Elevate Your Mind.
Through the Re:Mind Newsletter, delivered every other Tuesday, we unleash your full potential and upgrade decision-making. We’ll explore mental models and life design.
Making Decisions: A Mental Models Cookbook
By Juan Carlos
Making a decision is fraught with biases that occur consciously and unconsciously. Any solid thinker’s job is to cite and label those tendencies in their mind and environment, so they make the best decision consistently. You can consider the most critical data and make the right choice by giving yourself a wide enough angle on a situation or problem.
- Check your bias: negative or positive feelings about stakeholders can affect your choice without reason. You see them in a new light by weighing whether your preconceived notions incorrectly attribute an action to their personality.
- Consider the forces in your organization’s sphere, such as established rivals and new entrants.
- Discover your initiative’s or product’s opportunity cost and hone your connection to potential customers.
- Remember that the simplest explanation is probably correct. Complexity is often a recipe for muddling a straightforward answer.
- Fundamental Attribution Error undoes innate biases in how you perceive others’ actions versus your own.
- Porter’s Five Forces looks to the influences surrounding an organization or situation and use those findings as a springboard for decision-making.
- Comparative Advantage is a way to review the opportunity cost of a product or initiative and choose the quality or price that exceeds expectations in that category.
- Occam’s Razor helps you choose between competing solutions — it’s often the simplest.
The Deep Dive
Fundamental Attribution Error
Regardless of external forces, people think that actions mirror an individual’s personality. Also known as the over-attribution effect or correspondence bias, the overarching theme is that folks tend to be more lenient with their actions than others, holding individuals fully accountable for their behaviors without considering other factors. People judge other individuals more severely than they do themselves, often forgiving and rationalizing one’s behavior when taking similar actions. Unfairly assuming the worst and blaming dispositional factors can affect the moment and future interactions with that individual who now wears that label on their person rather than on the circumstance.
Porter’s Five Forces
The five forces that influence a company’s ability to serve its customers and profit are the threat of substitute products or services, the threat of established rivals, the threat of new entrants, the suppliers’ bargaining power, and the customers’ bargaining power. Any change in those forces often demands a business to reassess its position in its industry’s landscape. It’s a valuable tool to assess how each force affects the industry you’re in and utilize that information to determine how strong a company’s position is, short and long-term. As a result, you’ll have a solid understanding of businesses with good and bad economics.
An entity’s capacity to deliver a service or product at a lower opportunity cost than other people, organizations, or nations. As a result, the entity can sell a good or service for less than its competition. Whenever you consider a good or service, each has advantages and disadvantages. The opportunity cost reveals the potential benefits an entity misses out on when picking one option over another. The principle informs choosing the best option while contemplating trade-offs. The option with the best overall value is the one with the comparative advantage. Determining the opportunity cost of goods or services will inform decision-making and, ultimately, free you to choose the best route forward each time.
For every accurate explanation of something, there is an infinite number of more complex and incorrect possibilities. When confronted with competing solutions for the same thing, the simplest is likely the correct one. Identify a possible solution by stripping away false ones, and have more confidence in its validity.
Unlock Clear Thinking
Fueled by a passion for storytelling and excitement for life design, I find joy in reframing narratives to illuminate paths toward fulfillment. My experience spans high-growth startups, filmmaking, and social impact. Through mentoring and coaching, I guide teams and individuals to discover purpose and cultivate a meaningful life.
I started in film, directing award-winning features such as ‘Know How’ and ‘Second Skin.’ These cinematic endeavors earned me recognition and allowed me to serve as a spokesperson for Adobe. I founded the White Roof Project, a grassroots climate activism campaign that mitigated the urban heat island effect and spurred community-led social change.
I carried my storytelling skills and passion for societal transformation as I transitioned into the startup ecosystem. Initially, I contributed to social impact apps, converting complex issues into accessible solutions. This early experience laid a foundation for my later work, where I led the development of groundbreaking products within high-growth startups. My work has underscored the potential of technology to innovate and amplify the quality of human life.