Clear Thinking: Turning Ordinary Moments into Extraordinary Results

by Shane Parrish

Roger Martin put it this way: “Thinkers who exploit opposing ideas to construct a new solution enjoy a built-in advantage over thinkers who can consider only one model at a time.” He’s right. Not only do integrative thinkers build an advantage, they also tend to capture exponential upside because they break free of traditional ways of thinking.

the opportunity-cost principle: Consider what opportunities you’re forgoing when you choose one option over another.

the 3-lens principle: View opportunity costs through these three lenses: (1) Compared with what? (2) And then what? (3) At the expense of what?[*]

the targeting principle: Know what you’re looking for before you start sorting through the data.

the hifi principle: Get high-fidelity (HiFi) information—information that’s close to the source and unfiltered by other people’s biases and interests.

safeguard: Run an experiment. Try something out to see what kinds of results it yields.

safeguard: Evaluate the motivations and incentives of your sources. Remember that everyone sees things from a limited perspective.

safeguard: 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.

the hiex principle: 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.

safeguard: Take time to distinguish real experts from imitators. Not everyone who claims to be an expert is. Take the time to know the difference.

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.

In my life and in the lives of people I’ve worked with, these are some 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.

It’s much easier to plan for things that could go wrong in advance when you’re calm and open-minded than it is to respond when things are in the midst of going wrong.

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.

One of Warren Buffett’s core tenets for buying a business is that if he doesn’t understand it, he doesn’t buy it.

That’s why I created a rule for myself: I make major decisions and then sleep on them before telling anyone.[*]

However, it turned out that sleeping on decisions by itself wasn’t enough. I added another element to the rule: before going to bed, I would write a note to myself explaining why I’d made the decision.

Living with a decision before announcing it allows you to look at it from a new perspective and verify your assumptions.

The Fail-Safe Principle Implementing fail-safes will help ensure that your decision is executed according to plan.

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

fail-safe: Set up trip wires to determine in advance what you’ll do when you hit a specific quantifiable time, amount, or circumstance.

fail-safe: Use commander’s intent to empower others to act and make decisions without you.

Giving a team enough structure to carry out a mission but enough flexibility to respond to changing circumstances is called commander’s intent—a military term first applied to the Germans who were trying to defeat Napoleon. If you’ve ever been on the inside

Commander’s intent empowers each person on a team to initiate and improvise as they’re executing the plan. It stops you from being the bottleneck, and it enables the team to keep each other accountable to the goal without your presence.

fail-safe: Tie your hands to keep your execution on track.

Whatever decision you’re facing, ask yourself, “Is there a way to make sure I will stick to the path I’ve decided is best?”

If you’re a knowledge worker, you produce decisions.[1] That’s your job. The quality of your decisions eventually determines how far you go and how fast you get there. If you learn to make great decisions consistently, you’ll quickly move past the people whose decisions are merely good.

the process principle: When you evaluate a decision, focus on the process you used to make the decision and not the outcome.

But his confidence in the decision was unwavering. Why? Because he knew the reasons why he had made the call. He knew his logic was sound. All he could do was learn from the outcome.

A bad process can never produce a good decision. Sure, it might result in a good outcome, but that’s different from making a good decision. Outcomes are influenced in part by luck—both good and bad. Getting the right result for the wrong reasons isn’t a function of smarts or skills, but just blind luck.

the transparency principle: Make your decision-making process as visible and open to scrutiny as possible.

If you don’t check your thinking at the time you made the decision—what you knew, what you thought was important, and how you

reasoned about it—you’ll never know whether you made a good decision or just got lucky.

safeguard: Keep a record of your thoughts at the time you make the decision. Don’t rely on your memory after the fact. Trying to recall what you knew and thought at the time you made the decision is a fool’s game.

The only way to see clearly what you were thinking

at the time you made the decision is to keep a record of your thoughts at the time you were making the decision.

Writing down your thoughts offers several benefits. One benefit is that a written record provides information about your thought process at the time you made t...

Later, when you reflect on your decision, having that record is helpful for counteracting the distorting effects of the ego default. You can truthfully answer questions like, “What did I know at the time I made the decision?” and, “Did the things I anti...

A second benefit of recording your thoughts is that in the process of writing something, you often realize you don’t really understand it as well as ...

cheaper) to realize this before making your decision instead of after. If you do so in advance, you have an opportunity to get more informa...

A third benefit to writing down your thoughts is that it allows other people to see your thinking, which is mostly invisible. And if they can see it, they can check it for errors and offer a different perspective that you might otherwise be blind to. If you can’t simply explain your thinking to other people (or yourself), it’s a sign t...

GOOD DECISION-MAKING COMES down to two things:

1. Knowing how to get what you want 2. Knowing what’s worth wanting

Each default plays a role in setting us up for regret. The social default prompts us to inherit goals from other people, even if their life circumstances are very different from ours. The inertia default encourages us to continue pursuing the goals we’ve pursued in the past, even after we’ve come to realize that achieving them doesn’t make us happy. The emotion default sends us this way and that, chasing whatever captures our fancy in the moment, even at the expense of pursuing long-term goals that matter more. And the ego default convinces us to pursue things like wealth, status, and power, even at the expense of happiness and well-being—our own and that of the people around us. If you give any of the defaults command of your life, your ultimate destination is regret. Don’t live life by another person’s scoreboard. Don’t let someone else choose your objectives in life. Take responsibility for where you are and where you are headed. 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]

The quality of what you pursue determines the quality of your life.