7 Mental Models for Decision-Making to Ditch Uncertainty

When you’re about to make a decision, do you follow a certain framework or do you rely on your gut feeling?

Usually, we are too late. We confidently decide to do something in a particular way. But after the outcome arrives. We realize how stupid we were.

“Why didn’t I think about it anymore?” is something I often tell myself when I make a move.

Instead of carefully considering the options. Experimenting. I frequently do things that I eventually regret.

Other times, when my actions lead to beneficial outcomes. I pat myself on the back. Let my ego balloon, and I start to think that I’m extraordinarily smart.

The above, however, is equally stupid as the former.

Recently though, I decided to do something different.

Instead of blindly choosing path A or path B when life offers me a chance to choose. I decided to find the best decision-making tools. To upgrade my decision process in advance – before the next time for deciding something arrives.

Eventually, this led to an in-depth study of the now-famous concept of mental models.

Below, what I’m about to present, can save you from ending up working a job you hate, starting a business that will eventually lead to bankruptcy. And, more generally, becoming better at the fine art of decision-making so you can be more certain about the eventual outcomes.

7 Mental Models for Decision-Making:

1. First Principles

First-principles thinking is a fundamental mental model for making complicated things uncomplicated.

The idea here is that you dissect an idea, object, some sort of problem, with the underlying goal to understand what are the basic building elements of this thing.

Elon Musk is often cited for his way of using the first principles way of thinking.

Here’s the short story:

He wanted to create a company that goes to space. Sadly, rockets were very expensive. But that didn’t discourage him. He simply took a different approach. By breaking down the main components of a rocket, categorizing the basic elements required to create a spaceship, he figured out that the cost of these ingredients is really cheap. From there, he simply learned how to build rockets using the core components in a less expensive way.

Similarly, if you want to start a business, learn a new language, or lose weight and gain muscle. By using the first-principles way of thinking, you can do all of these things faster and better.

You will approach the desired subject by first understanding the foundations – what is essential for building a thriving company, for example. From there, you will spend more time on the important things while neglecting the unimportant ones to eventually create a business faster and better.

When you identify the building blocks. You understand what is truly important and what you can neglect to construct a better product/system.

In short, first principles thinkers don’t say, “We’ll do that because it’s always been done that way.” They spend time figuring out the basic components responsible for something to happen and find a better way to assemble the pieces together. First-principles thinkers ask: “What do I absolutely need to create X? What is 100% true?”

Plainly, you are using the same core pieces. But you are arranging them in a different way – you are innovating.

2. Backward Chaining

Backward chaining is kind of the opposite of the above – first-principles thinking.

Simply put, backward chaining forces you to define your end goal – what you want to achieve or solve. Then, work backward to find what type of tasks, materials, how many people, actions must be done for that goal to be accomplished.

Usually, in our daily lives, we almost do this automatically. After all, we approach life by first figuring out what we want to achieve, where we want to go, and then we burst into action.

Saying, “I want to become a psychiatrist”, for example. Is the starting point. When you define your profession first. You then take time to consider what you need to do to close the gap between where you are now and where you want to be in the future.

But backward chaining is a valuable tool that offers something extra. It can also help us think more about the end goal.

When someone mentions something, you don’t have to automatically believe it. You can use the principle to figure out if there is data that supports the statement.

Backward-Chaining-mental-model
Instead of rushing to get closer to your goal. Backward chaining prompts you also to ask questions. Figure out why you want that specific goal – identify what precisely you want to achieve. This helps you ensure that you are pursuing the right thing.

If your grandma tells you that you should become a mathematician because you love math. You can pause and reflect. Ask yourself questions like: “Do I really love solving equations? How much do I love it? Do I love it enough to make it my career? What do I need to do daily in order to become the best mathematician?”

This type of thinking is not only perfect for figuring out the best way to achieve a goal and strengthen your understanding of something. But also to understand if the goal is worth pursuing in the first place.

3. Second-Order Thinking

Second-order thinking is basically continuously asking yourself the following question: “And then what?”

You think in advance about the consequence.

A simple example is the following:

You’re hungry, and the following dinner options are available: A) Salad; B) Big juicy burger.

Most people will immediately get the burger. Almost automatically grab it and eat it without much hesitation.

If we apply second-order thinking, however, we can convince ourselves that we should get the salad. You probably ate a burger a few hours ago. Or, you are trying to lose weight and this type of food surely won’t contribute to your goal. If you say yes to the burger, you will feel full and you won’t have a good sleep. If you can’t sleep well, you will wake up tired and you won’t exercise as you planned to do the following morning.

This is what happens when you don’t apply second-order thinking:

Second-Order Thinking that leads to bad results
What initially feels good almost always feels worse after a certain period of time.

And this is what happens when you do apply second-order thinking:

Second-Order-Thinking-that-leads-to-good-results
What initially feels like hard work almost always leads to amazing opportunities after a certain period of time.

Growing up requires constantly using the second-order thinking method. After all, we now have kids, mortgages, jobs, businesses, friends we want to keep. Life eventually becomes the equivalent of playing chess on multiple boards.

Often, though, we forget. We forget to pause and consider the consequences before making a move – which can even lead to one decision ruining our lives.

That’s why we always don’t have the time to finish our projects on time. We fall into destructive internet rabbit holes. Or we get sucked by the social media vortex, which makes us react to what we see instead of proactively pursuing what we really want.

When facing a decision, don’t automatically go with the flow. Put your feelings aside for a moment. Then, think about this: “What do the consequences look like in 10 minutes? 10 months? 10 Years?”

4. The Hard Choice Model

The hard choice model is a great way to figure out the impact of a decision.

This is something I found in the following article. The author himself took it from a talk presented by Wes O’Haire – a product designer from Dropbox.

In essence, when you need to make a decision, you look at it across two different spectrums:

  • How easy it is to compare the options.
  • How impactful is the decision.

When put on a graph, it becomes the following matrix with these 4 quadrants:

The-Hard-Choice-Mental-Model
  • No-brainer: These are easy decisions that are not that impactful. If you have a business where you’re selling tea and if you’re wondering whether you should add a new flavor, you can easily decide this.
  • Apples/Oranges choice: Here you are deciding between two different ideas. If we use the same example and you own an online store where you sell tea. Say that you do want to add a new flavor. But there are a couple of different brands on the market. In this situation, you need to figure out what you really want. Probably think about which brand from the available will be better for your current customers.
  • Big choice: These have a high impact but are easy to compare. In these situations, you simply need to gain the courage to execute – or don’t. For instance, if you want to start selling coffee on your website. It’s a big choice because it will require a substantial change on the site but when you think about it, people who drink tea often drink coffee, too.
  • Hard choice: These are the hardest. They have a high impact and usually, the options are hard to compare. For example, if someone wants to acquire your website where you sell tea. You need to weigh the pros and the cons. “What will happen if I sell? What will I do afterward? Can I create another thriving business? Will it be better if I don’t sell?” These are some of the questions you will have to ask yourself before you make a choice.

The hard choice model is a great way for the beginning phase of your decision-making process. When you know what type of decision you are dealing with, you can then apply some of the other decision processes discussed in this article.

5. Inversion Principle

Normally, when we have a problem. We think mainly about the possible solutions.

What can I do to solve the problem?

But this only gives us part of the puzzle. We don’t see the complete picture.

If you want to lose weight and gain muscle – if we consider this the problem. Obviously, you will say that you will eat healthily and exercise. These are the essential things you need. There is no other way.

However, how many people stop exercising only after a couple of visits to the gym?

A lot.

So what inversion does is help you define the worst that can happen.

You brainstorm everything that could happen that will prevent you from exercising and eating quality food.

Inversion-Principle-mental-model
Inversion forces you to think about what can go wrong when you set a goal or when you have an idea about a project. When you identify the worse that can happen, you are prepared.

For instance, something I personally struggle with is when I’m attending birthdays. I know, strange. But hear me out.

I’m not talking about that I don’t want to go. I’m talking about the available meals at birthday parties. Sometimes, you don’t have full control over the food served there. What if the person can only offer you burgers with a cake at the end of the night?

Or what if you’re committed to exercising daily but you have a very busy day at work and you simply can’t make it to the gym?

These are all adequate threats that can prevent you from executing your plan to keep your body in good shape.

Inversion helps you think about what bad things can happen and figure out a way, beforehand, how to respond.

So, how do I tackle birthday parties?

Well, I have a light snack before going to the party to ensure that even if there are only cholesterol-heavy meals, I won’t be that hungry to get full. And, I exercise first thing in the morning to ensure that I won’t miss a workout even if my day turns out to be a chain of unexpected events.

6. Scientific Method

The scientific method is a method of looking at things with a high degree of skepticism – widely used by critical thinkers.

The point is not to be judgmental or to accuse others. Rather, to deeply explore the world and find the best answer to a specific question.

The scientific method is used mostly – as the name suggests – by scientists and knowledge workers to find the truth and share it with the rest of the world. It’s a framework based on logic and a lot of experimenting.

Yet, it can also be used by regular people (us) when we are trying to solve the never-ending stream of problems life tends to throw at us.

In short, the process looks like this:

Scientific-Method-mental-model
  • Asking a question or careful observation: The first step is to ask a question. This is usually based on your observations of the world. One important thing here is that the question should be testable. In other words, you should be able to conduct an experiment. Don’t ask, “Can I start a business?” Choose something specific. For instance, “What type of business I can start based on my personality?”
  • Research and background information: Here, we need to find as much as possible data about the topic we are tackling. The best way is usually by learning from the experience of other people. Naturally, this means figuring out the best practices and defining what works and doesn’t work. To continue with the above example, we will study small business owners and find out how they started.
  • Constructing a hypothesis: A hypothesis is defined as an educated guess. Based on the gathered data so far, you predict what might happen if you start a business. The idea is to generate a hypothesis that is testable and measurable. For instance, you say something like: “If I open a small shop where I sell plants and I target office workers, I can earn enough to support myself. There are currently not that many shops that offer plants to people working in offices.”
  • Test with an experiment: Obviously, here you test your idea. Based on the question, the experiment will be different, of course. But in the example I’m describing, you can create a simple website where people can subscribe to a newsletter if they are interested in purchasing a plant for their office. After that, you advertise your site in relevant places. You don’t need to have something to sell. The idea here is to see if people are interested in the idea. There is one more important addition to this step. During the experiment, you ask: “Is the experiment working?” If not, you can change certain things – images, the text, the design. Since it’s an experiment, you want to test a couple of options.
  • Analyzing data and drawing conclusions: After we’re done with the experiment. It’s time to review the results. Consider different angles. Calculate the average subscribers. How many people clicked on the ad. How many people replied to your welcome email. Did people share your page? Keep in mind that the mare collection of data shouldn’t mean that you should abandon the project. The data can open your eyes to new opportunities and help you create another experiment. Thus, restart the process from the top.
  • Communicating the result: The last step is communication. You create a report or a presentation to share your findings with the world. Even if the experiment was for a personal project, it’s still valuable to describe your findings in a short conclusion. This will help you in the future.

7. Decision Matrix

What better mental model for decision-making than the decision matrix, right?

The decision matrix is a mental tool that will help you choose the best option by weighing the most important factors.

Plainly, you create a list of values, add them to rows and columns and give a rating to each one of the components. The end result will uncover the best decision.

Here’s an example:

Say you want to purchase a new car. You have a set budget but you also want it to be a vehicle that’s aligned with your style (I know!).

So, cost and looks will be your main factors.

You create a table that looks kind of like this:

Decision-Matrix-pic-1

The first step is to assign weights to the main factors. In our case, how the car looks will be the main thing we are looking for – that’s why the weight is 5.

Secondly, we will score each option on a scale of 1 to 5 (where 1 is the worst, 5 is the best).

For example, if Car 2 is more expensive than Car 1, we’ll respectfully add a lower number for Car 2. Using the same logic, we’ll add scores to the other components.

Decision-Matrix-pic-2

Finally, we are multiplying the scores based on the pre-set weights for each factor.

Decision-Matrix-pic-3

Basically, you add a score for every measure and you multiply this depending on the most important factors for you. The final score will help you with the decision.

In our case, we need to buy Car 1 – the cheaper car.

Some Closing Thoughts

Outcomes shouldn’t feel like rolling a die.

Quite often, we regret our decision but we hardly think about improving our decision-making process.

Yes, you don’t have full control over what will happen. But you can make sure that you’ve done the needed preparation to ensure that your decision was based on valid arguments, real-world data, and a process of experimentation.

Think about this:

An archer can’t control the arrow while in the air. But he has full control over the process before the arrow is released.

Of course, you don’t have to use all the frameworks mentioned above. Depending on the case, you can pick one or two.

A great way to think about mental models is to imagine them as tools inside a toolbox. You pick the right instrument based on the case.

How to gather the best tools? Read more mental models books.

Also, for even more on mental models, consider the following:

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