One of the most important skills that you should have in order to be successful is the skill of persuasion. This is especially important when trying to influence the people who hold the power and make the decisions, either your boss, the CEO of a company you are trying to pitch your business to, or even someone in your social circle you are trying to convince to do something.
I ran across an interesting article in Harvard Business Review about the different decision-making styles of leaders and how you should tailor your message towards each one.
The argument was that people focus too much on the message itself and not on how it is delivered. This is the wrong approach and probably the reason why you fail in persuading the people you want to persuade. The most important thing is how you craft the message.
“All too often, people make the mistake of focusing too much on the content of their argument and not enough on how they deliver that message. Indeed, far too many decisions go the wrong way because information is presented ineffectively.“
According to the research carried out by the authors of the article, different leaders have different decision-making styles. These should not be confused with their personalities (although a certain personality type might influence the way that person makes decisions):
“Our research should not be confused with standard personality tests and indicators like Myers-Briggs. Our framework is simply a categorization of how people tend to make decisions. Of course, people do not always make decisions in the same way; much depends on the situation they’re in. But our research has shown that when it comes to making tough, high-stakes choices that involve many complex considerations and serious consequences, people tend to resort to a single, dominant style. Call it a default mode of decision making.“
The different decision-makers can be broken down into 5 distinct categories:
1) charismatics – Richard Branson
2) thinkers – Bill Gates
3) skeptics – Larry Ellison
4) followers – Peter Coors
5) controllers – Ross Perot
“Charismatics can be initially exuberant about a new idea or proposal but will yield a final decision based on a balanced set of information. Thinkers can exhibit contradictory points of view within a single meeting and need to cautiously work through all the options before coming to a decision. Skeptics remain highly suspicious of data that don’t fit with their worldview and make decisions based on their gut feelings. Followers make decisions based on how other trusted executives, or they themselves, have made similar decisions in the past. And controllers focus on the pure facts and analytics of a decision because of their own fears and uncertainties.“
Each of these different types of decision-makers needs a message structured in a way that suits their style and that they can digest in their own way. Read More
If you have studied economics, then you probably came across the core assumption that people are rational actors who make decisions that are in their best interest and after a careful analysis. This assumption always bothered me, since in my experience that’s not how people behaved in real life.
Turns out, I wasn’t the only one who had these doubts. Later I came across an economics theory called behavioral economics. Unlike classical economics which works with the rational actor model, behavioral economics assumes that people are not rational actors and instead fall under the sway of what they call cognitive biases.
One of the fathers of behavioral economics is a psychologist by the name of Daniel Kahneman, who even won a Nobel Prize in Economics for his work. Together with Amos Tversky, they started studying how people reason and why they often tend to make mistakes in their thinking.
They came to the conclusion that there are two basic ways that your brain goes about making thoughts and coming to decisions: System 1 and System 2.
System 1 is quick, heavily dependent on emotions and the subconscious, while System 2 is slow, logical and conscious. System 1 is the one that humans use most of the time and is basically akin to instinct. It evolved millions of years ago in order for your ancestors to be able to make quick decisions in life and death situations.
Luckily, in today’s world, you very rarely face these life and death situations, however you still tend to rely on System 1 thinking even in cases where a more rational approach would make more sense. A lot of times, you don’t even know it.
This often results in you making sub-optimal decisions, which can be a huge problem in many areas of life, including business. One article in McKinsey Quarterly cites the results of a study which confirm this:
“Our candid conversations with senior executives behind closed doors reveal a similar unease with the quality of decision making and confirm the significant body of research indicating that cognitive biases affect the most important strategic decisions made by the smartest managers in the best companies. Mergers routinely fail to deliver the expected synergies. Strategic plans often ignore competitive responses. And large investment projects are over budget and over time—over and over again.“
How should you minimize these types of failures? If you want to make a better decision, it often makes sense to take a step back and engage System 2.
How do you do this? Together with Dan Lovallo (one of the co-authors of the above cited McKinsey article), Daniel Kahneman came up with a 12-point checklist that you can use before you make any significant business decision. Read More
The first principles approach for problem solving that Elon Musk uses is an awesome way to find unconventional solutions to all kinds of problems. However this type of thinking does not come naturally to most people.
How can you take this knowledge and these techniques and apply them in practice? How can you make first principles thinking a part of your life?
In Part 2, we learned how to think in first principles. In this part, we will learn how to use that thinking in order to solve real-life problems. Here we go from theory to application.
Concrete examples from history
“Eureka! Eureka!” These legendary words were shouted by Archimedes, the Ancient Greek inventor, as he ran naked through the streets of Syracuse. This word can be roughly translated as “I have found it!” and since that time has become a synonym of discovery.
Archimedes was a really clever guy and discovered a lot of cool and practical stuff, but his legend was solidified by this one famous incident. The story that precedes this is the perfect example of using first principles thinking to come up with solutions to problems (and it even includes discovering some first principles themselves!).
King Hiero II of Syracuse wanted a golden crown to be made and assigned the work to a local goldsmith. When the goldsmith came back with the finished product, King Hiero suspected that the crown was not all gold and instead that the goldsmith had sneaked in some silver. However how to prove this little hunch?
Luckily, the King had Archimedes loitering around his city and so assigned the problem to him. Archimedes had to determine whether the crown was pure gold or it also included silver, without damaging it. This was almost an impossible problem and no one else in the kingdom had been able to come up with a solution.
This problem was initially also hard for Archimedes himself. He kept pondering it in his mind, but just couldn’t get around to figuring out a method to solve this little conundrum.
That’s where the story gets interesting. Archimedes was a cleanly fellow and one day was getting ready for his bath. He filled up the bath almost to the top with water, stripped down and then got in. As soon as he got into the bath, the water overflowed and spilled over the edge.
Archimedes noticed that as he got into the bath, the level of the water rose. This is what sparked the lighting bolt of discovery. He had discovered a first principle!
He summarized this principle in one of his works “On Floating Bodies”:
“Any object, wholly or partially immersed in a fluid, is buoyed up by a force equal to the weight of the fluid displaced by the object.“
This is the first principle that Archimedes needed in order to solve the problem. If he submerged the crown in water, the crown would displace an amount of water equal to its volume. Archimedes could then use this fact to test whether the crown contained silver. If it did, then the crown would be less dense.
There is some discussion on the exact method that he used, but no matter the exact steps, it is a great example of coming up with first principles and then using them to solve a problem.
And yes, the goldsmith was a sneaky, dishonest dude and Archimedes proved it. Read More
Your brain encourages you to think in analogies, as this is the most efficient and safest way of thinking. So how do you break this programming, take a step back and start thinking in first principles?
For some people it comes more naturally than to others. In an article on Elon Musk on his blog, Tim Urban, makes an interesting analogy (sometimes thinking in analogies helps 🙂 ).
He compares people and how they behave to cooks and chefs. With a chef, he means a person who invents their own recipe, while a cook is someone who follows an already existing recipe.
Some people usually behave like cooks and follow recipes from a cookbook, while others prefer to come up with their own. However almost no one is a 100% cook or chef. That’s why Urban introduces a culinary spectrum, with some people being more on the cook side, while others more on the chef side.
A cook takes some ingredients and goes through a series of steps to come up with a standard dish. On the other hand, a chef might use those same ingredients, but mix them up in new and original ways and come up with a new dish. For both of these guys, the ingredients were the first principles, but the way they used them was different.
When I was reading the cooks vs. chefs part, it struck me how this analogy is similar to the NLP meta-program on options vs. procedures. If you remember a while back I wrote an article on why people talk and behave differently. One of the main reasons for this is that they have different meta-programs acting in their heads.
People who have a preference for the procedures meta-program, prefer to follow a standard way of doing things, while those more on the options side prefer to pick and choose from different choices and follow their own path. People on the procedures side are the cooks, and the ones on the options side the chefs.
As with any NLP meta-program, no one is 100% on either side and instead is most likely situated somewhere on a continuum. Whether you follow a standard procedure or take a bunch of options and come up with your own way of doing things can often depend on the situation.
Even if you are a procedures type of person, that doesn’t mean that you can’t change and start thinking more on the options side. How do you move away from being a cook and become a chef?
The Architect: “Elon, you have come to seek me?“
Elon: “Yes, I want to create a new function and then upload it into people.“
The Architect: “You want to update the operating systems?“
Elon: “Yes, essentially yes.“
Elon: “However, the original program is still useful in most cases. That’s why I just want to create a function that people could call up whenever they need it.”
The Architect: “That is possible. However some fundamental recoding will have to be done.“
Elon: “Cool. Now I go back to return to the Source.”
Have you ever wanted to know how Elon Musk thinks? The guy came up with some pretty cool ideas and has become a billionaire. What’s his secret? How can you replicate it? Well, I have the answer for you. However I am warning you, it’s going to be pretty heavy reading and you will need to really focus and maybe re-read it several times in order to get it. The first part will focus on giving an introduction to Musk’s way of looking at problems, as well as some common barriers that often prevent people from thinking that way. The second part will give you some techniques that will help you solve problems the way Musk does, while the third part will conclude by looking at some practical examples of first-principles thinking. Another series of articles will look at paradigm shifts and how scientific revolutions happen.
Supposedly we are living in the Matrix, a world that is hidden inside a computer simulation similar to the one depicted in the famous movie. This is a statement that was uttered recently by none other than Elon Musk, the man behind Tesla and Space-X.
This is what he had to say at a coding conference hosted by Recode:
“If you assume any rate of improvement at all, then the games will become indistinguishable from reality, even if that rate of advancement drops by a thousand from what it is now. Then you just say, okay, let’s imagine it’s 10,000 years in the future, which is nothing on the evolutionary scale. So given that we’re clearly on a trajectory to have games that are indistinguishable from reality, and those games could be played on any set-top box or on a PC or whatever, and there would probably be billions of such computers or set-top boxes, it would seem to follow that the odds that we’re in base reality is one in billions.”
How did he come up with this? Whether the Matrix statement is crackpot or not doesn’t really matter at this point. Musk has a track record of some incredible successes (and some spectacular failures) and so when he says something, the world listens.
Neo from the Matrix: “Whoa, Elon! So you know we all stuck in the Matrix, too?”
Elon: “Yeah, Neo. I have been sensing it for a while. It just makes logical sense.“
Neo: “How come you still plugged in? Don’t you wanna break out?“
Elon: “Not really. I am pretty happy being plugged in. I have plans to go to Mars, create a hyperloop… Don’t really feel like partying with you in Zion.“
Neo: “But we have to destroy the program!“
Elon: “Nah, no need for that. We can just create a neural lace. This way we gain control, but the AI still serves us.“
Neo: “You think we could do that?“
Neo: “But you would give up on flying cool ships like the Nebuchadnezzar and battling those mechanical sperm-like looking thingies!“
Elon: “Don’t worry. I am building my own rockets.“
Neo: “How did you figure all this out anyways? When I was plugged in, I kept on detecting irregularities, but it was Morpheus who finally snapped me out of it.“
Elon: “First principles, Neo. First principles.“
Elon Musk has a very unique way of thinking that has helped him solve some really tough problems. At the basis of this is what he calls first-principles thinking.
This is an approach he borrowed from physics, where you start from a set of basic assumptions that you hold to be true and that cannot be broken down further and then reason up from there.
Let’s analyze a bit what Elon Musk means by first principles thinking:
“I also think it is important to reason from first principles, rather than, by analogy. So the normal way we conduct our lives is we reason by analogy. We’re doing this because it’s like something else that was done or like what other people are doing, iterations on a theme. It’s kinda mentally easier to reason by analogy rather than from first principles. First principles is kinda a physics way of looking at the world and what that really means is you kinda boil things down to the most fundamental truths and say okay, what are we sure is true? Or sure as possible is true? And then reason up from there. That takes a lot more mental energy.”
Musk states that there are two basic ways that people reason: through analogy or through first-principles. Using analogies is probably the most common way of thinking for the majority of people. It is much easier for a person to take something that they already know and apply it as an analogy on how things should work. This thing is tried and tested and so they think that that’s how things should be done.
However Musk believes that this is not the best way to think about problems. In his opinion, this type of thinking can often prevent people from coming up with the most optimal solution.
For him, if you want to come up with a truly innovative solution, you need to go back to the basics. In physics, the basic propositions of the field are called first principles.
A first principle is a basic foundational assumption that cannot be broken down further and that forms the basis of the thinking in its own particular field. All the other works in that field are based on this basic assumption being true and built up from there.
If you want to make progress you need to go back down to these first principles and look at what is really true based on them and what is in fact just a stubborn orthodoxy dependent on not being able to see beyond the way things are now.
“Somebody could say… in fact, people do… that battery packs are really expensive and that’s just the way they’ll always be, because that’s the way they’ve been in the past. Well, no, that’s pretty dumb, because if you applied that reasoning to anything new, then you would never be able to get to that new thing. You can’t say, oh, horses – nobody wants a car because horses are great and we’re used to them and they can eat grass and there’s lot of grass all over the place and you know, there’s no gasoline that people can buy, so people are never going to get cars. People did say that, you know.”
Most people are incremental thinkers and think within established paradigms. They take the reality of the world as given and can’t really fathom that other different ways of doing things are possible.
Musk gives the example of horse-drawn carriages. For hundreds or thousands of years, that was the way people would transport themselves from one place to another. During those times, if you would ask a person to think of transportation, that would be what they would think of.
Ask a person now what transportation is for them and they will say cars, trains, airplanes… That is the transportation paradigm for people in this age. I am sure that will change soon. 🙂
You see that transportation changed and horse-drawn carriages have almost completely disappeared. This is because someone went back to first principles and completely changed the fundamentals of transportation.
“And for batteries, they would say, oh, it’s going to cost – you know, historically it’s cost $600 per kWh and so, it’s not going to be much better than that in the future, and you say no, what are the batteries made of? So first principles mean you say okay, what are the material constituents of the batteries? What is the spot market value of the material constituents? So you can say, it’s got: cobalt, nickel, aluminum, carbon and some polymers for separation and a steel can. So break that down on a materials basis and say okay, if we bought that on the London metal exchange, what would each of those things cost? Like, oh, jeez, it’s like $80 per kWh. So clearly, you just have to think of clever ways to take those materials and combine them into the shape of a battery cell. And you can have batteries that are much cheaper than anyone realizes.”
Musk gives an example on how you can challenge the common view on a certain subject by going back to first principles. He uses batteries to demonstrate this.
Most people assume that batteries are expensive and not much can be done to change that. That’s just the way things are. However Musk shows how he went down to the basic constituent parts of the batteries, the raw materials that make them up, and turned that impression upside down. Read More
“It is not the critic who counts; not the man who points out how the strong man stumbles, or where the doer of deeds could have done them better.
The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood; who strives valiantly; who errs, and comes short again and again, because there is no effort without error and shortcoming;
but who does actually strive to do the deeds; who knows the great enthusiasms, the great devotions; who spends himself in a worthy cause; who at the best knows in the end the triumph of high achievement,
and who at the worst, if he fails, at least fails while daring greatly, so that his place shall never be with those cold and timid souls who know neither victory nor defeat.“
In 1910, Theodore Roosevelt travelled to Paris and while there, delivered a very powerful and inspirational speech on what is really important in the world.
In the speech, he praised the virtue of hard work and of trying. For him, it is not the end result that is the most important, but the process that goes into it.
It does not matter if you win or lose, but you need to try. Oftentimes in the modern world, people laugh at those who fail, yet they themselves sit on the sidelines and do not try at all.
If you want to succeed, you need to roll up your sleeves and go down into the arena, to fight your struggles like an ancient gladiator, and not sit around complaining and not doing anything. If you fail, just get up and try again! Read More
There once was a little guy, scrawny guy who wanted to be a soldier and fight his nation’s enemies. He tried to enlist, but was turned down because physical characteristics were lacking. He was physically small and weak. Luckily for him, there was a secret government project that created a serum that could change a person’s physical characteristics and create a superhuman out of them.
So this guy, named Steve Rogers, took the serum and turned to Captain America. He fought many supervillains and became a superhero.
Unfortunately this story is fiction. However it does speak to the way many people in this world are trying to do things.
People are often trying find that magic serum or to find that silver bullet for whatever problem they have. That’s why articles on “hacks” are so popular.
These articles are interesting to read, but they often present a simplified version of reality. Furthermore, even if people read these articles, they don’t act on them.
They finish the article, think how mind blowing it is and then go back to doing the things that they were always doing.
The “hacks” mindset creates the impression is that if you learn this one little trick or do this one special thing, you will magically solve whatever you are trying to solve. It’s the same type of thinking that gets excited about secret serums and magic wands.
The truth is a bit different though. Just like there are no magic wands or secret serums that will transform you into a superhero overnight, there are very few magic hacks that will help you take the easy way out.
In reality life is hard. There are short-cuts, but even they are usually not easy. You need to work for things that you want.
When you realize this and stop looking for short-cuts and instead start creating a vision for yourself and implementing steps to fulfil that vision, then you will start making progress. When you take the long-term view to goals and problems, then you will finally improve. Read More
Last weekend I realized how powerful adopting a goal-driven mindset can be. As I have written in my previous post on goals vs. systems, you need goals in order to drive yourself towards success. Systems are very necessary, but if you don’t have the goals to focus on, then you might not get the results you are looking for.
Doing things without goals can end up with you just going through the motions and not improving. A goal-driven mindset also has one benefit that I discovered last weekend.
I was walking home from a shop, lugging heavy jugs of water. I have recently set some very long-term goals for myself, those of reaching the top of Mt. Everest and also of getting to the fitness levels of special forces guys. While it is quite possible that I might not reach these goals, the thought of them still drives me.
The water jugs were incredibly heavy in my hands and I was having problems carrying them. Then I reminded myself of my goal of reaching Mt. Everest one day and of all the hard work required to do it. I reminded myself of the fact that I have always wanted to be a special forces type of guy (but never got around to doing). A guy who accomplishes those types of goals doesn’t give up and doesn’t take the easy way in these types of situations.
Those thoughts suddenly changed my perception of the entire situation and the loads in my hands seemed to get much lighter, as if by magic. I kept on going.
This is related to the placebo effect. Thoughts have a big effect on the body and can sometimes greatly aid in any endeavor. Maybe similar things are at play as with cognitive biases and framing effects?
That’s how you achieve impossible things. When you are feeling pain, that doesn’t mean that you are going to break down right then and there. That only means that you are close to it, but still have a hidden reserve left.
You need to quickly evaluate whether you can push on and usually you still can. One part of the hidden mental processes that can help you with this are goals. They give you the motivation that is needed at some of these critical junctures, when you are about to give up.
It helps if you can visualize all the benefits that accomplishing all these goals can bring. This can then focus the positive self-talk in your head that often goes on during critical moments.
Of course visualization and self-talk are not some magic bullets that can solve every problem you have, you still need to set up a plan and execute it (so set up the systems), but they can give you an edge during some very important moments and push you over the top. Read More
You only have one life to live and you better make the most of it. If you are like most people, then you probably didn’t get too many breaks in life and weren’t born with a silver spoon in your mouth.
Most people will however continue on living their own hum drum lives, never rising above their own reality. You don’t have to.
The good news is that most heroes were born ordinary as well. Joseph Campbell noticed that most hero journeys start off in the ordinary world, where the future hero is living an ordinary life. Then one day things change and they begin creating their own legend.
If you want to get on a path to a better life, you need to heed the call of adventure and take the first step on that journey.
Whether it’s your entire life’s journey or a small chapter in your life, you need to realize that it’s all up to you. You have the power to create your own monomyth.
I don’t want to waste my time on this planet. I don’t want to live an ordinary life. For years I have been refusing the call to adventure. One of my biggest drawbacks was a quitter mentality.
I am sure you are the same way. You want your life to have meaning, a purpose, to stand for something. You want to experience life to the fullest and achieve great things.
That is something that keeps haunting me. The scary thing is that this wasn’t a one-off thing, but was representative of my inner mindset at the time. I was willing to work hard and try to be the best, but at critical junctures, I would quit. I was a quitter. When the going got too tough, I gave up.
Years later, I decided to change all that. I realized that life was passing me by and I was running out of the one thing that is the most precious commodity for all of us: time.
What set me on the path to adventure was the fact that I signed up for a trip to Africa to climb Mt. Kilimanjaro. Climbing mountains is something that I have never done and it’s hard. Going up in altitude is not easy and it gets harder the higher up you get. You cannot be a quitter if you want to get to the top of a mountain. Read More