Mental Models — Frameworks for Thinking

Life in today’s challenging society can be chaotic and confusing to many at times especially given the fact that we are constantly being bombarded by signals as we try to make coherent sense of the stimuli we are presented with. An apt analogy for this I guess would be trying to solve a 1500 piece jigsaw puzzle with a flashlight in the dark, while a heavy metal band is playing and you are also trying to babysit a one year old.

Just a plain ol’ jigsaw puzzle by itself would be easier to handle ! — Photo Courtesy: https://www.facebook.com/artisanisland.store/

Mental models come into the picture as a means of helping to sort out the signal from the noise. They can be thought of as a framework for thinking and understanding, which helps humans to both assess how things or systems work and at the same time help us make better decisions. They can also be thought of as a toolbox which will help dismantle and solve difficult problems — especially in business.

When considering how mental models can help us in assessing how things or systems work it would first help if we could define what exactly we understand to be a ‘system’. It could be a process — eg. Sales Cycle in a startup , a machine — eg. An automobile or even something like your mental health-eg. How happy you are. When approaching ‘systems’ such as this the following mental models could be quite useful to have:

1. Circle of Competence:

Basically what this means is that you don’t have to be an expert on every single topic, or even many. You only have to be able to evaluate ideas or topics within your circle of competence. The size of that circle is not very important; knowing its boundaries, however, is both crucial and vital.

This means that you should focus on concentrating on your area of expertise, and not be afraid to say “I don’t know” especially when you’re dealing with someone else’s circle of competence.

Photo Courtesy : https://tradebrains.in/circle-of-competence-investing/

2. Confirmation Bias

This is a human tendency/fallacy to look for and interpret information in a way that reinforces or confirms what you already believe to be true.

In order to protect yourself against confirmation bias, you need to accept and be comfortable with the idea that your perception doesn’t always (or even frequently) equal reality. Challenge yourself to find different interpretations of what’s happening and you may uncover the actual truth.

Having a more skeptical mind will lead you to probe more deeply for objections — which, in turn, will help you set much more realistic expectations before it’s too late.

Photo Courtesy : https://tradebrains.in/circle-of-competence-investing/

3. First Principles

With this approach you need to take nothing but the proven, underlying principles or axioms as given. Using these axioms you need to work up from there to create something more meaningful. Since these are built on axioms it will also mean that the systems built based on this mode of thinking will have ‘strong foundations’.

Photo Courtesy : https://benjaminstrusnik.com/blog/wealth/business/growth/first-principles-thinking/

4. Local/Global Optimization

With respect to the system that you are trying to optimize are you optimizing it based on the ‘big picture’ or are you optimizing just a small part of it which is not really even worth your time working on. By understanding whether the value added to the system is from a local or global sense will help you to assess how you should prioritize your actions as well as understand the Return on Investment (ROI) of your actions.

Photo Courtesy: https://archimorph.com/2012/05/23/framing-optimization-in-contemporary-architecture/

In addition to mental models for understanding systems there are several available to aid you with regards to better decision making as well. Some of them are as follows:

1. Eisenhower Matrix

Consider your day-to-day decisions: Make a 2x2 grid with axes labeled “Priority” and “Urgency.” Bucket your daily tasks into the four quadrants and prioritize them in this order: highly important and highly urgent, highly important but non-urgent, unimportant but highly urgent, and unimportant and non-urgent. (These 2x2 grid formulation or their variants are basically how most of the theories in MBA courses or Business Schools are presented as since they are easy to grasp intuitively.)

Photo Courtesy: https://luxafor.com/the-eisenhower-matrix/

2. ICE (Impact, Confidence, Ease)

This is the ideal mental model for making short-term decisions: When you are faced with many options needing prioritization, score each on a scale of 1–10 using three variables.

1. The positive impact it would have if it succeeds or works out. (Impact)
2. The confidence you have that it will succeed if you try it out. (Confidence)
3. How easy it would be to try it out. (Ease)

For each option on your list, average its three numbers to get its ICE score. Then order all your options by their ICE scores. Options at the top of your list will have the highest expected value and should be given the highest priority.

3. Pareto’s Principle (80–20 Rule)

This model is best for making medium-term decisions. For example to maximize Return On Investment (ROI) on a project, preferentially invest in the top 20% of inputs ranked by returns.

Photo Courtesy:https://www.interaction-design.org/literature/article/the-pareto-principle-and-your-user-experience-work

These are just a few of the mental models I have come across and while I am no expert in using them I have found instances where they have proven to be very useful especially in understanding and resolving issues. I am still very much in the process of learning of the art of how to use them, but I believe they could be of use to many out there, especially when understanding how to make better decisions and separate the signal from the noise.