Peter Hollins - Mental Models

📖 https://www.goodreads.com/en/book/show/45027848

MMs

1. Address "Important"; Ignore "Urgent" to separate priorities from impostors
2. Visualize All the Dominoes to make decisions as informed as possible
3. Make Reversible Decisions to remove indecisions and have a bias to action
4. Seek "Satisfiction" to achieve your priorities and ignore what doesn't matter
5. Stay within 40% - 70% to balance information with action
6. Minimize Regret by consulting the future you on decisions
7. Ignore "Black Swans" to understand how outliers shouldn't change your thinking
8. Look for Equilibrium Points to find real patterns in data and not be fooled
9. Wait for the Regression to the Mean to find real patterns in data and not be fooled
10. What Would Bayes Do to calculate probabilities and predict the future based on real events
11. Do It Like Darwin to seek real, honest truth in a situation
12. Think With System 2 to think analytically instead of emotionally
13. Peer Review Your Perspectives to understand the consensus view and why you might differ
14. Find Your Own Flaws to scrutinize yourself before others can
15. Separate Correlation From Causation to understand what truly needs to be addressed to solve a problem

Decision Making For Speed And Context

To the man with only a hammer, every problem looks like a nail.

• Abraham Maslow

A mental model is a blueprint to emphasize important aspects of whatever you're facing, and it defines context, background and direction.

Without them, you are only able to see the haphazard, individual elements with no connection to each other.

A chef is someone who has the mental models of flavor profiles, what basic ingredients are needed for a stock or a sauce, typical techniques for different meats, and the conventional beverage and food pairings.

You can think of mental models as life heuristics or guidelines to evaluate and comprehend.

Mental models aren't perfect representations of the world around us, they serve to separate the signal from the noise for a specific perspective.

Too few mental models limit your capability to comprehend.

MM #7: Ignore "Black Swans" to understand how outliers shouldn't change your thinking

The name comes from the fact that 18th century Europeans thought all swans were white because they never was a black one. When they discovered black swans in Australia, it was a discovery that challenged many cultural and scientific notions but didn't end up making much difference to anything.

Nasim Taleb takes this idea as a metaphor to describe unpredictable events that could lead to a massive change in perception, perspective and understanding but don't. Anomalous outliers should not change perception or accepted knowledge and should mainly create awareness of possibilities.

On the global scale, events such as the fall of the Berlin Wall, 9/11 or assassination of a public figure could be considered black swan events. On a personal scale this can be a factory suddenly closing, parents divorcing, or a house being burgled.

There is an impact for sure but how much should we truly account for these outliers?

Black swan event has three elements:

1. It's a big surprise (completely unforeseeable)
2. It has a major effect (immense outcome)
3. People attempt to rationalize if after it happens (hindsight is 2020)

Look past the gravity of the black swan event and see the whole picture.

When faced with a big event, business or personal, allow room to consider that it may very well be a black swan event that, while important, is not indicative of anything at all.

Ask how likely is for this event to occur again? How much of an outlier it is? Should it change the way you behave?

https://en.wikipedia.org/wiki/Gambler's_fallacy and Apophenia are related to Black Swan events.

Apophenia is the tendency to mistakenly perceive connections and meaning between unrelated things.