Category: Problem Solving Page 1 of 2

Eisenhower Matrix: One Little Tool To Help You Decide On Priorities

Dwight D. Eisenhower was one of the top American generals during World War 2, and later also became the 34th President of the United States. As can be expected, these challenging roles kept him quite busy.

In order to keep a level head and get things done, he needed to be able to prioritize. This led him to develop a simple method to determine which tasks he had to do immediately and which he could avoid. It is now called the Eisenhower Method and uses one little tool called the Eisenhower Matrix.

It involves drawing up a box, dividing it into 4 quadrants and then labeling them. Basically, whenever you are doing a task, it is usually either important or not important. It is also usually either urgent or not urgent. These are also the labels that Eisenhower used.

The top left-hand box is labeled important and urgent. That’s where you put all the things that you need to do right now and that are important.

The top right-hand box is labeled important, but not urgent. These are things that are important, but ones that you don’t have to do straight away. These things you can pre-plan for later.

The bottom left-hand box is labeled not important, but urgent. These are things that you should attempt to delegate to others.

The last box, the bottom right-hand one, is labeled both not important and not urgent. These are usually things you shouldn’t be doing at all. So eliminate them.

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How Elon Musk Is Applying First Principles Thinking To All The Different Processes In His Company

Elon Musk is known as a first principles thinker when it comes to inventing new things, but he has recently started applying this type of thinking across all the different processes in his company.

In a letter to his employees, he outlined how the spending practices in the company will be reformed:

“Going forward, we will be far more rigorous about expenditures. I have asked the Tesla finance team to comb through every expense worldwide, no matter how small, and cut everything that doesn’t have a strong value justification.”

“All capital or other expenditures above a million dollars, or where a set of related expenses may accumulate to a million dollars over the next 12 months, should be considered on hold until explicitly approved by me. If you are the manager responsible, please make sure you have a detailed, first principles understanding of the supplier quote, including every line item of parts & labor, before we meet.”

He wants to have his managers apply first principles thinking to all the things they do, including how they source different components from suppliers.

In an analysis of how subcontracting works in his company, Musk found out that it is a complicated system that creates a lot of overhead.

“I have been disappointed to discover how many contractor companies are interwoven throughout Tesla. Often, it is like a Russian nesting doll of contractor, subcontractor, sub-subcontractor, etc. before you finally find someone doing actual work. This means a lot of middle-managers adding cost but not doing anything obviously useful. Also, many contracts are essentially open time & materials, not fixed price and duration, which creates an incentive to turn molehills into mountains, as they never want to end the money train.”

What this means is that all his employees, especially the ones in management positions, need to be first principles thinkers, no matter whether they sit in the lab and create new inventions, or sit in front of the computer looking at Excel tables all day.

Should you be a first principles thinker 100% of the time?

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The Vision Of Genius: Nikola Tesla’s Guide To Coming Up With Truly Innovative Ideas

For many people, if you are told to think of a wacky scientist, the name of Nikola Tesla usually comes up at the top of the list.

Anyone remember his Tesla coil in “Command and Conquer: Red Alert”? I always loved that thing when playing the game on my computer. Unfortunately this was one of his ideas that did not see mass production.

He was a veritable genius who came up with very creative ideas, and his propensity for first principles thinking can serve as an inspiration for any budding inventor in training.

Tesla was a very original thinker and one technique that he used to come up with ideas is visualization. He would literally picture his inventions in his head.

This is something that he learned to do through experience and it can be learned by you as well.

As a boy, his head was full of things that annoyed him and so he started using the visualization technique to get rid of these thoughts:

By that faculty of visualizing, which I learned in my boyish efforts to rid myself of annoying images, I have evolved what is, I believe, a new method of materializing inventive ideas and conceptions. It is a method which may be of great usefulness to any imaginative man, whether he is an inventor, businessman or artist.

The first step of the visualization method is the incubation period. You gather building blocks of knowledge and let your mind ruminate on them in the background:

Here in brief, is my own method: after experiencing a desire to invent a particular thing, I may go on for months or years with the idea in the back of my head. Whenever I feel like it, I roam around in my imagination and think about the problem without any deliberate concentration. This is a period of incubation.

In the second step, there is a period of direct effort, or thinking of the specifics:

Then follows a period of direct effort. I choose carefully the possible solutions of the problem I am considering, and gradually center my mind on a narrowed field of investigation. Now, when I am deliberately thinking of the problem in its specific features, I may begin to feel that I am going to get the solution. And the wonderful thing is, that if I do feel this way, then I know I have really solved the problem and shall get what I am after.

The mind starts playing around with all the different building blocks and then connects them subconsciously.

The feeling is as convincing to me as though I already had solved it. I have come to the conclusion that at this stage the actual solution is in my mind subconsciously though it may be a long time before I am aware of it consciously.

The key is to think of everything in your mind first, to examine different features and make improvements to this mental model before you put anything on paper:

Before I put a sketch on paper, the whole idea is worked out mentally. In my mind I change the construction, make improvements, and even operate the device. Without ever having drawn a sketch I can give the measurements of all parts to workmen, and when completed all these parts will fit, just as certainly as though I had made the actual drawings. It is immaterial to me whether I run my machine in my mind or test it in my shop.

An important thing to remember is to always keep the big picture in mind and start with a holistic view before you start working on the details:

Some people, the moment they have a device to construct or any piece of work to perform, rush at it without adequate preparation, and immediately become engrossed in details, instead of the central idea. They may get results, but they sacrifice quality.

Tesla came up with many great inventions using this method:

The inventions I have conceived in this way have always worked. In thirty years there has not been a single exception. My first electric motor, the vacuum tube wireless light, my turbine engine and many other devices have all been developed in exactly this way.

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Find Out How To Combine Building Blocks Of Knowledge And Come Up With Great Ideas

A great idea or invention is usually a combination of other different ideas or inventions. Things don’t happen in a vacuum and as the old saying goes, you stand upon the shoulders of giants.

One of the greatest skills that you can have is to be able to combine ideas from different sources. And this is something that expert-generalists, or Renaissance Men, excel at. Their greatest assets are their combinatorial and associative skills.

However, how do you develop and cultivate these types of skills?

Step 1: Collect pieces of information

The first thing you need to do is to know the information and have it available. So the first step is the collection phase.

This has been described in different ways, as collecting pieces of a puzzle or different building blocks. If you want to glue together a picture out of a puzzle or build a house, you need to have the pieces ready in order to do that.

Each piece of knowledge is a like a building block, you can use it in different ways and combine it with other building blocks. The combinations are endless and every resulting structure can look different, even if you use the same building blocks (or it can look the same, up to you really).

How do you go about collecting these building blocks? One thing is by reading a lot. That’s why I wrote a short article on the reading habits of guys like Warren Buffett or Charlie Munger. It is kind of obvious, but a lot of people don’t do it.

Another way is to collect different experiences, like Steve Jobs says. Go to different places, expose yourself to different ideas, try different things. All of this will enrich you, and give you some building blocks which you can use later.

Once you have a good selection of building blocks (information) ready, you can go on to creating a few useful mental models to guide you. These are basically representations of real, or imaginary situations or things that you create in your head.

Scottish psychologist Kenneth Craik proposed the idea (although similar ideas were proposed earlier by others as well) that the mind works by constructing small-scale models of reality in order to reason and to offer explanations for events. Modern research so far seems to prove this assertion.

You can actively use these workings of your brain by building a latticework of mental models, something that comes from Charlie Munger, one of the greatest financial investors of all time.

From all the studying he does, Munger selects a handful of big ideas and stores them for later. These can come from things like physics, chemistry, economics, humanities, or any other type of discipline. As long as you think it will be useful later.

To quote Charlie Munger:

You have to learn all the big ideas in the key disciplines in a way that they’re in a mental latticework in your head and you automatically use them for the rest of your life. If you do that, I solemnly promise you that one day you’ll be walking down the street and you’ll look to your right and left and you’ll think “my heavenly days, I’m now one of the few competent people in my whole age cohort.” If you don’t do it, many of the brightest of you will live in the middle ranks or in the shallows.

The sources of mental models can come from anywhere. When you are reading books or collecting experiences, try to summarize some of the big lessons that you get out of them. These can then serve as your own personal mental models.

Step 2: Things start clicking automatically

You might not believe me, but collecting the information is the most important step. By collecting more and more information, things will start clicking automatically. Trust me! 🙂

You might have had the experience of you not understanding a problem, trying to go at it through different ways and failing. Then you forgot about the problem, but were walking one day and suddenly things clicked.

This is often called the “Eureka” moment, just like Archimedes had his “Eureka” moment when he was entering the bathtub.

Maria Popova, in an article for “Smithsonian Magazine” writes:

There is a curious cultural disconnect between our mythology of spontaneous ideation – the Eureka! moment, the stroke of genius, the proverbial light bulb – and how “new” ideas actually take shape, amalgamated into existence by the combinatorial nature of creativity. To create is to combine existing bits of insight, knowledge, ideas, and memories into new material and new interpretations of the world, to connect the seemingly dissociated, to see patterns where others see chaos.

These sudden flashes of the lightbulb are quite common. This doesn’t mean that something appears out of nothing. The building blocks of your idea are already there in the brain. It is that your brain is just playing around with them subconsciously.

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Combinatorial Knowledge Is The Key To Many Innovations – Find Out How To Apply It

In 2007, Steve Jobs got on stage to reveal a device which would go on to revolutionize the way we work in the world today. The device in question is the iPhone and it ushered in the era of the smartphone.

Ever the showman, Jobs gave a riveting speech. There is one part that really stands out and describes the essence of what the iPhone is.

An iPod, a phone, an internet mobile communicator. An iPod, a phone, an internet mobile communicator. An iPod, a phone, an internet mobile communicator. Do you get it? These are not three separated devices. This is one device, and we are calling it iPhone.

He mentioned three things: an iPod, a phone, and an internet mobile communicator. All of these things existed on the market when the iPhone came out. However each one was its own device.

What did Jobs and Apple do? They combined them and put them on one device!

This is what combinatorial knowledge is all about. You take different already existing pieces and combine them together to make something new. This something new can be another piece of knowledge, or a new device or anything else.

It is very, very hard to be truly original and come up with something totally new, something that has never existed before and which truly changes our understanding of the world. For the most part, to do that, you truly need to dedicate a lot of time to your field. This is what Albert Einstein did with his theory of relativity.

However, if you dig deeper, you will notice that even Einstein used some previously discovered knowledge, which served as inputs. He then combined it with his own things. James Hutton, when coming up with his theories on geology, also combined different strands of knowledge that were floating around in his time.

Combinations of knowledge from different sources is the key to new knowledge. It is also the key to new revolutionary devices like the iPhone.

An article in “Wired” magazine describes how Jobs came up with the idea:

In 2002, shortly after the first iPod was released, Jobs started thinking about developing a phone. He saw millions of Americans lugging separate phones, BlackBerrys, and — now — MP3 players; naturally, consumers would prefer just one device. He also saw a future in which cell phones and mobile email devices would amass ever more features, eventually challenging the iPod’s dominance as a music player. To protect his new product line, Jobs knew he would eventually need to venture into the wireless world.

The article goes on to list some of the challenges that such a product would have to overcome:

If the idea was obvious, so were the obstacles. Data networks were sluggish and not ready for a full-blown handheld Internet device. An iPhone would require Apple to create a completely new operating system; the iPod’s OS wasn’t sophisticated enough to manage complicated networking or graphics, and even a scaled-down version of OS X would be too much for a cell phone chip to handle. Apple would be facing strong competition, too: In 2003, consumers had flocked to the Palm Treo 600, which merged a phone, PDA, and BlackBerry into one slick package. That proved there was demand for a so-called convergence device, but it also raised the bar for Apple’s engineers.

These challenges lay in vastly different fields, not only with the technology, but also the way the wireless industry was structured and the business models. In order to make the iPhone a success, all these things would have to be pulled together.

Compare this description of what Steve Jobs (and his Apple team) did, and what Johannes Guttenberg did when coming up with his printing press. A passage in Samuel Arbesman’s “The Half-life of Facts” describes the process:

It turns out that the printing press is far from simple. The technological innovations that Gutenberg developed were much more than the modification of a wine press and the addition of the idea of movable type. Gutenberg combined and extended a whole host of technologies and innovations from an astonishing number of areas, and that is what made his work so powerful.

He used metallurgical developments to create metal type that not only had a consistent look (Gutenberg insisted on this), but type that could be easily cast, allowing whole pages to be printed simply at once. He used chemical innovations to create a better ink than had ever been used before in printing.

Gutenberg even exploited the concept of the division of labor by employing a large team of workers, many of whom were illiterate, to churn out books at a rate never before seen in history. And he even employed elegant error-checking mechanisms to ensure that the type was always set properly: There was a straight line on one side of each piece of type so that the workers could see at a glance whether any letters had been set upside down.

Only by having the combined knowledge of all of these technologies does the printing press become possible and cost-effective.

Just like Steve Jobs had to combine different elements when coming up with the iPhone, Johannes Guttenberg had to do something similar when he came up with the printing press. If you look at other types of inventions that revolutionized our world, you will most likely see a similar process at play.

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A Short Lesson On First Principles Thinking

A while back, Elon Musk revealed that his success is based on a special way of solving problems called first principles thinking.

In this type of problem-solving method, you don’t rely on old ways of doing things (analogies), but instead you rethink the problem from the ground up. You go back to the fundamental assumptions (first principles) that underpin the problem and try to see what other possible directions could be followed.

However first principles thinking is not natural to most people. That is because the human mind evolved in order to promote survival. This favored speed and efficiency in the thinking process and not a slow, thorough evaluation.

Barriers to first principles thinking:

In order to reach quick decisions in a world of uncertainty, the human mind uses heuristics, or shortcut methods to solving problems. In most cases, these result in good enough answers, but there are instances when heuristics fail. These failures are called cognitive biases.

If you want to know more about cognitive biases, check out my series on critical thinking and my cognitive biases framework:

How to be a critical thinker

My Cognitive Biases Framework

There are two main cognitive biases that make it harder for you to solve problems using the first principles method: the Einstellung effect and functional fixedness.

These two effects are not bad things in themselves. They do promote fast thinking and an efficient way of doing things. For the vast majority of tasks this is the best way to proceed. In most cases, you want to follow best practices and do things using the tried and tested method.

Daily practice of the same moves reinforces them in the brain. More and more synapses between specific neurons are built up, which helps information to be passed on quicker between them. This then enables you to execute the moves faster and better (and after a significant amount of practice often even without thinking about them, just by instinct).

This is what makes experts so good at what they do. Their heuristics become automatic and since they have been in these situations many times before, they can execute almost effortlessly.

However there is also a problem. Once these neural pathways connecting different neurons are built up, it is hard to pass around them and to do things differently. When one neuron lights up, the other ones connected to it light up too.

That’s why functional fixedness is so strong. If you have a hammer and the only thing you have ever done with it is to pound in nails, then you will only see one use for the hammer. You might become really good at pounding in nails with a hammer, but you will fail to see the other potential uses of the hammer.

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Don’t Argue About The Tactics, If You Don’t Have A Strategy In Place

Sometimes people argue about the little things, while missing the big picture.

Many people will be familiar with this situation. At work, frequently the time is spent in endless meetings, arguing over things which at the end don’t really matter.

People like to argue over tactics, without actually having an overall strategy in place.

Strategy vs. Tactics

Do you know what you want to achieve in this life and how you will do it? Does the place you work for have a clear vision of what it wants to do and how it wants to achieve it?

Most people don’t. And amazingly neither do most places of work.

Sure, you might spend countless hours arguing with your boss on whether you should do Action A, but no time is spent reflecting how doing Action A is supposed to contribute to whatever the ultimate goal is.

It’s amazing that people or places of work don’t have a clear strategy in place.

Strategy is something that is often misunderstood and rarely spelled out. Yet, having a clearly defined strategy is often the difference between success and muddling along in chaos.

If you were building a house, would you first define what it will look like and how you would build it, or would you first try to decide whether you need shovels and what length they should be?

If you want to build a house, you first need to determine what it will look like and how you will build it. Only then can you decide what types of tools you will build it with.

This is the essence of the strategy vs. tactics debate.

To help you better understand what each of the two terms means, you need to keep in mind that both words originally come from the military sphere.

In every military campaign, the goal is to win the war. However there are different strategies that you can adopt to do that.

You can rely on tanks and the blitzkrieg like the Nazi Germans did at the beginning of WW2 or on guerrilla warfare as many of the resistance groups did under occupation.

This is what falls under the term strategy. Each strategy then implies some tactics.

For example, if you are a guerrilla fighter, your tactics would consist of sabotage and small skirmishes. While if you are a tank commander who is tasked with implementing the blitzkrieg strategy, your tactics would consist of grouping tightly together large numbers of tanks and quickly overwhelming the enemies with them using speed and surprise maneuveurs.

If you are an MMA fighter, and you decide to implement the ground and pound strategy, then your tactics would consist of setting up your opponent with punches and kicks, and then in a surprise moment, bringing them down in order to control them and hit them with a barrage of punches as you sit on top of them.

Military is not the only sphere where the terms strategy and tactics are used.  Today these two concepts are used for example in business. The meaning stays the same, just the domain changes.

In terms of running a business, Alfred Chandler, a management researcher, defined strategy like this:

Strategy is the determination of the basic long-term goals of an enterprise, and the adoption of courses of action and the allocation of resources necessary for carrying out these goals.

Resources are limited and you need focus in order to achieve your goals. Strategy gives you that focus.

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Bayesian Thinking: If You Want To Be A Critical Thinker You Need To Understand This Concept

It is the middle of the Cold War. Tensions are high and the United States wants to be ready to retaliate against any Soviet nuclear strike or do a first strike if needed.

In order to be able to have the capability to react fast, General Thomas S. Power initiates an operation called “Chrome Dome”, which has B-52 bombers armed with thermonuclear weapons continuously flying on a set route reaching certain points close to the Soviet border.

As part of this operation, early on the 17th of January 1966, a B-56G bomber of the United States Air Force, takes off from the Seymour Johnson Air Force Base in North Carolina. It is carrying 4 hydrogen bombs.

At 10:30 local time, over the coast of Spain, it begins a routine refuelling with an air tanker plane.

However there is a misunderstanding and as the procedure is about to begin, the tanker plane collides with the fuselage of the bomber, causing the bomber’s left wing to snap off. A huge explosion destroys the air tanker and severely damages the bomber.

All people aboard the air tanker, as well as some aboard the bomber die instantly. The rest of the crew of the bomber manage to parachute to safety.

The wreckage falls to the ground near a small village on the coast called Palomares. The nuclear bombs land nearby as well.

Three of the bombs are recovered relatively quickly (two are partially damaged however and cause nuclear leaks on the ground), but the fourth is nowhere to be found.

The guys searching for the bomb look at the evidence and decide that it had probably been blown over the sea by the wind and so is probably lying somewhere at the bottom of the Mediterranean.

They are facing a dilemma. If damaged, the bomb could cause great harm. If undamaged, it could fall into enemy hands. Cost what it may cost, it needs to be found.

What to do?

Put yourself in their shoes. There are some things that you do know.

A tail plate of the parachute was recovered, leading to the high probability that the bomb’s parachute probably deployed.

You have a probable eye witness account. A local fisherman says he saw the bomb enter the water. He points out the location where he saw it.

You also have a detailed map of the seabed in that area.

Enter John P. Craven.

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This Checklist Will Help You Avoid Cognitive Biases And Make Better Decisions

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.

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