You’re in a VUCA world now
Life is a sequence of decisions. Every day, we are faced with hundreds of choices: some small (what to eat for lunch), some substantial (where to live or where to work). The fear of ‘the wrong choice’ can be debilitating, while the amount of information required to make some choices can be overwhelming. We live in a world of ever-increasing complexity, and what we need is a better game plan – better maps of the territory of life, more robust mental models that effectively depict reality and help us make better decisions, faster. We call those maps ‘mental tactics’.1
The book you are holding offers a selection of proven approaches to problem solving, decision making and implementation. It is for all of you who want to be more effective and efficient in your professional and personal lives. Mental tactics are cognitive shortcuts that help us identify patterns and relationships, avoid common cognitive errors, view the world from different angles, break down complex problems and take action.
The mental tactics portrayed in this book are distilled from various fields of research and practice, including statistics, politics, economics, systems theory, investing, operations research, game theory, medicine, psychology, military intelligence and philosophy. You will find that most mental tactics are applicable well beyond the disciplines in which they originated. Once you internalise them, you can apply them to a broad range of situations, from self-management to team effectiveness, to organisational leadership. They are as applicable to your personal dilemmas as your professional conundrums.
This book will help you to derive insights from data, overcome cognitive flaws, make more rational decisions and identify the fastest and most efficient path to implementation. In this book, we tend to address problems and decisions from an analytical standpoint. We favour simple, systematic approaches, which we illuminate for you through the checklists.
Our goal is to give you tools that are practical and immediately applicable. We wrote this book to share ideas and tools that we believe deserve a wider audience. Using the mental tactics has made a huge difference for the two of us, both in terms of the quality of our decisions and the speed and efficiency of our decision making. We started sharing these techniques with each other, our teams and wider network – and this book was born. We know the mental tactics here can help you in the same way and we are excited for this adventure you are about to come on with us. Let us begin!
Modern times
“You the people have the power, the power to create machines, the power to create happiness! You the people have the power to make this life free and beautiful, to make this life a wonderful adventure!” —
Charlie Chaplin2
One of the most iconic scenes in the history of film depicts the Little Tramp, played by Charlie Chaplin, fixing products on an assembly line (see above). Over time, Little Tramp himself becomes more and more machine-like, determined to accomplish one thing and one thing only: wrenching screws on gadgets that pass by on a conveyor belt, over and over again.
In an attempt to increase efficiency, the factory supervisor turns a lever to speed up the assembly line. Little Tramp hastens to keep up and grows increasingly more desperate as he races to complete the task against the ever faster tide of work.
Today, we find more and more monotonous labour tasks completed by algorithms or robots. While the industrial environments in Chaplin’s film focused on controlling every movement of the worker (one scene shows Little Tramp as a guinea pig for a machine that feeds workers so they never have to stop working), today’s workplace environment is often quite the opposite. Instead of one single repetitive task, most of us face a new kind of frustration: the overwhelming abundance of information, options and stimulation.
The increasing complexity of work and the break-neck speed at which business is conducted have permeated all aspects of life. Disruptive events happen more and more frequently, while social and digital transformations open up new opportunities for collaboration and action on an unprecedented scale. We’re living in what the US Army War College calls a VUCA world – Volatile, Uncertain, Complex and Ambiguous.3
In this world, we need new tools to help us make the right choices. We need strategies to solve questions such as the following:
- What career path should I pursue that withstands technological automation and obsolescence?
- How do I make wise financial choices, from buying a house to investing in education?
- How can my company thrive in an environment of ongoing disruption?
- How do I determine the most efficient use of my team’s time and resources?
In these times of high uncertainty and complexity, our natural tendency is to overestimate risks and discount rewards. As a consequence, we dramatically shorten our time horizons and shift our attention to what we can get today, since the longer term seems so fraught with uncertainty, even though the potential rewards may be much greater. Given these tendencies, how do we make informed decisions? How do we prioritise? Little Tramp needed one tool, a wrench, to try to stay on top of his work. Today, we need an entire toolkit to perform successfully.
There is a biological reason for this. Our built-in decision making capacity isn’t adapted to many of the environments we find ourselves in today. The human brain evolved via evolutionary mechanisms over millions of years to perceive and prioritise certain pieces of information, identify relationships and make decisions. Our education and experience teach us methods to enhance these built-in processes in some cases, and overcome them in others. Yet our own common sense, and an ever-growing body of social psychology and decision-science research, shows that we still often go awry. Why? While our evolutionary programming and past experience go a long way towards helping us make good decisions, our professional and personal environments are changing too fast for our education (our software), let alone our brains (our hardware) to keep pace.
Demands on leaders are increasing
This change in context brings with it enhanced requirements for managers and leaders. Competition for jobs has increased due to the globalisation of the workforce. Having a top-notch degree from a prestigious university is no longer sufficient to cement one’s place in society. Rather, it is the ability to be flexible and adapt to changing requirements, keeping a cool head in fast-paced times, and deciding rationally yet emphatically.
Building and maintaining an edge in thinking and decision making is far from easy. It takes commitment, effort and practice. Rigid models and fixed blueprints will soon cease to work because the environment is changing very quickly. Our mental models need to adapt to new contexts and be flexible enough to be tuned and adjusted for individual situations.
In an age of real-time news and information, leaders are not only required to make the right decisions, they also need to make them fast. They will benefit from building a muscle memory of mental frameworks and methods that allow them drastically to shorten the time required to analyse, decide and act on information.
How to read this book
The Decision Maker’s Playbook is not your typical non-fiction book. We will avoid long prose and stories and instead give you a highly visual and intuitive introduction to tactics that we value and use ourselves. To make it easier to read, each chapter (with the exception of Chapters Zero and Thirteen) will follow a similar structure:
- Benefits outline the specific advantages of each mental tactic.
- Checklists provide step-by-step instructions.
- Further examples demonstrate how the mental tactic is used in different circumstances.
- The bottom line summarises the chapter and distils its key insights.
Each chapter is self-contained. That means you can flip through the book and read the chapters you find most intriguing. There is, however, a logical arc to the structure of this book, resembling the way we naturally navigate the world and solve problems – observing, analysing, crafting a solution and executing it:
- Part 1 is about learning how to collect evidence and direct your attention to the most important facts and observations. You will learn to focus on previously overlooked but essential pieces of data and information.
- Part 2 presents mental tactics that connect the dots and establish causal links between facts or events. This includes separating the signal from the noise, and discerning the nature of causal relationships which go beyond mere correlations.
- Part 3 focuses on the tools required to craft a solution to design an approach that will overcome a challenge. This step involves mental tactics that help you think about opening up options, and includes practical decision-making frameworks.
- Part 4 covers mental tactics that will enable you to implement the solution in an effective way, and provide you with techniques to make it happen.
Some important caveats
What are mental tactics? View them as thinking and acting tools. They have a broad range of applicability in your personal life and at work. They are neither one size fits all nor plug and play. The following points are particularly important to keep in mind to maximise the benefit you will get from this book:
- Mental tactics are meant to complement, not to substitute: they enhance the way you already interact with reality, how you make sense of the world, and your personal style of decision making. Mental tactics introduce and share a new perspective and a new set of tools for solving problems, but they aren’t able to completely overhaul your problem-solving approach.
- The list of mental tactics in this book is far from exhaustive: we necessarily had to make a selection when considering which tools to include in this book and which to leave out. That was far from easy, and many useful approaches didn’t make the cut. This book is meant to provide novel and effective approaches, not be the standard reference for any kind of problem. As we were thinking about what to include, we applied the following lenses:
- Proven practicality: you could call both of us professional problem-solvers. We work with companies and governments to find solutions to difficult problems. All of the mental tactics here have helped us solve problems in our daily work. But few of them originated in the corporate world, or are even unique to our line of work. Instead, they are taken from a wide array of domains. Even though other tactics were intellectually intriguing and academically promising, we have refrained from including them here (even though sometimes we really wanted to, for example Bayesian inference). It is meant to be a book by practitioners for practitioners. We want you to apply the mental tactics, not just think about them.
- Generally underrated: we prefer to explore lesser-known mental tactics that we have observed in highly effective thinkers and decision makers (such as thinking on the margin). In addition, we aim to shine a light on those tactics that are intuitively known but rarely used effectively, such as a deep understanding of how to shape incentive systems. Some of the ideas might be familiar to you, but you will find them cast in a new light in this book.
Our goal is to equip you with the right instruments to help you make sound decisions, take action effectively and lead with confidence.