How to Build Your Toolkit of Mental Models

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Mental models help you understand complex problems and make better decisions. They can also limit you: the more successful you become, the more likely you are to overvalue the perspectives and tools that have bolstered your success. There’s no single model that perfectly explains everything in the universe. As Charlie Munger said, “you’ve got to have multiple models—because if you just have one or two that you’re using, the nature of human psychology is such that you’ll torture reality so that it fits your models, or at least you’ll think it does.” (Read the transcript of Munger’s talk A Lesson on Elementary Worldly Wisdom As It Relates To Investment Management & Business to learn how he builds and uses his toolkit of mental models.)

The good news and bad news is there’s a seemingly limitless number of mental models. So how do you decide which ones to add to your toolbox? You start with you. You have a set of core beliefs (working mental models) about how the world works. Many of our core models come from our upbringing, religious affiliation, education, professional training, and work experience. Others come from our significant others, political affiliation, friends, and coworkers. The key to improving your thinking is curiosity—about your conscious and unconscious beliefs, your “go to” mental models, and gaps in your toolkit.

For example, I often use the concept of DNA to explain why it’s difficult for businesses to pivot from one market or business model to another. Businesses are built on a set of core assumptions and ideas. As a company grows, its workforce, processes, products, and messaging all express those founding concepts. If a company has been well run, its core principles are self-perpetuating, like strands of DNA. Pivoting to a new market or business model often requires a company to change its core assumptions and ideas, or sometimes adopt a radically new worldview. Those kinds of changes are hard when they run counter to the genetic code of the existing organization.

Organizational DNA is one of my “go to” models for thinking about business strategy. It’s a helpful lens, but it’s not the only way to understand new business opportunities, or even the best lens in every circumstance. Adopting a relevant model from a different discipline, the concept of diversification from economics for example, would give me a different lens for evaluating business opportunities and strategic planning.

While the number of mental models is limitless, a relatively small number of proven models will enable you to grapple with most problems. Munger, for example, says his toolkit includes 80 to 90 models. Fortunately, quite a few smart, thoughtful people have made a point of compiling and sharing their lists of essential mental models. One of the best is posted on the Farnam Street website. I’ve used their list to create a workbook that you can use to review over 100 useful mental models from a wide range of disciplines. (Links to the workbook follow below.) Use the workbook to track models you’re already familiar with and use, and those you’d like to learn. There’s a section at the end for models you use that aren’t on the list.

Remember that your goal is to build a toolkit that’s useful for you. When you learn a new model, try it out in different situations so you can test its utility. When is it most useful? What did you see through the lens of the model that you weren’t seeing before? When does it distort things, and how? You’ll recall that Munger talks about hanging the models on a “latticework”—an open framework of interconnected supports. Munger’s latticework calls to mind the neural networks that power deep learning systems. Each node on the network has a particular function, and every fresh problem links the functions together in a unique way. Your mental models hang on the latticework of the most powerful network known: your brain. The more models you can connect, the more problems you’ll be able to solve.

Below, you’ll find links to two versions of the mental models workbook, and some of my favorite websites and books on mental models.

Mental Models Workbook

Websites with Useful Lists of Mental Models

Books on Mental Models

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