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November 8, 2023 - February 15, 2024
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.
We’re busier than ever at work, but most of the time what we’re busy doing is putting out fires—fires that started with a poor initial decision made years earlier, which should’ve been prevented in the first place.
When you really understand a problem, the solution seems obvious.
the definition principle: Take responsibility for defining the problem. Don’t let someone define it for you. Do the work to understand it. Don’t use jargon to describe or explain it. the root cause principle: Identify the root cause of the problem. Don’t be content with simply treating its symptoms.
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?”
safeguard: Build a problem-solution firewall. Separate the problem-defining phase of the decision-making process from the problem-solving phase.
the best way to avoid finding the perfect solution to the wrong problem at work, when time allows, is to hold two separate meetings: one to define the problem, and one to come up with the solution.
The most precious resources in any organization are time and the brainpower of your best employees.
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?”
tip: Remember that writing out the problem makes the invisible visible. Write down what you think the problem is, and then look at it the next day. If you find yourself using jargon in your description, it’s a sign that you don’t fully understand the problem. And if you don’t understand it, you shouldn’t be making a decision about it.
Time eventually reveals short-term solutions to be Band-Aids that cover deeper problems. Don’t be fooled!
“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.”[1]
We all face difficult problems. The defaults narrow our perspective. They narrow our view of the world and tempt us to see things as we wish them to be, not as they are. Only by dealing with reality—the often-brutal truth of how the world really works—can we secure the outcomes we want.
Novices fail to see the complexities of a problem that are apparent to a master. Masters see the simplicity hiding in the complexity.
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.”[6]
purely negative criteria aren’t decisive: they don’t narrow the field of options down to one. As a result, people end up leaving the ultimate choice up to chance or circumstance. As the old saying goes, “If you don’t know where you want to go, any road will take you there.”
When you’re clear on what’s important, evaluating options becomes easier. Many people are shy to pick out the most important thing because they don’t want to be wrong.
When you don’t communicate what’s most important, people are left guessing about what matters.
A lot of managers secretly enjoy being the bottleneck. They like the way it feels when their team is dependent on them. Don’t be fooled! This is the ego default at work, and it puts a ceiling on how far you will go. It tries to convince you that you’re the best; that you’re so smart, so skilled, so insightful that only you can make the decisions. In reality, you’re just getting in the way of the team performing at its best.
the hifi principle: Get high-fidelity (HiFi) information—information that’s close to the source and unfiltered by other people’s biases and interests.
The quality of your decisions is directly related to the quality of your thoughts. The quality of your thoughts is directly related to the quality of your information.
A lot of the information we consume is in the form of highlights, summaries, or distillations. It’s the illusion of knowledge. We learn the answer but can’t show our work.
information without understanding is dangerous.
Information is food for the mind. What you put in today shapes your solutions tomorrow. And just as you are responsible for the food that goes into your mouth, you are responsible for the information that goes into your mind. You can’t be healthy if you feed yourself junk food every day, and you can’t make good decisions if you’re consuming low-quality information. Higher quality inputs lead to higher quality outputs.
In the restaurant business, there are chefs and there are line cooks.[2] Both can follow a recipe. When things go according to plan, there is no difference in the process or the result. But when things go wrong, the chef knows why. The line cook often does not. The chef has cultivated depth of understanding through years of experience, experimentation, and reflection, and as a result, the chef, rather than the line cook, can diagnose problems when they arise.[*]
When you’re getting information from other people, you need to keep an open mind. That means withholding your own judgment as long as possible. People often undermine the information-gathering process by subjecting others to their judgments, beliefs, and perspective.
Don’t ask people what they think; instead, ask them how they think.
Getting at those principles requires asking the right kinds of questions. There are three I’d recommend: Question 1: What are the variables you’d use to make this decision if you were in my shoes? How do those variables relate to one another? Question 2: What do you know about this problem that I (or other people) don’t? What can you see based on your experience that someone without your experience can’t? What do you know that most people miss? Question 3: What would be your process for deciding if you were in my shoes? How would you go about doing it? (Or: How would you tell your
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Get high-expertise (HiEx) information, which comes both from people with a lot of knowledge and/or experience in a specific area, and from people with knowledge and experience in many areas.
Helping others achieve their goals is one of the things that make life and work meaningful.
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.
“You need to be so careful when there is one simple diagnosis that instantly pops into your mind that beautifully explains everything all at once. That’s when you need to stop and check your thinking.”
signs you’ve hit the limit of useful information you can gather: You are able to argue credibly for and against the options you’re considering from all angles. You’re stretching for insight by asking people for advice who are more than one step removed from the problem or who don’t have experience solving problems of this sort. You feel like you need to learn more, but you’ve stopped learning new things, and are instead in a constant loop reviewing the same information (or same arguments) over and over.
tip: The margin of safety is often sufficient when it can absorb double the worst-case scenario. So the baseline for a margin of safety is one that could withstand twice the amount of problems that would cause a crisis, or maintain twice the amount of resources needed to rebuild after a crisis.
self-serving bias, the tendency to evaluate things in ways that enhance our self-image. When we succeed at something, we tend to attribute our success to our ability or effort. By contrast, when we fail at something, we tend to attribute our failure to external factors. Basically, heads I’m right. Tails, I’m not wrong.
Our ego default wants us to think that we’re smarter than we are and tells us that we work harder and know more than we actually do. The overconfidence that the ego demon inspires prevents us from examining our decisions with a critical eye.
the process principle: When you evaluate a decision, focus on the process you used to make the decision and not the outcome.
You can only control the process you use to make the decision. It’s that process that determines whether a decision is good or bad. The quality of the outcome is a separate issue.
luck isn’t a repeatable process that secures good results over the long term. Luck isn’t something you can learn, and it isn’t something you can get better at. Luck won’t give you an edge.
the transparency principle: Make your decision-making process as visible and open to scrutiny as possible.
GOOD DECISION-MAKING COMES down to two things: 1. Knowing how to get what you want 2. Knowing what’s worth wanting
Real wisdom doesn’t come from chasing success but from building character. As Jim Collins wrote, “There is no effectiveness without discipline, and there is no discipline without character.”[1]
Say things now to people you care about—whether it’s expressing gratitude, asking forgiveness, or getting information.
Spend the maximum amount of time with your children.
Savor daily pleasures instead of waiting for “big-ticket items...
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Work in a job y...
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