Without realizing it, we all use mental models. When you’re thinking of product/market fit, you’re using one. When you believe in the value of money, you’re using one. When you’re avoiding a mental bias by logically thinking through a problem, you’re using one.
In its widest definition, any theory that helps you understand something is considered a mental model. Others take a more practical analogy. They define them as “apps for your mind.” Whichever explanation you choose, mental models are more important than ever before.
Take billionaire investor Charlie Munger. He swears by them to make sound investment decisions. In his own words:
“You may have noticed students who just try to remember and pound back what is remembered. Well, they fail in school and in life. You’ve got to hang experience on a latticework of models in your head.”
But you don’t have to be an aspiring fund manager to find value in mental models. In fact, two societal currents are underway to increase their worth tremendously:
- Knowledge work.
Ever more people are paid to work with their brains instead of their hands. As Harvard Business Review wrote in a recent article:
“In today’s marketplace, the smartest companies aren’t those that necessarily out-produce the competition. Instead, it’s the organizations that outthink them.”
Mental models help you do just that.
At the same time, algorithms and robots are coming for our jobs. They will eat their way upwards to take over ever more complex tasks. “It’s a matter of when, not if,” would the robot villain in a B-rated science fiction movie now say.
You don’t need a degree in economics to understand this will leave more people scrambling for fewer jobs. Even if newer, more complex jobs appear as by magic, you’ll still have to think better to get and keep that job.
Mental models are part of the answer.
How do they work?
Ironically, we first need a model to understand mental models. Imagine them as a toolkit: you need to pick the right tool for the right problem. The more tools you have, the better equipped you are to solve a wider variety of problems. This also helps minimize mistakes: more tools to approach a problem with means more certainty. Since we’re dealing with theories, they can always turn out to be proven wrong one day. That’s why it’s good to run a problem through several relevant models. From the Mental Models blog:
“People deduce that a conclusion is necessary — it must be true – if it holds in all of their models of the premises; they infer that it is probable – it is likely to be true – if it holds in most of their models of the premises, and they infer that it is possible – it may be true – if it holds in at least one of their models of the premises.”
Act like an intellectual carpenter: you need as many relevant tools in your toolkit as possible. Let’s look at a few useful ones.
Examples of mental models for business
Covering every mental model in existence would make this a very long article. Instead, we’ll focus on usage of models that improve your professional life.
Afterwards, we’ll discuss how to make mental models part of your daily routine. This is key, as it’s easy to forget about your toolkit in the heat of the moment.
In decision making
In an organization, especially one doing knowledge work, decision making is a key activity. Yet surprisingly few follow a disciplined approach, and even less do so with mental models in mind.
One model that is highly suitable for making better decisions is the Circle of Competence. It has been attributed to Warren Buffett and Charlie Munger and can be summed up as follows:
- Understand where you have expertise, knowledge, and skills.
- Understand where you don’t.
- Operate in the areas where you do, stay away from the areas where you don’t.
- Slowly expand your areas of competence.
This might sound obvious, but many of us don’t know what we don’t know. This is the danger zone where big mistakes happen, especially in decision making. Being aware of what you do not know will help you avoid stupidity. It can be the trigger for going to look for outside advice, or to avoid a decision altogether.
Other models to check out for decision making:
It might not be immediately obvious how to apply mental models to marketing. But consider this example: when Salesforce came to market, potential customers did not have any concept of software operating in the cloud. At the time, they expected to buy boxed CDs (and later DVDs) for installation on their computer.
Salesforce understood they had to shift people’s thinking. From software-in-a-box to software-as-a-service. In other words, they had to change the mental model in the buyer’s mind. This is why they ran the “No Software” campaigns for years, to shift the concept people have of what software is.
Ask yourself the following three questions to determine if your marketing should also focus on changing your customer’s mental models:
- Do they fail to see a problem that seems obvious to you?
- Do people recognize the problem, but fail to see how your solution could solve their problem?
- Do people recognize the problem, and the value of your solution, but fail to make the change?
Is the answer to one or more of these questions “yes”? Then consider to focus your marketing efforts on shifting your prospects’ mental models. You need to change the way they think about the world before they will be ready to accept your solution.
Other examples of mental models in marketing:
As The Economist declared at the start of this year “Lifelong learning is becoming an economic imperative.” Faced with continuous technological change, we need to keep adapting ourselves to stay relevant. Luckily, mental models can help once more.
A great example of a simple mental model for learning is The Feynman Technique from the Nobel-prize-winning scientist with the same name. He defined this simple model to learn and understand anything:
- Choose a concept.
- Explain it to a toddler.
- Identify gaps and go back to the source material.
- Repeat until all gaps are eliminated.
This approach is especially useful in today’s world of information overload, perpetual busyness, and dubious “facts.” It’s easy to think you understand a concept after reading a few blog posts and skimming through a book about the topic. But when you apply Feynman’s model you’ll often realize there are gaps in your knowledge. Now you know what to do!
Other models to check out related to learning:
Implementation in daily life
Reading about mental models in an article like this is one thing, actually using them in daily life quite another. You need to build your toolkit, remember to use it when the right moment arises, and then you also need to keep adding new tools.
This process can be captured in four essential steps:
You build your toolkit through reading. In fact, the wider you read, the better. As blogger and author James Clear writes in his article about Richard Feynman:
“If you develop a bigger toolbox of mental models, you’ll improve your ability to solve problems because you’ll have more options for getting to the right answer. This is one of the primary ways that truly brilliant people separate themselves from the masses of smart individuals out there.”
But reading alone doesn’t get you there. Unless you have an amazing memory, you’ll need to be able to store your mental models somewhere. I use digital note-taking tool Evernote for this purpose, but you can also use a physical notebook, or even go for a meticulously organized notecard system.
It’s also important to understand how different mental models relate to each other. You need to connect them to see their relations. This helps you apply the right model at the right time. This is one reason why I prefer a digital system over a physical one. It allows me to create tags and cross-reference notes.
The last crucial step is to have a trigger, something that reminds us to actually apply the models we have stored.
Mental models are useful when the stakes are high, when we’re faced with important decisions, deadlines, and other types of pressure. Under these circumstances we often fall back into our old habits. Without some kind of reminder, we completely forget about the trove of models we’ve stored in our toolbox when we need them most.
To avoid this, create triggers that are part of existing routines. Set a reminder on your phone twice per day. Make reviewing your toolbox part of a process checklist. Ask your assistant and other colleagues to prompt you. Make “check mental models” part of your fixed meeting agendas. Print out quotes from Charlie Munger and put them on your office wall. Whatever makes it work for you, ensure you remind yourself frequently about your toolkit. Otherwise you’ll certainly forget.
Applying mental models to your every day work can help you excel far past your competition. It could even equip you so well that you could pioneer an entirely new industry.
Even more models
You’re now equipped with a solid understanding of mental models. What they are, how to build your toolkit, and how to ensure you actually use them. But the examples we discussed in this article are really only the starter to the full mental buffet. There are models for every discipline and for every situation you might face in work or life.
Below an overview of useful sources that get you on your way and allow you to stack up your toolkit in no time. Improved thinking guaranteed!
Resources on mental models
- Farnam Street (blog)
- Mental Models I Find Repeatedly Useful (article)
- Seeking Wisdom (book)
- Poor Charlie’s Almanack (book)
- Thinking, Fast and Slow (book)