A hidden superpower — How to be a better thinker
This is the second part of my new series “Building a framework for my life” In case you want to catch up on the first one, you can do so here:
To keep it short, I drafted a set of currently 27 values/principles I want to use as guiding principles for my life. Each week I try to incorporate one of those into my routine so that I slowly but consistently integrate all of them in my behavioral pattern. I want them to be both, second nature and an active point of reflection for more important decisions. In the first article, I explained why I think that health should always come first and tried to make a case for your health being the foundation of everything you achieve.
In the past week, I focused on the second principle on my list which I call:
Higher degree optimization — Think beyond what is superficial and act accordingly
In the following, I will explain how I define it and elaborate on how I want to use the principle by telling you about three different areas in which it adds value to how I think and act.
1) Individual decision making
Let’s start very simple. First order consequences generally describe the immediate effect of a decision. For example, you decide to go out to a bar, meeting an old friend from high school instead of studying for a test. Second order consequences describe the effects caused by the effects of your first decision. You did not study which means that you know less for the upcoming exam. Knowing less for the forthcoming exam reduces your chance to get a good grade, which may impact your desirability for a future job search etc. Thinking about higher order consequences is not always immediately apparent, though. It is also in itself not evaluative; it just forces you to think deeper. It can also be the case that the old friend you meet introduces you to someone in your desired industry and you have way better career opportunities than if you would have studied that night. Making good decisions is more about being right more often than wrong and also about being right more often than others. Simple examples for this are eating healthy instead of eating chocolate or working out instead of lying on your couch watching Netflix. Initially, your level of satisfaction is probably lower, but in the long-term, it will improve.
Taking decisions is only one area where you can apply the concept, though. Thinking about it more abstractly quickly shows that it applies to a variety of different areas. One can apply it to every system in which variables affect each other. To show you the broad area of applicability I will give you two very different examples below: Forecasting business opportunities and solving problems.
2) Finding new business opportunities
Reading forecasts for new business opportunities can get somewhat dull after some time. Often, they focus on the current hype and mention the same five possible applications like every other superficial article you can find on the web. Recent examples are “5 ways the blockchain will change your life” and “These 7 industries will be disrupted by AI”. While I do like the premise of these articles and enjoy reading them about industries of which I only have a basic understanding, I never read more than two per sector. While there are hundreds and hundreds of those articles, there is one type of article that is often lacking, in my opinion. As you might have guessed, it is related to second order consequences. To be more precise, I would love more essays that go much deeper into possible changes in industries or industry-ecosystems. Let us take one example where there is at least some coverage, what happens if autonomous cars replace human-driven cars. The most obvious industry that will change because of that is the automotive industry itself. There are a few adjacent ones that come to mind quickly, for example, industries that are dealing with other forms of transportation, gas stations, and car workshops. While the changes in those will be incredibly complex and offer plenty of business opportunities, there are a few others in which I am more intellectually interested. If you think a few steps further, there are industries which are not directly apparent but subject to significant change if autonomous cars become mainstream. One of the major ones is real estate. Especially in urban areas much will change. Just think about the space that is dedicated to parking in modern cities. Most of that space could be used differently. Another area that will change completely is the car insurance market. Most certainly the insurers will not target consumers anymore but just insure the companies that deploy the self-driving cars. Since the risks are much lower for self-driving cars than for cars with drivers that are subject to human errors, the sector will shrink dramatically. This further leads to a drop in the investment of those insurers which are significant players in the capital markets. Moreover, the new usage of the space that was occupied by parking areas before will lead to a lot of new opportunities. One example would be the emergence of specialized self-driving car garages from where those cars would be deployed and where they drive to if they anticipate a defect. Additionally, racing tracks for people that want to drive on their own could become more prevalent. While there are many more examples, I think you got the gist of it. I am personally fairly interested in thinking about higher-order consequences in different areas. I am so interested in it that I wrote my last scientific paper in college about second-order consequences of Artificial Intelligence. If you want to talk about different industries and potential changes, feel free to reach out.
3) Problem-solving (5 Whys)
Almost everyone you meet in the professional world wants to be a “problem-solver.” Solving problems is important and depending on the difficulty of the problem also well paid. If you break it down to the core, most of what humanity is doing is solving problems either when or before they arise. Our ancestors had to solve problems like “Where do I get food?”, “How do I stay warm at night,” “How do I avoid being killed by the raging mammoth that is running towards me?”. Thinking in terms of higher order consequences can improve your problem-solving skills significantly. For this, the 5-Whys technique can be beneficial. It is a tool commonly used in manufacturing, some of you might know it from the six sigma approach or from reading about Toyota’s manufacturing principles. Using this technique, you do not stop by identifying the immediate cause of the problem but continue to ask what caused the underlying problem until you have reached the root cause. The classic example is the following:
1. “Why did the robot stop?”
The circuit has overloaded, causing a fuse to blow.
2. “Why is the circuit overloaded?”
There was insufficient lubrication on the bearings, so they locked up.
3. “Why was there insufficient lubrication on the bearings?”
The oil pump on the robot is not circulating sufficient oil.
4. “Why is the pump not circulating sufficient oil?”
The pump intake is clogged with metal shavings.
5. “Why is the intake clogged with metal shavings?”
Because there is no filter on the pump.
By going deep into the problem, you can find the root cause that initiated it all and focus on removing it. Obviously, it will not always take five steps but sometimes more or fewer but in general it is an excellent proxy to keep asking why several times when you encounter a problem you want to avoid having in the future.
If the concept is so powerful why are not more people using it effectively? Because it is hard; Because it is painful; Because it is not the quick fix. Diving deep into a topic or finding the real cause of a problem takes time and resources. The more natural way is to stay on the surface and not care about the rest. I have to admit that for a long time, I took the easy way myself, I still do often. However, I take the difficult approach more and more. Every time I do, it is gratifying once I went through it. One thing that helped me a lot is comparing problem-solving and understanding topics to workouts. If you only do a few alibi pushups, you will never get strong. My goal is to be aware of the fact that truth is seldom easily recognizable on the surface and that digging for it can be exhausting and painful. My goal is also to be aware of the fact that digging for it provides long-term benefits that outweigh the costs by far. If I had to summarize the principle into two lines it would be something like the following; it is my goal to think beyond the immediate consequences of my decisions and to go much deeper into topics/problems before I think I understood them.
Even though this is a more intellectual principle and not a simple ten minute a day habit you can adapt, it helps to be aware of how powerful this concept is. Try to implement it into your problem-solving routine. If you want to start to apply the concept of higher-order thinking immediately, you can do the following: Write down three things that are important to you, and you think are true. For example, those could be “Exercise is good for my health”, “sugar is bad for my health” and “I think a universal basic income would save society.” Then ask yourself why you have this belief. What fundamental truth is it built on. Can you articulate it properly and cite sources that support your claims. You will notice fairly quickly that most things you think are true have less proof than you would imagine. While it is inefficient to find the ground truth for everything, it helps you in navigating your life and also in discussions with other people if you have thought about a topic by using the approach outlined above. Interestingly this exercise has a lot of overlap with a different value about which I will talk more in the following weeks. I noticed that a lot of my principles are interdependent and support each other while some others are in conflict with each other and there is a need for balance. I do have the feeling, though that they help me structure who I want to become which is a major reason why I am doing the whole thing. As always, you find two content suggestions of mine below.
A guide to reading scientific papers
This blog post introduces a method how non-scientific people can understand the most critical aspects of scientific papers. Since this is a major benefit of finding out what is true or at least what is currently believed to be true, I have the feeling that many of you appreciate it. Being one step closer to empirical truth enables you to form your own opinion without relying solely on gatekeepers. At the same time, I think that good science journalism is extremely important and helpful in understanding specific topics.
Second order consequences of cars
This article by Venture Capitalist Ben Evans is closely related to the topic of my article. Ben mentions two current trends in the automotive industry, electric and autonomous cars, and what effects they have on peripheral industries. If you enjoyed my example above, you will love this one: Cars and Second Order Consequences:
