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preserving optionality. The idea is to make choices that preserve future options.
put some excess profits into a rainy-day fund, or as an employee you dedicate some time to learning new skills that might give you options for future employment.
maybe you can delay deciding at all (see thinking gray in Chapter 1) and, instead, continue to wait for more information, keeping your options open until you are ...
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When selecting a graduate school, Lauren chose a program in operations research as a way of preserving optionality, rather than a more narrowly tailored program in biostatistics. However, not having a strong idea of what area she wanted to research for her dissertation ultimately resulted in an extra year of school.
You need to find the right balance between preserving optionality and path dependence.
the precautionary principle: when an action could possibly create harm of an unknown magnitude,
For example, if there is reason to believe a substance might cause cancer, the precautionary principle advises that it is better to control it tightly now while the scientific community figures out the degree of harm, rather than risk people getting cancer unnecessarily because the substance has not been controlled.
Beyond physical harm, the same concept applies to other kinds of harm: for example, financial harm (gambling or accepting a bad loan) and emotional harm (infidelity or going too far in an argument).
These mental models are the most useful when thinking about existential risks.
Therefore, you want first to assess what substantial harms could arise in the long term, then work backward to assess how your short-term decisions (or lack thereof) might be contributing to long-term negative sc...
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Nothing in excess. Our modern equivalent is too much of a good thing.
Roman writer Marcus Seneca said, “The abundance of books is a distraction”—in the first century A.D.!
There is a name for this unintended consequence: analysis paralysis,
The model perfect is the enemy of good drives home this point—if you wait for the perfect decision, or perfect anything, really, you may be waiting a long time indeed.
You can deal with this conflict by categorizing decisions as either reversible decisions or irreversible decisions.
Think of selling your business or having a kid.
As organizations get larger, there seems to be a tendency to use the heavy-weight [irreversible] decision-making process on most decisions, including many [reversible] decisions. The end result of this is slowness, unthoughtful risk aversion, failure to experiment sufficiently, and consequently diminished invention.
Hick’s law to remember that decision time is going to increase with the number of choices, and so if you want people to make quick decisions, reduce the number of choices.
In addition to increased decision-making time, there is evidence that a wealth of options can create anxiety in certain contexts. This anxiety is known as the paradox of choice,
Schwartz explains that an overabundance of choice, the fear of making a suboptimal decision, and the potential for lingering regret following missed opportunities can leave people unhappy.
decision fatigue. As you make more and more decisions, you get fatigued, leading to a worsening of decision quality.
by reducing the number of everyday decisions, such as what to eat or wear, so that they can reserve their decision-making faculties for more important decisions.
“I’m trying to pare down decisions. I don’t want to make decisions about what I’m eating or wearing. Because I have too many other decisions to make.”
If you want more variety in your life, one suggestion is to front-load the decisions on your outfits and meals for the week to Sunday.
from market failure to perverse incentives, from too much focus on the short term to too much of a good thing.
Murphy’s law: Anything that can go wrong, will go wrong.
Be careful when basing rewards on measurable incentives, because you are likely to cause unintended and undesirable behavior (Goodhart’s law).
Short-termism can easily lead to the accumulation of technical debt and create disadvantageous path dependence; to counteract it, think about preserving optionality and keep in mind the precautionary principle.
Internalize the distinction between irreversible and reversible decisions, and don’t let yourself succumb to an...
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Heed Murphy...
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called north star, which refers to the guiding vision of a company.
Without a north star, you can be easily “lost at sea,” susceptible to the unintended consequences of short-termism (see Chapter 2).
“People often overestimate what will happen in the next two years and underestimate what will happen in the next ten.”
Gates wrote this statement in a business context, as a warning to not ignore far-off threats that can grow into major disrupters.
“My wealth has come from a combination of living in America, some lucky genes, and compound interest”
Compound interest explains why it’s easy for the rich to get richer. They can make more money from investing their already abundant capital, as opposed to having to earn more money just from their labor.
Two-front wars played a major role in World Wars I and II, when Germany twice fought both Russia on its eastern front and Western allies on its western front. Each time, dividing its attention contributed significantly to Germany’s eventual defeat.
An anonymous saying captures this concept well: “If you chase two rabbits, both will escape.”
You can fully perform only one high-concentration activity at a time.
the top idea in your mind
The tricky part is, you can only control it indirectly.
think most people have one top idea in their mind at any given time.
Peter would enforce this pretty strictly. He would say, I will not talk to you about anything else besides this one thing I assigned you. I don’t want to hear about how great you are doing over here, just shut up, and Peter would run away. .
A+ problems are high-impact problems for your company, but they are difficult.
You don’t wake up in the morning with a solution, so you tend to procrastinate them.
You have a company that is always solving B+ things, which does mean you grow, which does mean you add value, but you never really create that breakthrough idea. No one is spending 100% of their time banging their head against the wall every day until they solve it.
it is critical that this top idea in your mind is an important one.
“What is important is seldom urgent and what is urgent is seldom important.”
The essential insight to be gained from this matrix is that the important activities in quadrant II are often overshadowed by the urgent distractions in quadrant III.
Similarly, the Not Urgent/Not Important things in quadrant IV can be attractive distractions because they provide immediate gratification (like completing a busywork task quickly) or are fun (like mindless phone games).
