Author Archives: Farnam Street Team

20 Rules for a Knight: A Timeless Guide from 1483

“Often we imagine that we will work hard until we arrive at some distant goal, and then we will be happy. This is a delusion. Happiness is the result of a life lived with purpose. Happiness is not an objective. It is the movement of life itself, a process, and an activity. It arises from curiosity and discovery. Seek pleasure and you will quickly discover the shortest path to suffering.”

***

The quest to become a knight has occupied many over the years.

In 1483, Sir Thomas Lemuel Hawke of Cornwall was among 323 killed at the Battle of Slaughter Bridge. Foreseeing this outcome, Sir Thomas wrote a letter to his children in Cornish outlining the Rules for a Knight — the life lessons Sir Thomas wished to pass along to his four children.

The severely damaged letter was adapted and reconstructed by Ethan Hawke, after the family discovered it in the early 1970s in the basement of the family farm near Waynesville, Ohio after his great grandmother passed away.

Or, so the story goes.

The resulting book, Rules for a Knight — in reality a work of fiction — began over a decade ago. Why a book about knights? Hawke explains:

“I’ve just always loved the idea of knighthood,” he said. “It makes being a good person cool. Or, aspiring to be a good person cool.”

And so Hawke started applying the chivalry to his own household:

My wife was reading a book about step-parenting, and this book was talking about the value of rules, so we started saying, well, what are the rules of our house? And you start with the really mundane, like eight-o’clock bedtime, all that kind of stuff. And then, invariably, you start asking yourself, well, what do we really believe in? So I started riffing on this idea of ‘rules for a knight.’ Like, what does the king decree, you know? I wrote it out—the idea was we were going to put it on the wall, in calligraphy. Like, these are the rules.

The work stands alone as a blueprint of civilized growth and self-improvement, the path to becoming a humble, strong, and reliable gentleman (or lady). The ideas mostly come from “other knights,” including Muhammad Ali, Emily Dickinson, Dwight D. Eisenhower, and Mother Teresa, as Hawke credits them on the acknowledgment page.

“Never announce that you are a knight, simply behave as one.” Click To Tweet

Rules for a Knight

“Tonight,” Sir Thomas Lemuel Hawkes of Cornwall begins, “I will share with you some of the more valuable stories, events, and moments of my life so that somewhere deep in the recesses of your imagination these lessons might continue on and my experiences will live to serve a purpose for you.”

20 Rules for a Knight

1. Solitude

Create time alone with yourself. When seeking the wisdom and clarity of your own mind, silence is a helpful tool. The voice of our spirit is gentle and cannot be heard when it has to compete with others. Just as it is impossible to see your reflection in troubled water, so too is it with the soul. In silence, we can sense eternity sleeping inside us.

2. Humility

Never announce that you are a knight, simply behave as one. You are better than no one, and no one is better than you.

3. Gratitude

The only intelligent response to the ongoing gift of life is gratitude. For all that has been, a knight says, “Thank you.” For all that is to come, a knight says, “Yes!”

4. Pride

Never pretend you are not a knight or attempt to diminish yourself because you deem it will make others more comfortable. We show others the most respect by offering the best of ourselves.

5. Cooperation

Each one of us is walking our own road. We are born at specific times, in specific places, and our challenges are unique. As knights, understanding and respecting our distinctiveness is vital to our ability to harness our collective strength. The use of force may be necessary to protect in an emergency, but only justice, fairness, and cooperation can truly succeed in leading men. We must live and work together as brothers or perish together as fools.

6. Friendship

The quality of your life will, to a large extent, be decided by with whom you elect to spend your time.

7. Forgiveness

Those who cannot easily forgive will not collect many friends. Look for the best in others.

8. Honesty

A dishonest tongue and a dishonest mind waste time, and therefore waste our lives. We are here to grow and the truth is the water, the light, and the soil from which we rise. The armor of falsehood is subtly wrought out of the darkness and hides us not only from others but from our own soul.

9. Courage

Anything that gives light must endure burning.

10. Grace

Grace is the ability to accept change. Be open and supple; the brittle break.

11. Patience

There is no such thing as a once-in-a-lifetime opportunity. A hurried mind is an addled mind; it cannot see clearly or hear precisely; it sees what it wants to see, or hears what it is afraid to hear, and misses much. A knight makes time his ally. There is a moment for action, and with a clear mind that moment is obvious.

12. Justice

There is only one thing for which a knight has no patience: injustice. Every true knight fights for human dignity at all times.

13. Generosity

You were born owning nothing and with nothing you will pass out of this life. Be frugal and you can be generous.

14. Discipline

In the field of battle, as in all things, you will perform as you practice. With practice, you build the road to accomplish your goals. Excellence lives in attention to detail. Give your all, all the time. Don’t save anything for the walk home.The better a knight prepares, the less willing he will be to surrender.

15. Dedication

Ordinary effort, ordinary result. Take steps each day to better follow these rules. Luck is the residue of design. Be steadfast. The anvil outlasts the hammer.

16. Speech

Do not speak ill of others. A knight does not spread news that he does not know to be certain, or condemn things that he does not understand.

17. Faith

Sometimes to understand more, you need to know less.

18. Equality

Every knight holds human equality as an unwavering truth. A knight is never present when men or women are being degraded or compromised in any way, because if a knight were present, those committing the hurtful acts or words would be made to stop.

19. Love

Love is the end goal. It is the music of our lives. There is no obstacle that enough love cannot move.

20. Death

Life is a long series of farewells; only the circumstances should surprise us. A knight concerns himself with gratitude for the life he has been given. He does not fear death, for the work one knight begins, others may finish.

The rest of Rules For a Knight goes on to explore these ideas in greater detail. Despite its fiction status, the book is a timeless meditation on self-improvement and what it means to be a parent.

20 Rules for a Knight: a Timeless Guide from 1483 Click To Tweet

Daniel Pink on Incentives and the Two Types of Motivation

Motivation is a tricky multifaceted thing. How do we motivate people to become the best they can be? How do we motivate ourselves? Sometimes when we are running towards a goal we suddenly lose steam and peter out before we cross the finish line. Why do we lose our motivation part way to achieving our goal?

Dan Pink wrote an excellent book on motivation called Drive: The Surprising Truth About What Motivates Us. We’ve talked about the book before but it’s worth going into a bit more detail.

When Pink discusses motivation he breaks it into two specific types: extrinsic and intrinsic.

Extrinsic motivation is driven by external forces such as money or praise. Intrinsic motivation is something that comes from within and can be as simple as the joy one feels after accomplishing a challenging task. Pink also describes two distinctly different types of tasks: algorithmic and heuristic. An algorithmic task is when you follow a set of instructions down a defined path that leads to a single conclusion. A heuristic task has no instructions or defined path, one must be creative and experiment with possibilities to complete the task.

As you can see the two types of motivations and tasks are quite different.

Let’s look at how they play against each other depending on what type of reward is offered.

Baseline Rewards

Money was once thought to be the best way to motivate an employee. If you wanted someone to stay with your company or to perform better you simply had to offer financial incentives. However, the issue of money as a motivator has become moot in many sectors. If you are a skilled worker you will quite easily be able to find a job in your desired salary range. Pink puts it succinctly:

Of course the starting point for any discussion of motivation in the workplace is a simple fact of life: People have to earn a living. Salary, contract payments, some benefits, a few perks are what I call “baseline rewards.” If someone’s baseline rewards aren’t adequate or equitable, her focus will be on the unfairness of her situation and the anxiety of her circumstance. You’ll get neither the predictability of extrinsic motivation nor the weirdness of intrinsic motivation. You’ll get very little motivation at all. The best use of money as a motivator is to pay people enough to take the issue of money off the table.

Once the baseline rewards have been sorted we are often offered other ‘carrots and sticks’ to nudge our behavior. Many of these rewards will actually achieve the opposite effect to what was intended.

‘If, then’ Rewards

‘If, then’ rewards are when we promise to deliver something to an individual once they complete a specific task. If you hit your sales goals this month then I will give you a bonus. There are inherent dangers with ‘if, then’ rewards. They tend to prompt a short term surge in motivation but actually dampen it over the long term. Just the fact of offering a reward for some form of effort sends the message that the work is, well, work. This can have a large negative impact on intrinsic motivation. Additionally, rewards by their very nature narrow our focus, we tend to ignore everything but the finish line. This is fine for algorithmic tasks but hurts us with heuristic based tasks.

Amabile and others have found that extrinsic rewards can be effective for algorithmic tasks – those that depend on following an existing formula to its logical conclusion. But for more right-brain undertakings – those that demand flexible problem-solving, inventiveness, or conceptual understanding – contingent rewards can be dangerous. Rewarded subjects often have a harder time seeing the periphery and crafting original solutions.

Goals

When we use goals to motivate us how does that affect how we think and behave?

Like all extrinsic motivators, goals narrow our focus. That’s one reason they can be effective; they concentrate the mind. But as we’ve seen, a narrowed focus exacts a cost. For complex or conceptual tasks, offering a reward can blinker the wide-ranging thinking necessary to come up with an innovative solution. Likewise, when an extrinsic goal is paramount – particularly a short-term, measurable one whose achievement delivers a big payoff – its presence can restrict our view of the broader dimensions of our behavior. As the cadre of business school professors write, ‘Substantial evidence demonstrates that in addition to motivating constructive effort, goal setting can induce unethical behavior.

The examples are legion, the researchers note. Sears imposes a sales quota on its auto repair staff – and workers respond by overcharging customers and completing unnecessary repairs. Enron sets lofty revenue goals – and the race to meet them by any means possible catalyzes the company’s collapse. Ford is so intent on producing a certain car at a certain weight at a certain price by a certain date that it omits safety checks and unleashes the dangerous Ford Pinto.

The problem with making extrinsic reward the only destination that matters is that some people will choose the quickest route there, even if it means taking the low road.

Indeed, most of the scandals and misbehavior that have seemed endemic to modern life involve shortcuts. Executives game their quarterly earnings so they can snag a performance bonus. Secondary school counselors doctor student transcripts so their seniors can get into college. Athletes inject themselves with steroids to post better numbers and trigger lucrative performance bonuses.

Contrast that approach with behavior sparked by intrinsic motivation. When the reward is the activity itself – deepening learning, delighting customers, doing one’s best – there are no shortcuts. The only route to the destination is the high road. In some sense, it’s impossible to act unethically because the person who’s disadvantaged isn’t a competitor but yourself.

“Most of the scandals and misbehavior that have seemed endemic to modern life involve shortcuts.” Click To Tweet

These same pressures that may nudge you towards unethical actions can also push you to make more risky decisions. The drive towards the goal can convince you to make decisions that in any other situation you would likely never consider. (See more about the dangers of goals.)

It’s not only the person who is being motivated with the reward that is hurt here. The person who is trying to encourage a certain type of behaviour also falls into a trap and is forced to try and course correct which, often, leaves them worse off than if they had never offered the reward in the first place.

The Russian economist Anton Suvorov has constructed an elaborate econometric model to demonstrate this effect, configured around what’s called ‘principal-agent theory.’ Think of the principal as the motivator – the employer, the teacher, the parent. Think of the agent as the motivatee – the employee, the student, the child. A principal essentially tries to get the agent to do what the principal wants, while the agent balances his own interests with whatever the principal is offering. Using a blizzard of complicated equations that test a variety of scenarios between principal and agent, Suvorov has reached conclusions that make intuitive sense to any parent who’s tried to get her kids to empty the garbage.

By offering a reward, a principal signals to the agent that the task is undesirable. (If the task were desirable, the agent wouldn’t need a prod.) But that initial signal, and the reward that goes with it, forces the principal onto a path that’s difficult to leave. Offer too small a reward and the agent won’t comply. But offer a reward that’s enticing enough to get the agent to act the first time, and the principal ‘is doomed to give it again in the second.’ There’s no going back. Pay your son to take out the trash – and you’ve pretty much guaranteed the kid will never do it again for free. What’s more, once the initial money buzz tapers off, you’ll likely have to increase the payment to continue compliance.

Even if you are able to trigger the better behaviour it will often disappear once incentives are removed.

In environments where extrinsic rewards are most salient, many people work only to the point that triggers the reward – and no further. So if students get a prize for reading three books, many won’t pick up a fourth, let alone embark on a lifetime of reading – just as executives who hit their quarterly numbers often won’t boost earnings a penny more, let alone contemplate that long-term health of their company. Likewise, several studies show that paying people to exercise, stop smoking, or take their medicines produces terrific results at first – but the healthy behavior disappears once the incentives are removed.

When Do Rewards Work?

Rewards can work for routine (algorithmic) tasks that require little creativity.

For routine tasks, which aren’t very interesting and don’t demand much creative thinking, rewards can provide a small motivational booster shot without the harmful side effects. In some ways, that’s just common sense. As Edward Deci, Richard Ryan, and Richard Koestner explain, ‘Rewards do not undermine people’s intrinsic motivation for dull tasks because there is little or no intrinsic motivation to be undermined.’

You will increase your chances for success when rewarding routine tasks using these three practices:

  1. Offer a rationale for why the task is necessary.
  2. Acknowledge that the task is boring.
  3. Allow people to complete the task their own way (think autonomy not control).

Any extrinsic reward should be unexpected and offered only once the task is complete. In many ways this is common sense as it is the opposite of the ‘if, then’ rewards allowing you to avoid its many failings (focus isn’t solely on the prize, motivation won’t wane if reward isn’t present during task, etc…). However, one word of caution – be careful if these rewards become expected, because at that point they are no different than the ‘if, then’ rewards.

Daniel Pink on Incentives and the Two Types of Motivation Click To Tweet

Every Number Tells a Story

“We depend on numbers to make sense of the world,
and have done so ever since we started to count.”

— Alex Bellos

From The Grapes of Math By Alex Borros
From The Grapes of Math By Alex Bellos

 

The earliest symbols used for numbers go back to about 5000 years ago Sumer (modern day Iraq). They didn’t really look far for names. Ges, the word for one, also meant man. Min, the word for two, also meant women. At first numbers served a practical purpose, mostly things like counting sheep and determining taxes.

“Yet numbers also revealed abstract patterns,” writes Alex Bellos in his fascinating book The Grapes of Math: How Life Reflects Numbers and Numbers Reflect Life, which, he continues, “made them objects of deep contemplation. Perhaps the earliest mathematical discovery was that numbers come in two types, even and odd: those that can be halved cleanly, such as 2, 4 and 6, and those that cannot, such as 1, 3 and 5.

Pythagoras and Number Gender

Pythagoras, the Greek teacher, who lived in the sixth century BC and is most famous for his theorem about triangles, agreed with the Sumerians on number gender. He believed that odd numbers were masculine and even ones were feminine. This is where it gets interesting … why did he think that? It was, he believed, a resistance to splitting in two that embodied strength. The ability to be divisible by two, in his eyes was a weakness. He believed odd numbers were master over even. Christianity agrees with the gender theory, God created Adam first and Eve second. The latter being the sin.

Large Numbers

Numbers originally accounted for practical and countable things, such as sheep and teeth. Things get interesting as quantities increase, because we don’t use numbers in the same way.

We approximate using a “round number” as a place mark. It is easier and more convenient. When I say, for example, that there were a hundred people at the market, I don’t mean that there were exactly one hundred people there. … Big numbers are understood approximately, small ones precisely, and these two systems interact uneasily. It is clearly nonsensical to say that next year the universe will be “13.7 billion and one” years old. It will remain 13.7 billion years old for the rest of our lives.

Round numbers usually end in zero.

The word round is used because a round number represents the completion of a full counting cycle, not because zero is a circle. There are ten digits in our number system, so any combination of cycles will always be divisible by ten. Because we are so used to using round numbers for big numbers, when we encounter a big number that is nonround— say, 754,156,293— it feels discrepant.

Manoj Thomas, a psychologist at Cornell University, argues that we are uneasy with large, non-round numbers, which causes us to see them as smaller than they are and carries with it practical implications when, say, selling a house. “We tend to think that small numbers are more precise,” he says, “so when we see a big number that is precise we instinctively assume it is less than it is.” If he’s right the result is that you will pay more for expensive and non-round prices. Indeed his experiments seem to agree. In one, respondents viewed pictures of several houses and sales prices, some were round and some were larger and non-round (e.g., $490,000 and $492,332). On average subjects judged the precise one to be lower. As Bellos concludes on large numbers, “if you want to make money, don’t end the price with a zero.”

Number Influence When Shopping

One of the ways to make a number seem more precise is by subtracting 1.

When we read a number, we are more influenced by the leftmost digit than by the rightmost, since that is the order in which we read, and process, them. The number 799 feels significantly less than 800 because we see the former as 7-something and the latter as 8-something, whereas 798 feels pretty much like 799. Since the nineteenth century, shopkeepers have taken advantage of this trick by choosing prices ending in a 9, to give the impression that a product is cheaper than it is. Surveys show that anything between a third and two-thirds of all retail prices now end in a 9.

Of course we think that other people fall for this and surely not us, but that is not the case. Studies like this continue to be replicated over and over. Dropping the price one cent, say from $8 to $7.99 influences decisions dramatically.

Not only are prices ending in 9 harder to recall for price comparisons, we’ve also been conditioned to believe they are discounted and cheap. The practical implications of this are that if you’re a high-end brand or selling an exclusive service, you want to avoid bargain aspect. You don’t want a therapist who charges $99.99, any more than you want a high-end restaurant to list menu prices ending in $.99.

In fact, most of the time, it’s best to avoid the $ all together. Our response to this stimulus is pain.

The “$” reminds us of the pain of paying. Another clever menu strategy is to show the prices immediately after the description of each dish, rather than listing them in a column, since listing prices facilitates price comparison. You want to encourage diners to order what they want, whatever the price, rather than reminding them which dish is most expensive.

These are not the only nor most subtle ways that numbers influence us. The display of absurdly expensive items first creates an artificial benchmark. The real estate agent, who shows you a house way above your price range first, is really setting an artificial benchmark.

The $100,000 car in the showroom and the $10,000 pair of shoes in the shop window are there not because the manager thinks they will sell, but as decoys to make the also-expensive $50,000 car and $5,000 shoes look cheap. Supermarkets use similar strategies. We are surprisingly susceptible to number cues when it comes to making decisions, and not just when shopping.

We can all be swayed by irrelevant random numbers, which is why it’s important to use a two-step framework when making decisions.

Numbers and Time

Time has always been counted.

We carved notches on sticks and daubed splotches on rocks to mark the passing of days. Our first calendars were tied to astronomical phenomena, such as the new moon, which meant that the number of days in each calendar cycle varied, in the case of the new moon between 29 and 30 days, since the exact length of a lunar cycle is 29.53 days. In the middle of the first millennium BCE, however, the Jews introduced a new system. They decreed that the Sabbath come every seven days ad infinitum, irrespective of planetary positions. The continuous seven-day cycle was a significant step forward for humanity. It emancipated us from consistent compliance with Nature, placing numerical regularity at the heart of religious practice and social organization, and since then the seven-day week has become the world’s longest-running uninterrupted calendrical tradition.

Why seven days in the week?

Seven was already the most mystical of numbers by the time the Jews declared that God took six days to make the world, and rested the day after. Earlier peoples had also used seven-day periods in their calendars, although never repeated in an endless loop. The most commonly accepted explanation for the predominance of seven in religious contexts is that the ancients observed seven planets in the sky: the Sun, the Moon, Venus, Mercury, Mars, Jupiter and Saturn. Indeed, the names Saturday, Sunday and Monday come from the planets, although the association of planets with days dates from Hellenic times, centuries after the seven-day week had been introduced.

The Egyptians used the human head to represent 7, which offers “another possible reason for the number’s symbolic importance.”

There are seven orifices in the head: the ears, eyes, nostrils and mouth. Human physiology provides other explanations too. Six days might be the optimal length of time to work before you need a day’s rest, or seven might be the most appropriate number for our working memory: the number of things the average person can hold in his or her head simultaneously is seven, plus or minus two.

Bellos isn’t convinced. He thinks seven is special, not for the reasons mentioned above, but rather because of arithmetic.

Seven is unique among the first ten numbers because it is the only number that cannot be multiplied or divided within the group. When 1, 2, 3, 4 and 5 are doubled the answer is less than or equal to ten. The numbers 6, 8 and 10 can be halved and 9 is divisible by three. Of the numbers we can count on our fingers, only 7 stands alone: it neither produces nor is produced. Of course the number feels special. It is!

Favorite Numbers and Number Personalities

When people are asked to think of a digit off the top of their head, they are most likely to think of 7. When choosing a number below 20, the most probable response is 17. We’ll come back to that in a second. But for now let’s talk about the meaning of numbers.

Numbers express quantities and we express qualities to them. Here are the results from a simple survey that paints a “coherent picture of number personalities.

From The Grapes of Math by Alex Borros
From The Grapes of Math by Alex Bellos

 

Interestingly, Bellos writes, “the association of one with male characteristics, and two with female ones, also remains deeply ingrained.”

When asked to pick favorite numbers, we follow clear patterns, as shown below in a heat map, in which the numbers from 1 to 100 are represented by squares. Bellos explains:

(The top row of each grid contains the numbers 1 to 10, the second row the numbers 11 to 20, and so on.) The numbers marked with black squares represent those that are “most liked” (the top twenty in the rankings), the white squares are the “least liked” (the bottom twenty) and the squares in shades of gray are the numbers ranked in between.

From the Grapes of Math by Alex Bellos
From the Grapes of Math by Alex Bellos

The heat map shows conspicuous patches of order. Black squares are mostly positioned at the top of the grid, showing on average that low numbers are liked best. The left-sloping diagonal through the center reveals that two-digit numbers where both digits are the same are also attractive. We like patterns. Most strikingly, however, four white columns display the unpopularity of numbers ending in 1, 3, 7 and 9.

Numbers are a part of our lives. We see them everywhere. They influence us, they guide us, and they help us solve problems. And yet, as The Grapes of Math: How Life Reflects Numbers and Numbers Reflect Life shows us, their history and patterns can also be a source of wonder.

Every Number Tells a Story Click To Tweet

Don’t Let Your (Technology) Tools Use You

HERBERT SIMON 2

***

A shovel is just a shovel. You shovel things with it. You can break up weeds and dirt. (You can also whack someone with it.) I’m not sure I’ve seen a shovel used for much else.

Modern technological tools aren’t really like that.

What is an iPhone, functionally? Sure, it’s a got the phone thing down, but it’s also a GPS, a note-taker, an emailer, a text messager, a newspaper, a video-game device, a taxi-calling service, a flashlight, a web browser, a library, a book…you get the point. It does a lot.

This all seems pretty wonderful. To perform those functions 20 years ago, you needed a map and a sense of direction, a notepad, a personal computer, a cell phone, an actual newspaper, a Playstation, a phone and the willingness to talk to a person, an actual flashlight, an actual library, an actual book…you get the point. Basically, as Mark Andressen puts it, the world is being eaten by software. One simple (looking) device and a host of software can perform the functions served by a bunch of big clunky tools of the past.

So far, we’ve been convinced that usage of the New Tools is mostly “upside,” that our embrace of them should be wholehearted. Much of this is for good reason. Do you remember how awful using a map was? Yuck.

The problem is that our New Tools are winning the battle of attention. We’ve gotten to the point where the tools use us as much as we use them. This new reality means we need to re-examine our relationship with our New Tools.

***

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Mental Models: Getting the World to Do the Work for You

The trend I see today in organizations concerns me.  People are working harder and harder to clean up otherwise avoidable messes they created by making poor initial decisions. In my opinion, two main factors contribute to our inability to make good initial decisions. First, we don’t have the time to think. And second, we don’t have a firm understanding of how the world really works.

Luckily there is another path.

If you understand the world as it really is, not as you’d wish it to be, you will begin to make better decisions. These better decisions will also free up your time, reduce your stress, allow you to spend more time with your family, and leave your competition in the dust.

That leads us to the question: How can we best understand the world as it is?

Acquiring knowledge can be a very daunting task. If you think of the mind as a toolbox, we’re only as good as the tools at our disposal. A carpenter doesn’t show up to work with an empty toolbox. Not only do they want as many tools in their toolbox as possible, but they want to know how to use them. Having more tools and the knowledge of how to use them means they can tackle more problems.  Try as we might, we cannot build a house with only a hammer.

If you’re a knowledge worker, you’re a carpenter. But your tools aren’t bought at a store and they don’t come in a red box that you carry around. Mental tools are the big ideas from multiple disciplines, and we store them in our mind. And if we have a lot of tools and the knowledge required to wield them properly, we can start to synthesize how the world works and make better decisions when confronted with problems.

This is how we understand and deal with reality. I call these tools Mental Models.

“Mental models are a framework for understanding how the world really works.” Click To Tweet

Mental models are a framework for understanding how the world really works. They help you grasp new ideas quickly, identify patterns before anyone else and shift your perspective with ease.

Mental Models allow us to make better decisions, scramble out of bad situations, and think critically. If you want to understand reality you must look at a problem in multiple dimensions — how could it be otherwise?

Getting to this level of understanding requires having a lot of tools and knowing how to use them. You knew there was a hitch right?

We need to change our fast-food diet of information consumption and adopt the healthier diet of knowledge that changes slowly over time. While changing diets isn’t easy, it can be incredibly rewarding: more time, less stress, and being better at your job. The costs, however, are short term pain for long term gain. You must change how you think.

One example of a model we can immediately conceptualize and use to improve our ability to make better decisions is something we can borrow from ecology called second-order thinking. The simple way to conceptualize this is to ask yourself “If I do X, what will happen after that?”. I sum this up using the ecologist Garrett Hardin’s simple question: “And then what?

A lot of people forget about higher order effects — second and third-order effects or higher. I’ve been in a lot of meetings where decisions are made and very few people think to the second level, let alone the third (see second-level thinking). This includes board meetings. Rather, what typically happens is what we call first conclusion bias. The brain shuts down and stops thinking at the first idea that comes to mind that seems to address the problem as you understand it.

We don’t often realize that our first thoughts are usually not even our thoughts. They usually belong to someone else. We understand the sound-byte but we haven’t done the hard work of real thinking. After we reach a first conclusion, our minds often shut down. We don’t seek evidence that would contradict our conclusion. We don’t ask ourselves what the likely result of this solution would be — we don’t ask ourselves “And then what?” We don’t ask what other solutions might be even more optimal.

For example, consider a hypothetical organization that decides to change their incentive systems. They come up with a costly new system that requires substantial changes to the current system. Only they don’t consider (or even understand) the problems that the new system is likely to create. It’s possible they’ve created more problems than they’ve solved – only now there are different problems they must put their head down to solve. Optically, they “reorganize their incentive programs,” but practically, they’ve simply expended energy to stay in place.

Another, perhaps more complicated, example is when a salesman comes into a company and offers you a software program he claims will lower your operating costs and increase your profits. He’s got all these beautiful charts on how much more competitive you’ll be and how it will improve everything. This is exactly what you need because your compensation is based on increasing profits. You’re sold.

Then second-order thinking kicks in and you dare to ask how much of those cost savings are going to go to you and how much will eventually end up benefits enjoyed by customers? To a large extent, that depends on the business you’re in. However, you can be damn sure the salesman is now knocking on your competitor’s door and telling them you just bought their product and if they want to remain competitive they better purchase it too. Eventually, you all have the new software and no one is truly better off. Thus, in the manner of a crowd of people standing on their tip-toes at a parade, all competitors spend the money but none of them win: The salesman wins and the customer wins.

We know, thanks to people like Garrett Hardin, Howard Marks, Charlie Munger, Peter Kaufman, and disciplines like ecology, that there are second and third-order effects. This is how the world really works. It just isn’t always a comfortable reality.

Understanding how the world works isn’t easy and it shouldn’t be. It’s hard work. If it were easy, everyone would do it. And it’s not for everyone. Sometimes, if your goal is to maximize utility, you should focus on getting very, very good in a narrow area and becoming an expert, accepting that you will make many mistakes outside of that domain. But for most, it’s extremely helpful to understand the forces at play outside of their narrow area of expertise.

Because when you think about it, how could reality be anything other than a synthesis of multiple factors? How could it possibly be otherwise?

Mental Models: Getting the World to Do the Work for You Click To Tweet

The Knowledge Project: Véronique Rivest on Wine

VéroniqueRivest

On this episode of The Knowledge Project, I talk about one of my favorite subjects with one of the most respected sommeliers in the world: Véronique Rivest.

After placing twice in the top 12 in 2007 and 2010, Véronique became the first woman to make the podium by taking second place at the world’s best sommelier competition in Tokyo in March 2013. She’s also the owner of Soif in Hull, which is quickly becoming one of my favorite wine bars.

On this episode we learn: how to taste (including an on-air tasting), tips and tricks for serving wine, the twenty minute rule, how to tell if a bottle has been corked, how to hone your sense of taste, how a sommelier looks at a wine list, and so much more.

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Transcript:
A complete transcript is available for members.

Books Mentioned