have to invent anything or do anything except take the thing out of the can and stick it on the cassette.

No one discipline has all the answers, only by looking at them all can we come to grow worldly wisdom.

Munger continues:

Have a full kit of tools … go through them in your mind checklist-style.. .you can never make any explanation that can be made in a more fundamental way in any other way than the most fundamental way.

This is the path; the rest is up to you.