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Problem Solving

91 SAVED IDEAS

We all fall prey to unforeseen risks, and are blind to them due to three reasons:

  1. The rewards(and potential rewards) obscures one's risk, as demonstrated by gamblers and stock market investors. One remedy is to ask yourself what these rewards are preventing you from seeing.
  2. Loss aversion coupled with our existing sunk costs pushes us towards taking further risk even when it is resulting in losses. One needs to analyse sunk costs on a regular basis.
  3. Future aversion, where we make decisions on the(unpredictable) future using present data. The way to address this is to act without data, understanding how the business landscape changes. It also helps to reframe ‘punishment’ for any misstep as an important learning.

@caleb_e76

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Problem Solving

We can't think faster

You can't force yourself to think faster. If you do, you'll likely make worse decisions.

There is a way to improve the quality of your decisions without resorting to hacks to speed them up.

If you are a knowledge worker, most of your work is trying to make the right decisions using a large amount of information. You need to discern what is the most effective for a desired goal and anticipate potential problems.

You may find yourself wanting to make decisions faster so you can be more productive. But this is a flawed approach.

Everyone is trying to work faster all the time, and they pressure everyone around them to work faster too. Examples include:

  • Loading on extra work.
  • Railing against any apparent waste of time.
  • Expecting superb performance all the time.

However, speeding up often results in poor decisions that create future problems. We can't force ourselves to make faster decisions just because we're faced with an unrealistic deadline.

The rate at which we process information is fixed, Tom DeMarco points out. If you're under pressure, the quality of your decision worsens. You may miss possible angles, won't think ahead, etc.

The clearer you think, the better your decisions will be. This often means you have to slow down and spend more time on your decisions.

Integrating new, better approaches to thinking does not lead to immediate improvements. It takes lots of time and repetition, just like any other skills.

Making good decisions is hard work and needs reduced pressure. It requires constant learning and verifying what you think you know, especially in the fields where the most relevant information has a short half-life. Instead of thinking faster, try to think better.

Becoming a better writer

You can become a better writer by simply becoming more aware of your surroundings.

Writing is mostly strategy. And a big part of writing strategy lies in listening.

It's about how you write. Every person has a different way of expressing themselves. We can all spot which writers are fake and which ones are real. But when we write, we forget about that. We fail to think of someone a bit sceptical.

When you write, you need to be convinced of what you write. Your biggest enemy is not the sceptic, but the reader who calls you out by simply discarding your writing.

Start becoming aware of things that actually matter by listening to your friends, family, spouse, readers, and yourself.

See yourself as a researcher who is studying your particular subject. The better you observe the details of daily life, the better you can explain them.

Ask a question. Then listen to the answer. Repeat the process.

You can do this for an article, book or email. Ask, "What are your thoughts?" Then notice what people are really saying. Ignore the extreme stuff. Listen to the ones who leave balanced responses.

To explore or to exploit

One challenge in life is knowing when to explore new opportunities, and when to focus harder on existing ones. Do we keep learning new ideas, or do we enjoy what we've come to find and love?

In trying to assess if we should explore further or exploit our current opportunities, it's essential to consider how much time we have, how we can best avoid regrets, and what we can learn from failures.

When we consider seizing a day or seizing a lifetime, it is important to understand the interval over which we plan to enjoy them.

Explore when you have the time to use the resulting knowledge, exploit when you're ready to cash in.

Regret is the result of comparing what we did with what would have been the best.

We can minimize regret, especially in exploration, by trying to learn from others. In new territory, we can best prevent regret with optimism because we'll explore enough so that we won't regret any missed opportunity.

Not all of our explorations will lead to something better or be satisfying, but with enough exploration behind us, many of them will.

Failures provide us with useful information that will enable us to make better explore or exploit decisions.

Practical ways to use First Principles Thinking
  • If you’re starting a business, use first principles to build a product or service that’s fundamentally better than the competition.
  • If your day is too busy, first principles thinking could help you get everything done in less time and with less stress.
  • If you’re trying to get healthier, building from the first principles will help you build a routine that works for you rather than struggling with diets and exercises you hate.

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