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There’s no doubt that decision-making and problem-solving are an integral part of living.

Every day we make thousands of decisions, some easy and others complex and stressful -and yet, they are literal forks in the road with dramatic impacts on both our personal and professional lives.

Making the right decisions that will impact your life positively is extremely important.

If you’ve ever wondered how to make better decisions and problem-solve without wasting valuable time, wonder no more.

In this blog, I explore mental models, a concept that was popularized by Charlie Munger, Warren Buffet’s investment partner, and the vice chairman of Berkshire Hathaway.

Let’s begin with what a mental model is.

A mental model is an explanation of how something works.

It’s a concept, framework, and worldview that you carry around in your mind to help you interpret the world and understand the relationship between things.

Mental models are frameworks for thinking and decision-making that help you do three things:

1. Know what information to gather
2. Know how to process the information
3. Know what decisions you need to make based on the information gathered?

This allows you to think, reason, and act more effectively and helps you uncover creative solutions to problems.

So, a mental model is a construct that can help you navigate reality by guiding your perception and behavior.

While there are many great mental models you can pick from, in this blog, I will focus on the ones with the greatest utility.

Let’s jump in.

Inversion

Have you ever felt pressured to come up with a brilliant idea and you didn’t know where or how to start?

Consider using Inversion as a thinking tool that can help relieve some of that pressure.

Inversion is when you approach a problem from the opposite end of its natural starting point.

This might sound like a counterintuitive approach to problem-solving; however, you’ll be surprised at how quickly you come up with an idea or solution.

For example, instead of asking, “How can I make a really good video?” Ask, “How can I make a really bad video?”

After you’ve generated the list of the different ways you can make a really bad video, invert it.

Coming up with a list of bad ideas is a fun way to get your creative juices flowing; and, bad ideas are surprisingly valuable once you invert them.

Viewing a problem from a different perspective can reveal surprising insights.

The ancient stoics were well vast with the potency of using inversion as a thinking tool.

While most people are focused on how to achieve success, ancient stoic philosophers focused on the opposite by considering how they would manage failure.

For example, Marcus Aurelius, Seneca, and Epictetus believed that by imagining the worst-case scenario, they could overcome their fears of negative experiences and make better plans to prevent them.

They did this through an exercise called premeditatio malorum, which translates as “premeditation of evils.”

A fun application of inversion is the failure premortem, also called the “kill the company” exercise in organizations.

Here’s how it works:

Imagine the most important goal or project that you’re working on right now.

Now, fast forward six months and assume the project or goal has failed.

Tell the story of what happened; what went wrong? What mistakes were made?

The idea is to identify challenges and points of failure; what could go wrong, so you can develop a prevention plan ahead of time.

The benefits of this approach are twofold: it highlights all the mistakes you should avoid and you can invert the results into positives.

Remember: sometimes it’s more important to consider why people fail in life than why they succeed.

Shane Parrish author of the book: The great mental models, stated: “Avoiding stupidity is easier than seeking brilliance.”

For a more fun application of this mental model, here’s an exercise you can try out with your partner:

On your next date, come up with a list of all the ways you can both destroy the relationship.

This will give you an insight into the things your partner considers deal breakers and when you invert it, you’ll have some great ideas on how to keep the spark alive.

You’re welcome.😉

Via Negativa

Most of us are conditioned to look at what we can create or add to our lives to make them better and fail to consider what we can remove.

And yet, there is immense power in improvement by subtraction -an idea called Via Negativa.

This idea comes from a Latin phrase used initially in Christian Theology to explain what God is by focusing on what He is not and proceeding with the process of elimination.

It’s essentially the study of what not to do.

Have you noticed how much harder it is to describe what something is and how it can be achieved than what it’s not?

Take an example of what makes up a good life.

Pretty hard to explain, right?

But, it’s much easier to describe what a good life is not and to know what you shouldn’t do to enjoy a good life.

Paradoxically, what’s bad for you is more obvious than what’s good for you.

And you can greatly reduce your chances for failure by consistently avoiding the things that you know aren’t good for you.

When the Pope asked the Italian sculptor -Michael Angelo about how he managed to portray the marble statue of David in such detail, he replied: “I just removed everything that is not David.”

Think of Via Negativa the same way, it’s about taking away what’s not necessary.

For example, here’s how you can apply this thinking model to your life:

List all the things that would make your life terrible and then avoid them at all costs.

Then, list out the things you’re already doing that are impeding your success, and find a way to eliminate them from your life.

You’ll be astounded at the positive impact this has on your well-being.

First Principles Thinking

When we’re trying to achieve something, we tend to look at what others in the space are doing, and then follow their approach.

Most people assume existing solutions exist for good reason, so they don’t question them.

The problem with this is that, if these solutions are based on incorrect assumptions, and are inherited by default, they could pose very grave consequences.

This is why first principles thinkers don’t take existing solutions at face value; they drill down to understand their fundamental truths.

First principles are the core elements that everything else is built upon.

This thinking tool helps to clarify complicated problems by reverse engineering and splitting them apart to understand what the key components are and separate them from the assumptions.

This model puts you in the driver’s seat of your life and enables you to come up with original solutions.

I would be remiss if I didn’t talk about the person that popularized this mental model: Elon Musk.

The story of how Space X came to be is a great illustration of this way of thinking in action.

The story goes:

Musk wanted to purchase a rocket, however, he was told that each rocket costs about $65 million.

This being an astronomical price, he had to come up with an alternative approach; so, he asked himself, what is a rocket made of?

Aerospace-grade, aluminum alloys, titanium, copper, and carbon fiber.

He then inquired about the value of these materials on the commodity market.

Discovering that the materials cost about two percent of the typical price, Musk thought of a revolutionary idea: Instead of buying the rocket at $65 million, he could buy the materials, employ smart engineers, and build the rockets himself.

That’s how Space X came to be.

The lesson we derive from this story is that, if you know the first principles of something, you can build the rest of your knowledge around them to produce something new.

I know that it can be exhausting to solve every problem with first-principle thinking, and it might be typically okay to go with already existing solutions.

However, when you’re faced with a highly consequential decision or problem like what career to choose or what business to start, don’t simply do what other people are doing.

Instead, put on your first principles cap and start to drill down to understand the fundamental principles of these ideas.

All tactics and strategies are aimed at achieving first principles and they’re a means to the end.

When you understand the end, you’re free to experiment with different approaches/methods to getting there.

And you can even come up with your unique solutions like Elon Musk did.

Harrington Emerson explained this beautifully when he stated: “As to methods, there may be a million and then some, but principles are few. The man who grasps principles can successfully select his methods. The man who tries methods, ignoring principles, is sure to have trouble.”

So, don’t blindly follow solutions and ways of living that you don’t fully understand and might be filled with assumptions and dogmas.

Remember: A first-principles thinker has a nuanced understanding.

Therefore, you should get back in touch with your innate curiosity and desire to question things.

And start asking why -so you’re able to select the solutions and ways of life that are better aligned with your true essence.

One of the most effective skills you can develop in today’s information-overload world is the ability to tell the difference between first principles and assumptions.

Second Order Thinking

Have you heard of the Cobra Effect?

The story of how this effect came to be is perhaps the most interesting illustration of the importance of second-order thinking.

During the British rule of colonial India, the British government was facing a venomous cobra snake infestation problem in Delhi.

So, the government came up with an ingenious plan to offer a bounty for every dead cobra; or so they thought.

The initial effects of the incentive strategy were a success; many rewards were claimed, and the number of cobras in Delhi started to decrease.

However, the number of dead cobras presented to the bounty office for rewards suspiciously started to rise.

It turns out, some Delhi people with an enterprising spirit, started breeding cobra snakes to get the bounty.

When the government became aware of this scheme, they stopped offering the reward for the dead snakes.

And then, all hell broke loose.

The breeders set the cobras free which increased their population in Delhi.

This story shows that sometimes, the apparent solution to a problem can make a situation even worse.

It’s no surprise that we often make bad decisions in our day-to-day lives and work because we fail to consider the potential consequences of our decisions.

This is mainly due to our tendency to think linearly because it feels like the most intuitive way to solve a problem.

But, as you’ve seen, it’s often not the right way.

Because failing to take a step back to see the big picture can pose grave consequences.

The idea behind this mental model is that, instead of stopping at the thought of what is the first consequence of an action, you think about what the subsequent consequences of that action could be.

This is a great thinking tool to use particularly when you’re unsure about the consequences of an action you plan to take and its potential long-term effects.

So, to avoid the disastrous unintended consequences that might arise from second-order effects, it’s imperative that you incorporate second-order thinking in your decision-making process.

Second-order thinking is like playing a game of chess, the best players can consider a few steps ahead: “If I make this move, what’s my opponent going to do? And then, what will I do?”

Some decisions might seem like wins at first and then turn out to be losses over time; when what appeared to be a good investment turns out to be a liability.

However, when you use this thinking model, you’ll be able to examine your decisions and how they’ll affect you in the long run.

For decisions to stand the test of time, second-order thinking is necessary.

So, to put this mental model in effect, always ask yourself: And then what?

Taking this approach will help you to consider the short-term, medium-term, and long-term consequences of your decision.

It will also help you to consider your decisions from different perspectives -putting you in a position to make better-informed and well-thought-out decisions.

Ray Dalio author of the book: Principles, stated: “Failing to consider second-and third-order consequences is the cause of a lot of painfully bad decisions, and it is especially deadly when the first inferior option confirms your own biases. Never seize on the first available option, no matter how good it seems, before you’ve asked questions and explored.”

This type of thinking might take a little more time but the effort is well worth it.

The Map is Not the Territory

Do you know what made the scientific revolution such a big deal?

Well, the prominent religions at the time claimed that everything important to know about the world was already known, and could be revealed by priests or scriptures.

However, the scientific revolution challenged that consensus.

It re-introduced the idea that we don’t know everything and that we should be willing to admit ignorance.

The map is not the territory is a mental model that metaphorically illustrates the difference between belief and reality.

In other words, our maps might not fully reflect the territory.

The idea is that the way we see the world isn’t reality itself -our minds create reality maps -ideas, beliefs, and shortcuts- to try and understand it.

This is because the only way we can process the complexity of reality is through abstraction.

So, we create generalizations and beliefs and then delete or distort our observations to keep them in line with our generalizations.

With this incomplete and distorted observation, we create an internal representation of the world which at times is very different from reality.

Our tendency to simplify reality by creating maps that help us in thinking and decision-making is understandable.

But, you and I need to keep in mind their limitations.

For example, when you look at a map, you’re not getting a perfect representation of what the territory looks like.

You’re only given a holistic overview of what you could be faced with once you go to that area.

This is an important fact to keep in mind; because, when you mistake the map for reality, you start to think you have all the answers.

This thinking model keeps you open to the possibility that you might be wrong or maybe you missed something.

It helps you become more curious and flexible -allowing you to keep an open mind.

Perhaps the best situation to use this mental model is when you have to make an important decision and yet you’ve been presented with generalized information.

Always try to remember that the description of the thing is not the thing itself.

For example, dating profiles are not the real person, financial spreadsheets do not represent the true stake of the business, and CVs are not the employees.

Even the best maps are imperfect, and in the reduction, you lose certain important information that could be vital to your decision-making process.

Another limitation of maps is that they need interpretation which is greatly influenced by your cognitive biases.

So, treat a map as a map and take it as a reference point and not your only data source.

Becoming less dependent on maps will strengthen your ability to use sound judgment.

The ancient Greek philosopher Socrates was named the wisest of all philosophers for claiming: “I only know that I know nothing.”

Occam’s Razor

Has a situation ever occurred in your life that left you thinking of all its possible causes?

When such a situation occurs again, Instead of coming up with conspiracy theories for its cause, try using Occam’s razor to point you to a likely cause.

This is a mental model that suggests that when you have a simple and complex explanation for the same phenomenon, the simplest explanation that requires the fewest assumptions is likely to be the correct one.

This model doesn’t prove or disapprove, it simply leads you down the path that’s most likely to be correct.

For example, if you’ve failed an important exam and want to know why, some explanations might include:

1. You didn’t study hard enough
2. Your teacher sabotaged your grade

Like most conspiracy theories, the second explanation only works with a lot of assumptions: you must assume that your teacher dislikes you enough but not your classmates to risk their job to bring your grade down.

So, since the first explanation is the simpler one, and has fewer assumptions, it’s likely the correct one.

If you’re trying to reach your partner in the middle of the day and their phone is off, some explanations might include:

1. Their phone was stolen or its battery died
2. They are cheating on you and are currently with the other person

The second explanation only works with a lot of assumptions: you must assume that your partner has been secretly seeing someone for a while and that they’re willing to risk their marriage with infidelity.

If you don’t have any reasons to believe the second explanation, the first explanation is, therefore, the likely one.

By reducing the number of unsupported assumptions in an explanation, you reduce the likelihood of being wrong.

You need to be okay with the simple explanations because more often than not, they are going to be correct and that will save you so much time and energy.

Hanlon’s Razor

Have you ever made the mistake of getting angry at someone thinking that they had malicious intent behind their actions yet in fact, they were just careless or incompetent?

Hanlon’s razor is a mental model that helps you think rationally about the actions of others.

It states: Never attribute to malice that which can be explained by carelessness, stupidity, neglect, or incompetence.

This mental model makes you consciously aware of situations that may at first glance appear to be internationally harmful or even malicious.

And it helps you to rationally judge them before you arrive at premature conclusions and react.

So much of life’s stress can be avoided by understanding this mental model because it reminds you that people make mistakes.

It also demands that you ask if there is another reasonable explanation for someone’s behavior.

And the explanation that’s most likely to be correct, is the one that contains the least amount of intent.

So instead of getting angry, learn to give people the benefit of the doubt.

Occam’s and Hanlon’s razors are not much of decision-making tools, they are ways to check your biases -which can help you make better decisions.

Conclusion

Mental models maximize your possibility of making great decisions by allowing you to see problems through different lenses and frameworks.

Like Charlie Munger said: “You must have a latticework of different mental models and approach problems by essentially running them through a checklist of your main mental models for a more thorough understanding of the issue at hand.”

Since mental models provide a picture of how the world works, you should continuously upgrade and improve the quality of this picture by learning more about them.

This means you must read widely from the best books and learn from people with different life experiences and find out which mental models they use to think and problem-solve.

Remember: Better mental models = better decisions = better results.