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Even if you identify an unknown unknown (turning it into a known unknown), you still remain unsure of its likelihood or consequences.
It’s similar to systems thinking, from the last section, in that you are attempting to get a full picture of the system so you can make better decisions.
scenario analysis (also known as scenario planning),
It gets its name because it involves analyzing different scenarios that might unfold.
conjure plausible yet distinct futures, ultimately considering several possible scenarios.
thought experiment,
Thought experiments are particularly useful in scenario analysis. Posing questions that start with “What would happen if . . .”
What would happen if life expectancy jumped forty years? What would happen if a well-funded competitor copied our product? What would happen if I switched careers?
counterfactual thinking, which means thinking about the past by imagining that the past was different, counter to the facts of what actually occurred.
(e.g., Philip K. Dick’s The Man in the High Castle).
What if I had taken that job? What if I had gone to that other school? What if I hadn’t done that side project?
lateral thinking, a type of thinking that helps you move laterally from one idea to another, as opposed to critical thinking, which is more about judging an idea in front of you.
Another helpful lateral-thinking technique involves adding some randomness when you are generating ideas.
groupthink, a bias that emerges because groups tend to think in harmony.
Within group settings, members often strive for consensus, avoiding conflict, controversial issues, or even alternative solutions once it seems a solution is already favored by the group.
The bandwagon effect describes the phenomenon whereby consensus can take hold quickly, as other group members “hop on the ban...
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divergent thinking, where you actively try to get thinking to diverge in order to discover multiple possible solutions, as opposed to convergent thinking, where you actively try to get thinking to converge on one solution.
Another way, easily enabled by the internet, is to crowdsource ideas, where you seek (source) ideas
quite literally from anyone who would like to participate (the crowd).
Diversity of opinion: Crowdsourcing works well when it draws on different people’s private information based on their individual knowledge and experiences. Independence: People need to be able to express their opinions without influence from others, avoiding groupthink. Aggregation:
prediction market, which is like a stock market for predictions.
Retrospective analysis showed that diversity of opinion seemed lacking and that participants in the prediction market likely didn’t have enough direct contact with Trump or Brexit supporters.
superforecasters, people who make excellent forecasts, repeatedly.
In a book entitled Superforecasting, Tetlock examines characteristics that lead superforecasters to make such accurate predictions.
business case, a document that outlines the reasoning behind your decision.
You are laying out your premises (principles) and explaining how they add up to your conclusion (decision). You are making your case.
to better uncover and imagine how different possible career futures could unfold.
analyze the seemingly best possible career paths more numerically through cost-benefit analysis, or using a decision tree if some of the choices are more probabilistic in nature.
When making any quantitative assessment, run a sensitivity analysis across inputs to uncover key drivers and appreciate where you may need to seek greater accuracy in your assumptions. Pay close attention to any discount rate used.
For really complex systems or decision spaces, consider simulations to help you better assess what may happen under different scenarios.
Watch out for blind spots that arise from groupthink. Consider divergent and lateral thinking techniques when working with groups, including seeking more diverse points of view.
Strive to understand the global optimum in any system and look for decisions tha...
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arms race. The term was originally used to describe a race between two or more countries to accumulate weapons for a potential armed conflict.
escalating competition.
There is usually no clear end to the race, as all sides continually eat up resources that could be spent more usefully elsewhere.
As an individual, avoiding an arms race means not getting sucked into keeping up with the Joneses. You want to use your income on things that make you fulfilled (such as on family vacations or on classes that interest you), rather than on unfulfilling status symbols.
avoiding an arms race means differentiating yourself from the competition instead of pursuing a one-upmanship strategy on features or deals, which can eat away at your profit margins. By focusing on your unique value proposition, you can devote more resources to improving and communicating it rather than to keeping up with your competition.
Hence the dilemma: do you risk their betrayal, or can you trust their solidarity and emerge with a small sentence?
The dual betrayal with its dual five-year sentences is known as the Nash equilibrium of this game, named after mathematician John Nash, one of the pioneers of game theory and the subject of the biopic A Beautiful Mind. The Nash equilibrium is a set of player choices for which a change of strategy by any one player would worsen their outcome. In this case, the Nash equilibrium is the strategy of dual betrayals, because if either player instead chose to remain silent, that player would get a longer sentence. To both get a shorter sentence, they’d have to act cooperatively, coordinating their
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is the most likely outcome unless something is done to change the parameters of the game.
In an iterated game of prisoner’s dilemma, cooperating in a tit-for-tat approach usually results in better long-term outcomes than constant betrayal. You can start out cooperating, and thereafter follow suit with what your opponent has recently done. In
you are known as a betrayer, people will not want to be your friend or do business with you.
The mental model this study illustrates is called reciprocity, whereby you tend to feel an obligation to return (or reciprocate) a favor, whether that favor was invited or not.
Quid pro quo (Latin for “something for something”)
commitment—if you agree (or commit) to something, however small, you are more likely to continue to agree later. That’s because not being consistent causes psychological discomfort, called cognitive dissonance (see Chapter 1).
calls liking. Quite simply, you are more prone to take advice from people you like, and you tend to like people who share characteristics with you.
across sixty different countries, found that 83 percent of people trusted recommendations from their friends and family (people they typically like), a higher rate than any form of advertising studied.
fourth influence model is known as social proof, drawing on social cues as proof that you are making a good decision.
Scarcity is another influence model, this one describing how you become more interested in opportunities the less available they are, triggering your fear of missing out (FOMO).
authority, which describes how you are inclined to follow perceived authority figures.
