Clear Thinking: Turning Ordinary Moments into Extraordinary Results

by Shane Parrish

You don’t need to be smarter than others to outperform them if you can out-position them. Anyone looks like a genius when they’re in a good position, and even the smartest person looks like an idiot when they’re in a bad one.

RATIONALITY IS WASTED IF YOU DON’T KNOW WHEN TO use it.

In the space between stimulus and response, one of two things can happen. You can consciously pause and apply reason to the situation. Or you can cede control and execute a default behavior.

Here’s how each essentially functions: The emotion default: we tend to respond to feelings rather than reasons and facts. The ego default: we tend to react to anything that threatens our sense of self-worth or our position in a group hierarchy. The social default: we tend to conform to the norms of our larger social group. The inertia default: we’re habit forming and comfort seeking. We tend to resist change, and to prefer ideas, processes, and environments that are familiar.

Doing something different means you might underperform, but it also means you might change the game entirely.

Lou Brock might have put it best when he said, “Show me a guy who’s afraid to look bad, and I’ll show you a guy you can beat every time.”

Objects never change if they’re left alone. They don’t start moving on their own, nor do they stop moving till something stops them.

Leonard Mlodinow sums it up this way: “Once our minds are set in a direction, they tend to continue in that direction unless acted upon by some outside force.”

A man can do as he wills, but not will as he wills. —ARTHUR SCHOPENHAUER

You unconsciously adopt the habits of the people you spend time with, and those people make it easier or harder for you to achieve progress toward what you want to achieve. The more time you spend with people, the more likely you start to think and act as they do.

The real test of a person is the degree to which they are willing to nonconform to do the right thing.

At dinner one night, Charlie Munger elaborated on the same idea my real estate investor friend had put forth. He said, “When you play games where other people have the aptitude and you don’t, you’re going to lose. You have to figure out where you have an edge and stick to it.”

SELF-CONFIDENCE IS ABOUT TRUSTING IN YOUR ABILITIES and your value to others.

One of my exemplars is Charlie Munger, the billionaire business partner of Warren Buffett. He raised my standard for holding an opinion. One night at dinner, he commented, “I never allow myself to have an opinion on anything unless I know the other side’s argument better than they do.”

As Montaigne put it, “I have gathered a garland of other men’s flowers, and nothing is mine but the cord that binds them.”

The formula for failure is a few small errors consistently repeated.

We fail to see our own weaknesses for three main reasons. First, those flaws can be hard for us to detect because they’re part of the way we’re accustomed to thinking, feeling, and acting.

Second, seeing our flaws bruises our egos—especially when those flaws are behaviors that are deeply ingrained.

Third, we have a limited perspective. It is very hard to understand a system that we are a part of.

“Show me an organization in which employees take ownership, and I will show you one that beats its competitors,” says Abrashoff.

Alcoholics Anonymous has a helpful safeguard for its members. They call it HALT—an acronym that stands for Hungry, Angry, Lonely, and Tired. When you feel like having a drink, they say, ask yourself whether any of these conditions apply. If so, deal with the real problem—hunger, anger, loneliness, or fatigue—instead of reaching for a drink.

It turns out that rules can help us automate our behavior to put us in a position to achieve success and accomplish our goals.

If you were unlucky, trying again with the same approach should lead to a different outcome. When you repeatedly don’t get the outcomes you want, though, the world is telling you to update your understanding.

The biggest mistake people make typically isn’t their initial mistake. It’s the mistake of trying to cover up and avoid responsibility for it. The first mistake is expensive; the second one costs a fortune.

There are three problems with covering up mistakes. The first is that you can’t learn if you ignore your mistakes. The second is that hiding them becomes a habit. The third is that the cover-up makes a bad situation worse.

Mistakes turn into anchors if you don’t accept them. Part of accepting them is learning from them and then letting them go. We can’t change the past, but we can work to undo the effects it’s had on the future.

If you choose not to decide, you still have made a choice. —NEIL PEART

Defining the problem starts with identifying two things: (1) what you want to achieve, and (2) what obstacles stand in the way of getting it.

A handy tool for identifying the root cause of a problem is to ask yourself, “What would have to be true for this problem not to exist in the first place?”

Build a problem-solution firewall. Separate the problem-defining phase of the decision-making process from the problem-solving phase.

One way to keep meetings short and avoid the signaling that comes from repeating information that everyone knows is simply asking everyone, “What do you know about this problem that other people in the room don’t know?”

After a long pause, he turned to Collins and said, “This is a very important lesson. You must never confuse faith that you will prevail in the end—which you can never afford to lose—with the discipline to confront the most brutal facts of your current reality, whatever they might be.”

The future is not like the weather. It doesn’t just happen to us. We shape our future with the choices we make in the present, just as our present situation was shaped by choices we made in the past.

As Frederic Maitland purportedly once wrote, “Simplicity is the end result of long, hard work, not the starting point.”

Charlie Munger put it this way: “Intelligent people make decisions based on opportunity costs … it’s your alternatives that matter. That’s how we make all of our decisions.”

“As long as they make a decision based on the most important thing, they won’t be wrong.” He paused, then said slowly, “A lot of people reach their ceiling in this job because they can’t figure out this one thing.”

THE TARGETING PRINCIPLE: Know what you’re looking for before you start sorting through the data.

When it comes to getting information that’s accurate, there are two principles you should know: the HiFi Principle and the HiEx Principle. The first will help you find the best intel possible from within any given situation, and the second will help you find the best intel possible from outside of it.

the further the information is from the original source, the more filters it’s been through before getting to you.

When you get information from other people, ask questions that yield detailed answers. Don’t ask people what they think; instead, ask them how they think.

Specific knowledge is earned, not learned, so imitators don’t fully understand the ideas they’re talking about.

THE ASAP PRINCIPLE: If the cost to undo the decision is low, make it as soon as possible.

THE ALAP PRINCIPLE: If the cost to undo a decision is high, make it as late as possible.

THE STOP, FLOP, KNOW PRINCIPLE: Stop gathering more information and execute your decision when either you Stop gathering useful information, you First Lose an OPportunity (FLOP), or you come to Know something that makes it evident what option you should choose.

Warren Buffett has a saying that I often come back to: “Diversification is protection against ignorance. It makes little sense if you know what you are doing.”

There are three kinds of execution fail-safes you should know: setting trip wires, empowering others to make decisions, and tying your hands.

GOOD DECISION-MAKING COMES down to two things: Knowing how to get what you want Knowing what’s worth wanting

The ancient Greeks had a word for this ingredient: phronesis—the wisdom of knowing how to order your life to achieve the best results.

“In my 89 years, I’ve learned that happiness is a choice—not a condition.”