Clear Thinking by Shane Parrish - Summary and Notes

Thursday. October 26, 2023 - 59 mins

Summary / Top Takeaways

Shane talks about how there are 4 defaults we are programmed on and it serves our best interest to conciously be aware of these defaults. The defaults are 1. The emotion default: we tend to respond to feelings rather than reasons and facts. 2. The ego default: we tend to react to anything that threatens our sense of self-worth or our position in a group hierarchy. 3. The social default: we tend to conform to the norms of our larger social group. 4. The inertia default: we’re habit forming and comfort seeking. We tend to resist change, and to prefer ideas, processes, and environments that are familiar.

To overcome defaults, you’ll need to build your strength. According to Shane, there are 4 key strengths 1) Self-accountability: holding yourself accountable for developing your abilities, managing your inabilities, and using reason to govern your actions 2) Self-knowledge: knowing your own strengths and weaknesses—what you’re capable of doing and what you’re not 3) Self-control: mastering your fears, desires, and emotions 4) Self-confidence: trusting in your abilities and your value to others

You also need to manage your weakness. I love this line “The formula for failure is a few small errors consistently repeated.” To overcome these errors, Shane’s book highlights a few safeguards to prevent making bad decisions. My favorite was taking time to reflect on what contributed to the mistakes by exploring the thoughts and feelings behind them.

There are two principles that follow the example of the best decision makers:

Take responsiblity for defining the problem.
Identify the root cause of that problem.

And finally, if you want to improve your judgement ask yourself “What do I want in life? And is what I want actually worth wanting?”

Favorite Quotes and Chapter Notes

I went through my notes and captured key quotes from all chapters below.

P.S. – Highly recommend Readwise if you want to get the most out of your reading.

Introduction: The Power of Clear Thinking in Ordinary Moments

A good position allows you to think clearly rather than be forced by circumstances into a decision. One reason the best in the world make consistently good decisions is they rarely find themselves forced into a decision by circumstances. You don’t need to be smarter than others to outperform them if you can out-position them. Anyone looks like a genius when they’re in a good position, and even the smartest person looks like an idiot when they’re in a bad one.
What a lot of people miss is that ordinary moments determine your position, and your position determines your options. Clear thinking is the key to proper positioning, which is what allows you to master your circumstances rather than be mastered by them.

Part 1: The Enemies of Clear Thinking

There’s nothing stronger than biological instincts. They control us often without us even knowing. Failing to come to terms with them only makes you more susceptible to their influence.
…Like all animals, we are naturally prone to defend our territory. We might not be defending a piece of terrain on the African savanna, but territory isn’t just physical, it’s also psychological. Our identity is part of our territory too. When someone criticizes our work, status, or how we see ourselves, we instinctively shut down or defend ourselves. When someone challenges our beliefs, we stop listening and go on the attack. No thoughts, just pure animal instinct.
We’re naturally wired to organize the world into a hierarchy. We do this to help make sense of the world, maintain our beliefs, and generally feel better. But when someone infringes on our place in the world and our understanding of how it works, we react without thinking. When someone cuts you off on the highway and road rage kicks in, that’s your unconscious mind saying,“Who are you to cut me off?”
We’re self-preserving. Most of us would never intentionally push someone else down to get where we want to go.[*] The key word here is“intentionally,” because intention involves thought. When we’re triggered and not thinking, our desire to protect ourselves first takes over. When layoffs loom at a company, otherwise decent people will quickly throw each other under the bus to keep a job.
While there are many such instincts, four stand out to me as the most prominent, the most distinctive, and the most dangerous.
1. The emotion default: we tend to respond to feelings rather than reasons and facts. 2. The ego default: we tend to react to anything that threatens our sense of self-worth or our position in a group hierarchy. 3. The social default: we tend to conform to the norms of our larger social group. 4. The inertia default: we’re habit forming and comfort seeking. We tend to resist change, and to prefer ideas, processes, and environments that are familiar.
Confidence doesn’t make bad outcomes any less likely or good outcomes more likely, it only blinds us to risk.
One reason people find it hard to empower others at work is that having them depend on us for every decision makes us feel important and indispensable. Having them depend on us makes us feel not only necessary but powerful. The more people who depend on us the more powerful we feel.
If you do what everyone else does, you’ll get the same results that everyone else gets.[*] Best practices aren’t always the best. By definition, they’re average. If you don’t know enough about what you’re doing to make your own decisions, you probably should do what everyone is doing. If you want better-than-average results, though, you’ll have to think clearly. And thinking clearly is thinking independently. Sometimes you have to break free of the social default and do something differently from those around you.
The people executing established practices say they want new ideas, but they just don’t want the bad ones. And because they so want to avoid the bad ones, they never deviate enough to find new good ones.
Lou Brock might have put it best when he said,“Show me a guy who’s afraid to look bad, and I’ll show you a guy you can beat every time.” In other words, someone who’s possessed by the social default is easy to defeat.
Warren Buffett similarly highlighted the effects of the social default in his 1984 letter to Berkshire Hathaway’s shareholders: Most managers have very little incentive to make the intelligent-but-with-some-chance-of-looking-like-an-idiot decision. Their personal gain/loss ratio is all too obvious: if an unconventional decision works out well, they get a pat on the back and, if it works out poorly, they get a pink slip.(Failing conventionally is the route to go; as a group, lemmings may have a rotten image, but no individual lemming has ever received bad press.)
Change happens only when you’re willing to think independently, when you do what nobody else is doing, and risk looking like a fool because of it. Once you realize you’ve been doing what everyone else is doing—and only because they’re already doing it—it’s time to try something new.
We like to think we’re open-minded and willing to change our beliefs when the facts change, but history has shown otherwise. When the automobile was first introduced, many critics dismissed it as a mere fad, arguing that horses and carriages were a more reliable mode of transportation. Similarly, when the airplane was first invented, people were skeptical of its practicality and safety. The radio, television, and internet all faced similar initial skepticism, yet despite this, each of these inventions has had a profound impact on the way we live today.
The people with the best defaults are typically the ones with the best environment. Sometimes it’s part of a deliberate strategy, and sometimes it’s just plain luck.
Joining groups whose default behaviors are your desired behavior is an effective way to create an intentional environment.

Part 2: Building Strength

Establishing rituals is the key to creating positive inertia. Rituals focus the mind on something other than the moment. They can be as simple as taking a quick pause before responding to someone’s point of contention at work.
Rituals force the mind to focus on the next play, not the last one.
Here are four key strengths you’ll need: Self-accountability: holding yourself accountable for developing your abilities, managing your inabilities, and using reason to govern your actions Self-knowledge: knowing your own strengths and weaknesses—what you’re capable of doing and what you’re not Self-control: mastering your fears, desires, and emotions Self-confidence: trusting in your abilities and your value to others
External rewards are nice, but they’re optional; you don’t need them to do your best. Your honest judgments about yourself are more important than anyone else’s.
the Roman slave Publilius Syrus once said,“Anyone can steer the ship when the sea is calm.”[*]
One effective question to ask yourself before you act is,“Will this action make the future easier or harder?”[*]
If you never say,“I don’t know,” you’re probably dismissing things that surprise you or explaining away outcomes instead of understanding them.
Charlie Munger elaborated on the same idea my real estate investor friend had put forth. He said,“When you play games where other people have the aptitude and you don’t, you’re going to lose. You have to figure out where you have an edge and stick to it.”
Knowing about your strengths and weaknesses, your abilities and their limits is essential to counteracting your defaults. If you don’t know your vulnerabilities, your defaults will exploit them to gain control of your circumstances.
A large part of achieving success is having the self-control to do whatever needs to be done, regardless of whether you feel like doing it at the moment.
You need self-confidence to think independently and to stand firm in the face of social pressure, ego, inertia, or emotion. You need it to understand that not all results are immediate, and to focus on doing what it takes to earn them eventually.
Every successful task only further serves to deepen your trust in yourself, and that’s how confidence is earned.
But while confidence is often a byproduct of our accomplishments, it also comes from how you talk to yourself.
It’s important to talk to yourself about the adversity you’ve faced, because past hardship is where you get the confidence to face future hardship.
The most valuable people, he continued, weren’t the ones with the best initial ideas, but the ones with the ability to quickly change their minds. They were focused on outcome over ego.
Self-confidence is the strength to focus on what’s right instead of who’s right. It’s the strength to face reality. It’s the strength to admit mistakes, and the strength to change your mind.
Leaving this job illustrates the four strengths in action. I had the self-confidence that I could figure out what came next without needing to know all the details, the self-knowledge to know that I valued time over money, the self-control to get up the next day without missing a beat, and the self-accountability to set a higher standard for performance than I ever had before.
The first step to building any of your strengths is raising the standards to which you hold yourself, a practical matter of looking around at the people and practices that pervade your day-to-day environment.
Champions don’t create the standards of excellence. The standards of excellence create champions.[*]
The difference between average and exceptional results for a leader often comes down to whether they’re consistently getting more out of smart but otherwise lazy people.
When we accept substandard work from others, it’s for the same reason: we’re not all in. When you’re committed to excellence, you don’t let anyone on your team half-ass it. You set the bar, you set it high, and you expect anyone working with you to work just as hard and level up to what you expect or above. Anything less is unacceptable.
We’ll never be exceptional at anything unless we raise our standards, both of ourselves and of what’s possible. For most of us, that sounds like a lot of work. We gravitate toward being soft and complacent. We’d rather coast. That’s fine. Just realize this: if you do what everyone else does, you can expect the same results that everyone else gets. If you want different results, you need to raise the bar.
Working with a master firsthand is the best education; it’s the surest way of raising the bar. Their excellence demands your excellence. But most of us aren’t lucky enough to have that opportunity. Still, not all is lost. If you don’t have the chance to work with a master directly, you can still surround yourself with people who have higher standards by reading about them and their work.
There are two components to building strength by raising the bar:(a) Choose the right exemplars—ones that raise your standards. Exemplars can be people you work with, people you admire, or even people who lived long ago. It doesn’t matter. What matters is they make you better in a certain area, like a skill, trait, or value.(b) Practice imitating them in certain ways. Create space in the moment to reflect on what they’d do in your position, and then act accordingly.
“No technique has been more responsible for my success in life than studying and adopting the good models of others.”
In his letters to Lucilius, Seneca urges him to choose a role model or exemplar to provide a standard to live by: The mind should have someone whom it can respect—someone whose authority might make even its inner shrine more hallowed. Happy is he who can so respect a man that the very memory of that man can calm and direct him! He who can thus respect another will quickly be respected himself. Therefore, choose a Cato, or if this seems too strict for you, choose a gentler spirit—a man like Laelius. Choose someone whose life and speech pleases you, and who displays outwardly the same character he has. Present him to yourself always as your guardian or exemplar. There is need, I insist, for someone against whom to measure our way of life; unless you have a ruler, you can’t straighten what is crooked.
One of the biggest mistakes that I see people make is they don’t want to learn from someone who has a character blemish or a worldview that doesn’t align with theirs. Seneca captured the right approach when he said in On the Tranquility of the Mind,“I shall never be ashamed of citing a bad author if the line is good.” Or, as Cato the Elder put it,“Be careful not to rashly refuse to learn from others.” Don’t throw away the apple because of a bruise on the skin.
Seneca said,“Happy is he who can improve others not just when he is in their presence, but even when he is in their thoughts!”

Part 3: Managing Weakness

The formula for failure is a few small errors consistently repeated.
“Show me an organization in which employees take ownership, and I will show you one that beats its competitors,” says Abrashoff.“Captains need to see the ship from the crew’s perspective. They need to make it easy and rewarding for crew members to express themselves and their ideas.”
Safeguard Strategy 1: Prevention
If you have an important decision to make, ask yourself:“Am I hungry? Am I angry or otherwise emotional? Am I lonely or otherwise stressed by my circumstances, such as being in an unfamiliar environment or pressed for time? Am I tired, sleep-deprived, or physically fatigued?” If the answer is yes to any of these questions, avoid making the decision if you can. Wait for a more opportune time. Otherwise, your defaults will take over.
Safeguard Strategy 2: Automatic Rules for Success
In a quirk of psychology, people typically don’t argue with your personal rules. They just accept them as features of who you are. People question decisions, but they respect rules.
Kahneman told me his favorite rule was never to say yes to a request on the phone. He knows that he wants people to like him, so he wants to say yes in the moment, but after filling up his schedule with things that didn’t make him happy, he decided to be more vigilant about what he agrees to do and why. When people ask him for things over the phone now, he says something along the lines of,“I’ll have to get back to you after I think about it.” Not only does this give him time to think without the immediate social pressure, but it also allows a lot of these requests to just drop away because people choose not to follow up. He rarely gets back to any of these people and says yes.[*]
The way I did this was to imagine a film crew following me around documenting how successful I was.[*] Regardless of whether I was a success or not, how would I act to show someone I deserved my success? What would I want them to see? What am I doing that I would want them not to see because I’m embarrassed or ashamed?
Safeguard Strategy 3: Creating Friction
Safeguard Strategy 4: Putting in Guardrails
Another safeguarding strategy is to formulate operating procedures for yourself because you know from hard experience when your defaults tend to override your decision-making.
Checklists, for instance, offer a simple way to override your defaults.
Safeguard Strategy 5: Shifting Your Perspective
The problem was that he couldn’t relate to other people because he hadn’t even made any effort to see things through their eyes. Now he’d come to realize it himself and started to change his behavior. From that point on, whenever he discussed something with anyone at work, he would start by offering his impressions of how the other person saw things. Then he would ask,“What did I miss?”
If you want to see whether your thinking is wrong, you need to make it visible. Making what was previously invisible visible gives us the best chance of seeing what we knew and what we thought at the time we made a decision. Relying on memory won’t work because the ego distorts information to make us look better than we actually were.
The first mistake is expensive; the second one costs a fortune.
Take time to reflect on what you contributed to the mistake, by exploring the various thoughts, feelings, and actions that got you here.

Part 4: Decisions: Clear Thinking in Action

Decisions are different from choices. If you casually select an option from a range of alternatives, you’ve made a choice. If you react without thinking, you’ve made an unconscious choice. But neither of these is the same as a decision. A decision is a choice that involves conscious thought. The decision = the judgment that a certain option is the best one
The first principle of decision-making is that the decider needs to define the problem.[*] If you’re not the one making the decision, you can suggest the problem that needs to be solved, but you don’t get to define it. Only the person responsible for the outcome does.
Defining the problem starts with identifying two things:(1) what you want to achieve, and(2) what obstacles stand in the way of getting it. Unfortunately, people too often end up solving the wrong problem.
The social default prompts us to accept the first definition people agree on and move forward. Once someone states a problem, the team shifts into“solution” mode without considering whether the problem has even been correctly defined. This is what happens when you put a bunch of smart, type A people together and tell them to solve a problem. Most of the time, they end up missing the real problem and merely addressing a symptom of it. They react without reasoning.
The best decision-makers know that the way we define a problem shapes everyone’s perspective about it and determines the solutions. The most critical step in any decision-making process is to get the problem right. This part of the process offers invaluable insight. Since you can’t solve a problem you don’t understand, defining the problem is a chance to take in lots of relevant information. Only by talking to the experts, seeking the opinions of others, hearing their different perspectives, and sorting out what’s real from what’s not can the decision-maker understand the real problem. When you really understand a problem, the solution seems obvious.
These two principles follow the example of the best decision-makers: 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?”
How to Safeguard the Problem-Defining Stage
There are two ways to safeguard this stage of the decision process against our defaults: create a firewall and use time to your advantage.
safeguard: Build a problem-solution firewall. Separate the problem-defining phase of the decision-making process from the problem-solving phase.
A mentor of mine once taught me that 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.
When you spend time trying to understand the problem, you realize that you have a room full of people who have insight that you don’t have. 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?”
And because everyone understands the problem, each person knows how to move their part of the organization in a way that solves it for everyone, not just themselves. An apocryphal quote often attributed to the philosopher Ludwig Wittgenstein sums up this idea:“To understand is to know what to do.”[*]
Probing and asking deeper questions slows down the process just enough to dramatically improve your chances of solving the right problem.
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.
safeguard: Use the test of time. Test whether you’re addressing the root cause of a problem, rather than merely treating a symptom, by asking yourself whether it will stand the test of time. Will this solution fix the problem permanently, or will the problem return in the future? If it seems like the latter, then chances are you’re only treating a symptom.
Short-term solutions might make sense in the moment, but they never win in the long term. You feel like you’re moving forward when you’re actually just going in circles. People gravitate toward them because finding a short-term fix signals to others that they’re doing something. That’s the social default at work.
“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.” Collins called this combination of faith in prevailing with the discipline to confront brutal facts the Stockdale Paradox.
Luckily, there’s a way to convert the hindsight of tomorrow into the foresight of today. It’s a thought experiment that psychologists call premortem. The concept isn’t new, it originates in Stoic philosophy. Seneca used premeditatio malorum(“the premeditation of evils”) to prepare for the inevitable ups and downs of life. The point isn’t to worry about problems; it’s to fortify and prepare for them.
If you haven’t thought about the things that could go wrong, you will be at the mercy of circumstances. Fear, anger, panic—when emotion consumes you, reason leaves you. You just react. The antidote is this principle: the bad outcome principle: Don’t just imagine the ideal future outcome. Imagine the things that could go wrong and how you’ll overcome them if they do.
If you’ve got a presentation to the board next week, imagine all the ways it could go wrong: What if technology fails? What if they can’t find the presentation? What if the audience isn’t engaged?
The venture capitalist Josh Wolfe likes to say,“Failure comes from a failure to imagine failure.”
the second-level thinking principle: Ask yourself,“And then what?”
When you solve a problem, you make a change in the world. That change can be either in line with your long-term objectives or not. For example, if you’re hungry and you eat a chocolate bar, you’ve solved the immediate hunger problem, but that solution has consequences: the inevitable sugar crash an hour or two later. If your longer-term goal is to be productive that afternoon, the chocolate bar is not the best solution to your immediate problem. It’s true that eating a chocolate bar once won’t ruin your diet or your day. But repeating that seemingly small error in judgment daily over the course of your lifetime will not put you in a position for success. Tiny choices compound. That’s why second-level thinking is needed.
You can think of first-level thinking as your today self and second-level thinking as your future self.
an important point about second-level thinking: it not only helps us avoid future problems, it also uncovers information we need to make a better decision—information
Problem-solving novices try to reduce a decision to just two options because it creates the false sense that they’ve gotten to the problem’s essence. In reality, they’ve just stopped thinking. And you never want to stop thinking! Novices fail to see the complexities of a problem that are apparent to a master. Masters see the simplicity hiding in the complexity. As Frederic Maitland purportedly once wrote,“Simplicity is the end result of long, hard work, not the starting point.”
the 3+ principle: Force yourself to explore at least three possible solutions to a problem. If you find yourself considering only two options, force yourself to find at least one more.
safeguard: Imagine that one of the options is off the table. Take each of the options you’re considering, and one at a time, ask yourself,“What would I do if that were not possible?”
Remember: Limiting ourselves to binary thinking before fully understanding a problem is a dangerous simplification that creates blind spots. False dualities prevent you from seeing alternative paths and other information that might change your mind. On the other hand, taking away one of two clear options forces you to reframe the problem and get unstuck.
Here’s the second safeguard against binary thinking: safeguard: Come up with Both-And options. Try to find ways of combining the binary. Think not in terms of choosing either X or Y, but rather having both X and Y.
F. Scott Fitzgerald once said,“The test of a first-rate intelligence is the ability to hold two opposed ideas in the mind at the same time, and still retain the ability to function. One should, for example, be able to see that things are hopeless and yet be determined to make them otherwise.”
Thinking better isn’t about filling your brain with answers to questions you’ve seen before. It’s not about memorizing what to do and when. It’s not about letting other people think for you either. It’s about looking beyond the things that are obvious and seeing the things that are hidden from view. The real world is full of trade-offs, some of which are obvious, and others that are hidden. Opportunity costs are the hidden trade-offs that decision-makers often have trouble assessing. Every decision has at least one of them.
The ability to size up hidden trade-offs is part of what separates great decision-makers from the rest. It’s also a core element of leadership.
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.”
There are two principles concerning opportunity costs. The first is this: the opportunity-cost principle: Consider what opportunities you’re forgoing when you choose one option over another. The second principle is closely related: 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?[*]
Let’s apply the second lens. Suppose you buy that house in the suburbs. Ask yourself,“And then what?” How will your circumstances change if you choose that option? For one thing, your commute might be different. Perhaps it goes from a predictable half hour each way to an unpredictable hour and a half. Now apply the third lens. Ask yourself,“At the expense of what?” What are you not going to be able to do because you’re spending an extra two to three hours a day in transit? Will you spend less time with your kids and your partner? What will you miss out on by not being with them? Will you be able to spend the commute learning a new language or reading some great literature, or will you have to deal with the frustration and stress of driving? Over time, which option is better for your mental and physical health?
tip: If you’re having trouble assessing opportunity costs, it sometimes helps to put a price on them. For example, putting a price on those extra two to three hours a day spent commuting will make them more visible and easier to assess.
You’ve worked out some potential solutions in detail. Each suggests a course of action that might work. You now need to evaluate the options and pick the one most likely to make the future easier. There are two components here:(1) your criteria for evaluating the options and(2) how you apply them.
Clarity: The criteria should be simple, clear, and free of any jargon. Ideally, you should be able to explain them to a twelve-year-old. Goal promotion: The criteria must favor only those options that achieve the desired goal. Decisiveness: The criteria must favor exactly one option; they can’t result in a tie among several.
Criteria that fail to satisfy these conditions often lead to decision-making errors. When criteria are too complicated, people have trouble knowing how to apply them. When they are ambiguous, people have a green light to interpret them in whichever way suits them. As a result, people end up applying criteria in different ways based on what they want or how they feel at the moment. Their decision-making process becomes a playground for the emotion default.
When deciding at work, criteria that are ambiguous or jargon-laden lend themselves to endless debates as to their meaning. We assume that everyone has a shared understanding of what these words and phrases mean. They don’t. We assume that our own definitions won’t change. They might. What a word like“strategic” means to one person is often different from what it means to another. As a result, ambiguous criteria rob decision-makers of their ability to distinguish who’s right from who’s wrong, and force debates about semantics instead of which potential solution is the best.
Sometimes criteria can promote the wrong goal—steering a team toward what it can do soonest, perhaps, instead of what’s best for the company in the long run.
Criteria can also fail to be decisive. If they don’t help you narrow the options, they’re not useful. Indecisive criteria are another sign that you don’t fully understand the problem and are operating out of fear that you’ll be wrong.
Defining the Most Important Thing Not all criteria are the same. There might be a hundred variables, but they are not equally important. 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.
I learned three important lessons that day. First, I couldn’t expect my team to make decisions on their own unless I told them how I wanted them to make those decisions. That meant focusing on the single most important thing and not inundating them with hundreds of variables to consider. Second, if they made the decision with the most important thing in mind, and it turned out wrong, I couldn’t get upset with them. If I did that, they’d never make decisions without me. The third lesson was perhaps the most revealing: I myself didn’t know what the most important thing was. That’s why I couldn’t tell them.
There is only one most important thing in every project, goal, and company. If you have two or more most important things, you’re not thinking clearly. This is an important aspect of leadership and problem-solving in general: you have to pick one criterion above all the others and communicate it in a way that your people can understand so they can make decisions on their own. This is true leadership.
But often, when we actually start pursuing an option, we find that we have to rank one criterion above another—even if only slightly. Most of the time, making your criteria battle is about calibrating shades of gray. It’s a mental exercise that takes you out of reactive mode and moves you toward deliberative thinking. Assigning quantitative values to your criteria often helps at this point. When you start comparing things and thinking how much you’ll pay for them—and whether in a currency of time, money, collective brain power—you gain clarity about what matters most to you and what doesn’t. You’re forced to think in terms of benefits and risks, and you start to see things you didn’t see before—previously invisible costs become visible. For all of these reasons, making your criteria battle moves you toward objectivity and accuracy, and helps reveal what you think is most important.
When it comes to getting information that’s accurate, there are two principles you should know: the HiFi Principle and the HiEx Principle.
the hifi principle: Get high-fidelity(HiFi) information—information that’s close to the source and unfiltered by other people’s biases and interests.
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.
But the further the information is from the original source, the more filters it’s been through before getting to you. Living on a diet of abstractions is like living on a diet of junk food: it has less nutritional value—less information content, which means you’re not learning as much.
How do we get better information? The person closest to the problem often has the most accurate information about it.
My friend Tim Urban has a good metaphor to explain this concept. In the restaurant business, there are chefs and there are line cooks. 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.[*]
History shows that the greatest thinkers all used information that they collected personally. They earned their knowledge the hard way either in the trenches of experience or through careful study of exemplars. They looked for raw, unfiltered information, and ventured out into the world to interact with it directly. Leonardo da Vinci is a great example. He kept journals throughout his life, and they contain notes about how he went about getting the right information. He wrote things like,“Get the master of arithmetic to show you how to square a triangle,” and“Get a master of hydraulics to tell you how to repair a lock, canal and mill in the Lombard manner.” Great thinkers understand the importance of high-quality information, and that other people’s abstractions are often limited in their usefulness.
No single person necessarily changes it much, but the more people it passes through, the more all those little changes accumulate. The same thing happens when information travels through an organization. It goes through multiple filters, including individual levels of understanding, political interpretation, and biases. Details are abstracted from the original, and the signal is lost. The various incentives people have when they communicate information end up complicating things even further.
If you want to make better decisions, you need better information. Whenever possible, you need to learn something, see something, or do something for yourself. Sometimes the best information is the least transmissible.
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.
When you’re gathering information, your job is to see the world through other people’s eyes. You’re trying to understand their experience and how they processed it. You can learn valuable information even when you don’t agree with their view of the world. Just ask questions, keep your thoughts to yourself, and remain curious about other perspectives.
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.
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 mother/friend to go about doing it?)
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.
When someone close to the problem isn’t available to you, look for people who recently solved a similar problem.
Experts can increase the accuracy of your information and decrease the time it takes to get it. Getting even one expert’s advice can cut through a lot of confusion and help you quickly formulate and/or eliminate options.
the first thing to understand is that experts love sharing what they’ve learned when they know it’ll make a difference. Helping others achieve their goals is one of the things that make life and work meaningful.
Remember: the goal isn’t to have someone tell you what to do; rather, it’s to learn how an expert thinks about the problem, which variables they consider relevant, and how those variables interact over time. If you present a problem, and an expert simply tells you what to do, they’re just giving you an abstraction. You might get the answer right, but you haven’t learned anything. And if things go wrong, which they inevitably will, you won’t have a clue as to why. You’re the line cook masquerading as the chef. If you ask them how they think about the problem, that’s when you start deepening your understanding.
Here are five tips: Show that you have skin in the game: When you reach out to an expert, make them aware of the time, energy, and money you’ve already invested in the problem. Let them know you’ve done the work and that you’re stuck.
Get precise on your ask: Be very clear what you’re looking for. Are you looking for them to review your plan and provide feedback? Are you looking for them to introduce you to people who can solve the problem? Whatever it is that you want, just be clear.
Show respect for their time and energy: Explicitly stating that the person you’re reaching out to is an expert whose time and energy you respect goes a long way to secure their goodwill.
Ask for their reasons and listen: As mentioned previously, don’t just ask experts what they think, ask them how they think. Use them as a resource to train yourself how to evaluate things so that you can start embodying an expert way of operating. You don’t have to agree with what they’re saying, but remember: your goal is to learn from them how to think better, not to have them solve your problem for you.
Follow up: If you want to build a network and make this more than a transactional request, follow up to report on your progress no matter what the outcome is. Whether their advice helped you in this case or not, following up and keeping them updated on your progress primes them to help you in the future. When they see that you took their advice seriously, they’re going to want to help you again.
It’s impossible to predict which fields you might someday need an expert in, but that’s one reason to cast a wide net socially and professionally. I just looked at my inbox last week and had fifty-three requests for“help” in one form or another. Two were from friends. I can’t reply to them all, so where do you think my time will go?
Imitators get frustrated when you say you don’t understand. That frustration is a result of being overly concerned with the appearance of expertise—which they might not be able to maintain if they have to really get into the weeds with an explanation. Real experts have earned their expertise and are excited about trying to share what they know. They aren’t frustrated by your lack of understanding; they instead love your genuine curiosity about something they care about.
One reason we fail to take action is that we’re scared to deal with the consequences. It’s not so much that we don’t know what to do as much as we don’t want to deal with the reality of doing it.
Another big reason we find action hard is that we’re afraid of being wrong. In this case inertia holds us in place as we gather more and more information in the false hope that we can ultimately eliminate uncertainty.
Among these decisions, two types deserve special attention: decisions that are highly consequential and irreversible, and decisions that are inconsequential and highly reversible.
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.
Remember to factor the cost of analysis into your decisions. This is something many people fail to do. Most decisions require an art that balances speed and accuracy.
If you’ve ever struggled with analysis paralysis, a third principle can help you know when to stop deliberating and start acting: 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.
Confidence increases faster than accuracy.“The trouble with too much information,” Robinson told me,“is you can’t reason with it.” It only feeds confirmation bias. We ignore additional information that doesn’t agree with our assessment, and gain confidence from additional information that does.
If you’re facing a highly consequential and irreversible decision, and you’re waiting as long as possible to make up your mind, the time to decide is when you start losing opportunities.
You don’t always need to have the ultimate solution to make progress. If it remains unclear which path is best, often the next best step is just to eliminate paths that lead to outcomes you don’t want. Avoiding the worst outcomes maintains optionality and keeps you moving forward.
A lot of tricky and highly consequential decisions, though, fail for preventable reasons. When we don’t consider how things might go wrong and plan for them in advance, we’re left flat-footed when they do go wrong. Then we end up reacting instead of reasoning. 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.
Your defaults are hard at work in the first scenario—not just the social default that convinces you that you’re better off following the crowd, but the ego default as well. It convinces you that you don’t need a margin of safety, because you know what’s going to happen. You feel confident predicting the future—predicting that the future is going to be like the past, that LTCM’s fourth year is going to be like its first three.
Warren Buffett has a saying that I often come back to:“Diversification is protection against ignorance. It makes little sense if you know what you are doing.” The thing is, most of us rarely know what we are doing with the confidence required to go all in. When you don’t know what you are doing, a margin of safety saves you from the worst outcomes. Even when you do know what you’re doing and you make the best possible decision at the time, things can change.
If the worst-case outcomes never come to pass, the margin of safety will appear like a waste. The minute you convince yourself you could have done better without a margin of safety is exactly when you need it most.
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. In other words, if he doesn’t have enough information to calculate a margin of safety, he doesn’t invest at all.
When you’re gathering information about your options, your best bet is to gather as much information as possible about each without investing too much time, money, or energy in any particular one. In Great by Choice, Morten Hansen and Jim Collins call this approach shooting bullets before cannonballs:
Preserving options carries a cost and can make you feel like you’re missing out. It’s hard watching others take action sometimes, even when those actions don’t make sense for you. Don’t be fooled! This is the social default at work. It tempts you to feel like it’s okay to fail so long as you’re part of the crowd.
Warren Buffett sat out most of the dot-com craze of the late ’90s, and appeared to miss the stampeding bull market that came with it. People began chattering that he’d lost his touch. He may have looked stupid to some speculators for a few years—until the tech bubble burst and he still had tremendous cash reserves.
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. Doing so allowed me to make the invisible visible. When I woke up in the morning, I’d read the note. More often than I’d like to admit, my best thinking from the day before fell short upon inspection in the harsh light of the morning. Sometimes I’d realize I really didn’t understand the problem as well as I thought I did.
Living with a decision before announcing it allows you to look at it from a new perspective and verify your assumptions. Once you’ve made the decision—even if you haven’t communicated it—you start seeing things in a new light.[*] Your brain processes all the potential results of the decision as though it had already been made and put into action. This can often help you see nuances you might have missed, and those might, in turn, change how you implement the decision.
fail-safe: Set up trip wires to determine in advance what you’ll do when you hit a specific quantifiable time, amount, or circumstance.
By having clear trip wires in place before you start, you increase the odds of success. When the entire team understands clearly the markers of success and failure, they are empowered to act the minute things veer off course.
fail-safe: Use commander’s intent to empower others to act and make decisions without you.
Before you begin executing a decision, just so there’s no confusion as you move forward, ask yourself: Who needs to know my goals and the outcomes I’m working toward? Do they know what the most important objective is? Do they know the positive and negative signs to look for and what trip wires are attached to them?
Another sign that you’re in the grips of the ego default is that you insist on controlling how everything happens. Good leaders determine what needs to get done and set the parameters for getting there. They don’t care whether something gets done differently from how they themselves would’ve done it. As long as it advances to the objective within the limits they’ve set, they’re satisfied.
fail-safe: Tie your hands to keep your execution on track.
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.
Great decision-makers have mastered the ability to learn both from their mistakes and from their successes. It’s that ability that sets them apart.
the process principle: When you evaluate a decision, focus on the process you used to make the decision and not the outcome.
Many people assume that good decisions get good outcomes and bad ones don’t. But that’s not true. The quality of a single decision isn’t determined by the quality of the outcome.
good decisions can have bad outcomes, and bad decisions can have good ones. Evaluating decisions—ours or others’—based on the outcome(or how we feel about the outcome) fails to distinguish luck from skill and control. Because of that, engaging in resulting doesn’t help us get better. The result of resulting is instead stagnation.
the transparency principle: Make your decision-making process as visible and open to scrutiny as possible.
Many of us have a hard time learning from our decisions. One reason is that our thinking and decision-making process is often invisible to us. We inadvertently conceal from ourselves the steps we took to reach our final decision. Once that decision gets made, we don’t stop to reflect, but just move forward. And when we look back at our decision later, our ego manipulates our memories.
If you want to learn from decisions, you need to make the invisible thought process as visible and open to scrutiny as possible. The following safeguard can help: 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.
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 the decision. It makes the invisible visible.

Part 5: Wanting What Matters

GOOD DECISION-MAKING COMES down to two things: 1. Knowing how to get what you want 2. Knowing what’s worth wanting The first point is about making effective decisions. The second is about making good ones. You might think they’re the same, but they are not.
All good decisions are effective, but not all effective decisions are good. Making the best judgments comes down to making decisions that get you what you really want—beyond just what you think you want at the moment.
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.
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.”
Happy-when people are never actually happy. The moment they get what they think they want—the“when” part of the conditional—having that thing becomes the new norm, and they automatically want more. It’s as if they’ve walked through a one-way door that closes behind them. Once the door closes, they lose perspective. They can’t see where they’ve been, only where they are.
What seemed like the most important thing in the world at the time—the very thing that consumed you—seems silly now in hindsight. Wisdom requires all the things we’ve talked about: the ability to keep the defaults in check, to create space for reason and reflection, to use the principles and safeguards that make for effective decisions. But being wise requires more. It’s more than knowing how to get what you want. It’s also knowing which things are worth wanting—which things really matter. It’s as much about saying no as saying yes. We can’t copy the life decisions of other people and expect better results. If we want to live the best life we can, we need a different approach. Knowing what to want is the most important thing. Deep down, you already know what to do, you just need to follow your own advice.
Time is the ultimate currency of life. The implications of managing the short time we have on earth are like those of managing any scarce resource: you have to use it wisely—in a way that prioritizes what’s most important.
What were the most important things according to the people Pillemer interviewed? They included the following: 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” to make you happy. Work in a job you love. Choose your mate carefully; don’t just rush in.
The list of things they said weren’t important was equally revealing: None said that to be happy you should work as hard as you can to get money. None said it was important to be as wealthy as the people around you. None said you should choose your career based on its earning potential. None said they regretted not getting even with someone who slighted them.
And the biggest regret people had? Worrying about things that never happened:“Worrying wastes your life,” one respondent said.
Pillemer asked one of his interviewees for help understanding the source of her happiness. She thought about it and answered,“In my 89 years, I’ve learned that happiness is a choice—not a condition.”
Marcus Aurelius did:“When you are distressed by an external thing, it’s not the thing itself that troubles you, but only your judgment of it. And you can wipe this out at a moment’s notice.”
If there were a way of viewing things from the perspective of our elders, we might have the insight to live better lives—to see in the way the experts do what really matters and what doesn’t. In fact, there’s an ancient technique for doing precisely this: start thinking about the shortness of life, and it will help you see what really matters.“Let us prepare our minds as if we had come to the very end of life,” Seneca said. If you want a better life, start thinking about death.
Steve Jobs put the idea this way: Remembering that I’ll be dead soon is the most important tool I’ve ever encountered to help me make the big choices in life. Because almost everything—all external expectations, all pride, all fear of embarrassment or failure—these things just fall away in the face of death, leaving only what is truly important. Remembering that you are going to die is the best way I know to avoid the trap of thinking that you have something to lose.
Jobs had a daily ritual. Every morning he would look in the mirror and ask himself,“If today were the last day of my life, would I want to do what I am about to do today?” Whenever the answer was no too many days in a row, he said, he knew he needed to change something.
Jeff Bezos uses a similar thought experiment: I wanted to project myself forward to age 80 and say,“Okay, now I’m looking back on my life. I want to have minimized the number of regrets I have.”. I knew that when I was 80 I was not going to regret having tried Amazon. I was not going to regret trying to participate in this thing called the Internet that I thought was going to be a really big deal. I knew that if I failed I wouldn’t regret that, but I knew the one thing I might regret is not ever having tried. I knew that that would haunt me every day, and so, when I thought about it that way it was an incredibly easy decision.
Possessions become less important for what they are than for what they enable. I’m guessing that, in the thought exercise, you didn’t think of your house as an investment. If it came to mind, it was probably in the context of the relationships and the memories—the family dinners, the laughs, the tears, the parties, the time you stayed in bed all day with your partner, the board game battles, the marks in the doorway that recorded how tall your kids were at each age. I’m guessing you didn’t think of the time you watched Breaking Bad, The Mandalorian, or The Bachelor. You probably didn’t think of all the time you spent commuting and the extra podcasts or audiobooks you got to listen to. Perhaps you thought instead about how at least some of that time could have been used connecting with family and friends, or writing that book you always wanted to write.
What we think of as defining moments, like promotions or a new house, matter less to life satisfaction than the accumulation of tiny moments that didn’t seem to matter at the time. In the end, everyday moments matter more than big prizes. Tiny delights over big bright lights.
If this were your final year of life, would you be living the same way you are today?
When you imagine your older self and what you want your life to look like in hindsight, you stop thinking about the small things that encourage you to be reactive instead of proactive. You start to see what actually matters to you. The small things look small, and the things that really matter start to look big. From this perspective, it’s easier to navigate toward the future you really want. You can see the gap between where you are and where you want to be, and change course if necessary.
Wisdom is turning your future hindsight into your current foresight. What seems to matter in the moment rarely matters in life, yet what matters in life always matters in the moment.
Sometimes the cost of being wise is that other people treat you like a fool. And no wonder: fools can’t see what wise people do. Wise people see life in all its breadth: work, health, family, friends, faith, and community. They don’t fixate on one part to the exclusion of others. They instead know how to harmonize life’s various parts, and pursue each in proportion to the whole. They know that achieving harmony in that way is what makes life meaningful, admirable, and beautiful.
If you want to develop good judgment, start by asking two questions:“What do I want in life? And is what I want actually worth wanting?” Until you’ve answered the second question, all the decision-making advice in the world isn’t going to do you much good.
Most books about thinking focus only on being more rational. They miss the fundamental problem: Most errors in judgment happen when we don’t know we’re supposed to be exercising judgment. They happen because our subconscious is driving our behaviors and cutting us out of the process of determining what we should do.
Improving your judgment, it turns out, is less about accumulating tools to enhance your rationality and more about implementing safeguards that make the desired path the path of least resistance. It’s about designing systems when you’re at your best that work for you when you’re at your worst. Those systems don’t eliminate the defaults, but they do help you recognize when they are running the show.