An incredibly useful book on how to make better decisions, set more precise goals, and solve problems more effectively. These are my notes just from part 2, "Life Principles".
There is nothing more important than understanding how reality works and how to deal with it.
a. Dreams + Reality + Determination = A Successful Life.
Most people fight seeing what’s true when it’s not what they want it to be.
a. Radical open-mindedness and radical transparency are invaluable for rapid learning and effective change.
b. Don’t let fears of what others think of you stand in your way.
c. Embracing radical truth and radical transparency will bring more meaningful work and more meaningful relationships.
When trying to understand anything—economies, markets, the weather, whatever—one can approach the subject with two perspectives:
While mankind is very intelligent in relation to other species, we have the intelligence of moss growing on a rock compared to nature as a whole. We are incapable of designing and building a mosquito, let alone all the species and most of the other things in the universe. Start from the premise that nature is smarter than I am and try to let nature teach me how reality works.
a. Don’t get hung up on your views of how things “should” be because you will miss out on learning how they really are.
b. To be “good” something must operate consistently with the laws of reality and contribute to the evolution of the whole; that is what is most rewarded.
c. Evolution is the single greatest force in the universe; it is the only thing that is permanent and it drives everything.
d. Evolve or die.
a. The individual’s incentives must be aligned with the group’s goals.
b. Reality is optimising for the whole—not for you.
c. Adaptation through rapid trial and error is invaluable.
d. Realise that you are simultaneously everything and nothing—and decide what you want to be.
e. What you will be will depend on the perspective you have.
I realised that most everything that at first seemed “bad” to me—like rainy days, weaknesses, and even death—was because I held preconceived notions of what I personally wanted. With time, I learned that my initial reaction was because I hadn’t put whatever I was reacting to in the context of the fact that reality is built to optimise for the whole rather than for me.
a. Maximise your evolution.
b. Remember “no pain, no gain.”
c. It is a fundamental law of nature that in order to gain strength one has to push one’s limits, which is painful.
If you can develop a reflexive reaction to psychic pain that causes you to reflect on it rather than avoid it, it will lead to your rapid learning/evolving.
a. Go to the pain rather than avoid it.
b. Embrace tough love.
People who overweigh the first-order consequences of their decisions and ignore the effects of second- and subsequent-order consequences rarely reach their goals.
Whatever circumstances life brings you, you will be more likely to succeed and find happiness if you take responsibility for making your decisions well instead of complaining about things being beyond your control.
Life doesn’t give a damn about what you like. It’s up to you to connect what you want with what you need to do to get it and then find the courage to carry it through.
Higher-level thinking — rise above your own and others’ circumstances and objectively look down on them.
a. Think of yourself as a machine operating within a machine and know that you have the ability to alter your machines to produce better outcomes.
b. By comparing your outcomes with your goals, you can determine how to modify your machine.
c. Distinguish between you as the designer of your machine and you as a worker with your machine.
d. The biggest mistake most people make is to not see themselves and others objectively, which leads them to bump into their own and others’ weaknesses again and again.
e. Successful people are those who can go above themselves to see things objectively and manage those things to shape change.
f. Asking others who are strong in areas where you are weak to help you is a great skill that you should develop no matter what, as it will help you develop guardrails that will prevent you from doing what you shouldn’t be doing.
g. Because it is difficult to see oneself objectively, you need to rely on the input of others and the whole body of evidence.
h. If you are open-minded enough and determined, you can get virtually anything you want.
Bad: Worry about appearing good. Good: Worry about achieving the goal.
Bad: Allow pain to stand in the way of progress. Good: Understand how to manage pain to produce progress.
These five steps make up a loop—iterative process
You will need to do all five steps well to be successful and you must do them one at a time and in order.
You will never handle everything perfectly: Mistakes are inevitable and it’s important to recognise and accept this fact of life.
a. Prioritise: While you can have virtually anything you want, you can’t have everything you want.
b. Don’t confuse goals with desires.
c. Decide what you really want in life by reconciling your goals and your desires.
d. Don’t mistake the trappings of success for success itself.
e. Never rule out a goal because you think it’s unattainable.
f. Remember that great expectations create great capabilities. If you limit your goals to what you know you can achieve, you are setting the bar way too low.
g. Almost nothing can stop you from succeeding if you have a) flexibility and b) self-accountability.
h. Knowing how to deal well with your setbacks is as important as knowing how to move forward.
a. View painful problems as potential improvements that are screaming at you. Each and every problem you encounter is an opportunity.
b. Don’t avoid confronting problems because they are rooted in harsh realities that are unpleasant to look at.
d. Don’t mistake a cause of a problem with the real problem.
e. Distinguish big problems from small ones.
a. Focus on the “what is” before deciding “what to do about it.”
b. Distinguish proximate causes from root causes.
c. Recognise that knowing what someone (including you) is like will tell you what you can expect from them.
a. Go back before you go forward.
b. Think about your problem as a set of outcomes produced by a machine.
c. Remember that there are typically many paths to achieving your goals. You only need to find one that works.
d. Think of your plan as being like a movie script in that you visualise who will do what through time.
f. Recognise that it doesn’t take a lot of time to design a good plan.
a. Great planners who don’t execute their plans go nowhere.
b. Good work habits are vastly underrated. People who push through successfully have to-do lists that are reasonably prioritised, and they make certain each item is ticked off in order.
c. Establish clear metrics to make certain that you are following your plan.
If the process is working, your goals will change more slowly than your designs, which will change more slowly than your tasks.
One last important point: You will need to synthesise and shape well.
Each step requires different thinking: (virtually nobody has them all)
a. Look at the patterns of your mistakes and identify at which step in the 5-Step Process you typically fail.
b. Everyone has at least one big thing that stands in the way of their success; find yours and deal with it.
Humility can be even more valuable than having good mental maps if it leads you to seek out better answers than you could come up with on your own. Having both open-mindedness and good mental maps is most powerful of all.
You can improve by either going up on the mental-maps axis (by learning how to do things better) or out on the open-mindedness axis.
The two biggest barriers to good decision making are your ego and your blind spots.
a. Understand your ego barrier.
b. Your two “yous” fight to control you.
c. Understand your blind spot barrier.
Radical open-mindedness is motivated by the genuine worry that you might not be seeing your choices optimally.
It requires you to replace your attachment to always being right with the joy of learning what’s true.
To be radically open-minded you must:
a. Sincerely believe that you might not know the best possible path and recognise that your ability to deal well with “not knowing” is more important than whatever it is you do know.
b. Recognise that decision making is a two-step process: First take in all the relevant information, then decide.
c. Don’t worry about looking good; worry about achieving your goal.
d. Realise that you can’t put out (convey their thinking and be productive) without taking in (learn).
e. Recognise that to gain the perspective that comes from seeing things through another’s eyes, you must suspend judgment for a time—only by empathising can you properly evaluate another point of view.
f. Remember that you’re looking for the best answer, not simply the best answer that you can come up with yourself.
g. Be clear on whether you are arguing or seeking to understand, and think about which is most appropriate based on your and others’ believability.
Use questions rather than make statements
Be open-minded and assertive at the same time—you should hold and explore conflicting possibilities in your mind while moving fluidly toward whatever is likely to be true based on what you learn.
Being able to thoughtfully disagree would so easily lead to radically improved decision making in all areas
a. Plan for the worst-case scenario to make it as good as possible.
Close minded people:
Open minded people:
a. Regularly use pain as your guide toward quality reflection.
b. Make being open-minded a habit.
c. Get to know your blind spots.
d. If a number of different believable people say you are doing something wrong and you are the only one who doesn’t see it that way, assume that you are probably biased.
f. Be evidence-based and encourage others to be the same.
g. Do everything in your power to help others also be open-minded.
h. Use evidence-based decision-making tools.
i. Know when it’s best to stop fighting and have faith in your decision-making process.
Do you deeply believe that finding out what is true is essential to your well-being?
Because of the different ways that our brains are wired, we all experience reality in different ways and any single way is essentially distorted.
Everyone is like a Lego set of attributes, with each piece reflecting the workings of a different part of their brain. All these pieces come together to determine what each person is like, and if you know what a person is like, you’ll have a pretty good idea of what you can expect from them.
a. We are born with attributes that can both help us and hurt us, depending on their application.
Man is perpetually suspended between the two extreme forces that created us:
Which of these forces (self-interest or collective interest) wins out in any organisation is a function of that organisation’s culture, which is a function of the people who shape it.
a. Realise that the conscious mind is in a battle with the subconscious mind.
b. Know that the most constant struggle is between feeling and thinking.
c. Reconcile your feelings and your thinking.
d. Choose your habits well.
e. Train your “lower-level you” with kindness and persistence to build the right habits.
f. Understand the differences between right-brained and left-brained thinking.
g. Understand how much the brain can and cannot change.
The four main assessments we use are the Myers-Briggs Type Indicator (MBTI), the Workplace Personality Inventory, the Team Dimensions Profile, and Stratified Systems Theory.
a. Introversion vs. extroversion. — I’ve found that it is important to help each communicate in the way that they feel most comfortable.
b. Intuiting vs. sensing. — Intuitive thinker’s attention is focused on the context first and the details second.
h. Shapers are people who can go from visualisation to actualisation.
a. Manage yourself and orchestrate others to get what you want.
Think about the challenge of making all of your decisions well, in a systematic, repeatable way, and then being able to describe the processes so clearly and precisely that anyone else can make the same quality decisions under the same circumstances.
Learning must come before deciding.
what’s most important is that what you know paints a true and rich picture of the realities that will affect your decision.
Failing to consider second and third-order consequences is the cause of a lot of painfully bad decisions, and it is especially deadly when the first inferior option confirms your own biases.
For me, getting an accurate picture of reality ultimately comes down to two things: being able to synthesise accurately and knowing how to navigate levels.
The key is having the higher-level perspective to make fast and accurate judgments on what the real risks are without getting bogged down in details.
a. One of the most important decisions you can make is who you ask questions of.
b. Don’t believe everything you hear. Opinions are a dime a dozen and nearly everyone will share theirs with you.
c. Everything looks bigger up close.
d. New is overvalued relative to great.
e. Don’t oversqueeze dots.
a. Keep in mind both the rates of change and the levels of things, and the relationships between them.
b. Be imprecise. Understand the concept of “by-and-large” and use approximations.
c. Remember the 80/20 Rule and know what the key 20 percent is.
d. Be an imperfectionist.
a. Use the terms “above the line” and “below the line” to establish which level a conversation is on.
b. Remember that decisions need to be made at the appropriate level, but they should also be consistent across levels.
“Until you make the unconscious conscious, it will direct your life and you will call it fate.” — Carl Jung
Once you understand expected value, you also understand that it’s not always best to bet on what’s most probable.
a. Raising the probability of being right is valuable no matter what your probability of being right already is.
b. Knowing when not to bet is as important as knowing what bets are probably worth making.
c. The best choices are the ones that have more pros than cons, not those that don’t have any cons at all.
a. All of your “must-dos” must be above the bar before you do your “like-to-dos.” Separate your “must-dos” from your “like-to-dos” and don’t mistakenly slip any “like-to-dos” onto the first list.
b. Chances are you won’t have time to deal with the unimportant things, which is better than not having time to deal with the important things.
Get rid of irrelevant details so that the essential things and the relationships between them stand out.
all “cases at hand” are just “another one of those,” identifying which “one of those” it is, and then applying well-thought-out principles for dealing with it
Avoid the common perils of: 1) valuing your own believability more than is logical and 2) not distinguishing between who is more or less credible.
You can express the relationship between these criteria in a simple decision-making formula: if-then, if-then-else statements.
I categorise what is going on in the world of computer-aided decision making under three broad types:
In order to have the best life possible, you have to: 1) know what the best decisions are and 2) have the courage to make them.
Image credits: Principles by Ray Dalio
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