Many of you have said that you want to learn how to think more clearly. You've also said that you want to learn about framework thinking. Well, the two areas actually intertwine. So in today's video, I'm going to give you an introduction to framework thinking so you can learn how to get clarity of thought, which will enable you to quickly navigate through complex problems and to make better decisions at work. This video is packed full of high level knowledge, so I suggest that you get out a notepad and a pen or open up Obsidian or your favorite note-taking app so you can write down all of the information that I'm going to share with you.
Now let's get started. On a basic level framework thinking is an approach that allows you to organize information into a coherent structure so that you can access the information that you need and so you can connect ideas quickly. I want you to imagine a tree with its trunk and branches.
This is the main structure that holds that tree up. Framework thinking is exactly this. It's the structure in your mind that holds all of your thoughts and your knowledge together and also connects it together as well. Now going a little bit deeper, the power of framework thinking happens when you populate your framework or your thinking structure with mental models.
Mental models are individual frameworks or approaches that focus on a specific topic or help you solve a specific problem. Going back to our analogy about the tree, mental models would be the individual leaves on the tree or the very small branches that are in the tree. These leaves or mental models have an individual purpose, but they are connected through the greater tree structure.
And when you really want to level up your thinking, you leverage those individual mental models that you have stored in your thinking framework. You connect them and you use them either individually or collectively. And this is what allows you to think more clearly and to more easily analyze and understand the problem that you're facing. Charlie Munger, the successful investor and business person, is someone who famously uses mental models. He apparently said that he's not smart.
He just has more mental models in his toolbox. He apparently has 80 plus mental models that he uses. And big consulting firms are known to use mental models as well, which form part of their competitive advantage. Now, surprisingly, these mental models are available publicly online.
So I've included a link in the description below where you can go and check them out. And later on in this video, I will be talking about a few of them in more detail. But first, I think it's really important to look at why framework thinking and why mental models are important for leaders.
The biggest advantage is that they help you bring clarity to situations. So instead of operating in chaos and disorganized thoughts with information coming at you from all different directions, when you use the right mental models, it helps you to focus your thinking and to focus your questions on the areas that matter. And not only your focus, but also the focus of the people in your team, which is super helpful when you are trying to solve a problem or when you're trying to think critically about something. So here, mental models will help to align your thinking and to focus your thinking and prevent you from being distracted, which in turn helps you solve the problem faster and more effectively. And you as a framework thinker, you become known as the person who helped achieve all of this.
which helps to win you points with your peers, with your boss, and also with other hiring organizations. The benefits in a way compound on one another and if you are smart about how you manage this you can absolutely leverage it to boost your executive presence and also your career potential. I will be talking about how you can do that later on in this video. Now let's look at some common mental models and you might be surprised that you're already familiar with some of them. The SWOT analysis is one mental model where you look at the strengths, the weaknesses, opportunities and threats of an idea or a business opportunity.
The four P's which marketing students would be familiar with. This is where you look at the product, the price, the place and the promotion to help you develop your marketing strategies. The law of supply and demand, which is an economic model of price determination in the market. opportunity cost which is the potential benefit that a person or a business gives up when they choose one option over another and the null hypothesis which is where you shouldn't make a decision until you have all of the available information so these five examples are all mental models and like i said you've probably heard of some of them before now if you have used one of them or more than one of them at some stage in your life or in your professional life you Let me know in the comments below, because I know myself, I have used all of them at one stage or another.
Now, the thing with mental models is that it is much better to have a number of them at your disposal rather than just one or two of them, because the power of framework thinking comes when you combine mental models when you start to connect them when you identify relationships or patterns between mental models because this helps you to generate new insights basically the more mental models you have the more perspectives you are able to generate and the better able you are to solve problems this is why charlie manga has 80 plus mental models at his disposal he refers to this as his lattice work of mental models you You can think of it as a framework of mental models, and one could wonder whether this has contributed to his success in business. I think at this point in the video, we need to bring in an example. It's been pretty abstract so far learning about framework thinking and mental models. So I want to link it back to your purpose, which is to improve your leadership capability. I've already said that framework thinking can help you get clarity of thought.
It can help you make better decisions. It can help you solve problems faster. So let's look at a common issue that leaders face pretty much every day, which is how to prioritize your to-do list.
For this, I'm going to use the mental model, the Eisenhower matrix, which is a task management tool that will help you prioritize your tasks based on urgency and importance. The idea of the Eisenhower matrix first came about by Dwight D. Matrix, the 34th president of the United States, but it was further developed by Stephen Convoy, the author of Seven Habits of Highly Effective People, which is a fantastic book, by the way, if you have not read it. There are four quadrants to the Eisenhower Matrix based on whether the task you are looking at is urgent, not urgent, important or not important.
Quadrant one is for tasks that you should do. These are tasks that are urgent and important. There are tasks that are critical. They should be on top of your to-do list because they have deadlines or they have consequences if they're not done. Quadrant two is for tasks that you should schedule.
These are tasks that are important but they're not urgent. There are tasks that are important for the long-term goals but not urgent enough so they don't need to be done straight away. Quadrant three is for tasks that you should delegate.
So tasks that are urgent but they're not important for you to do. These can be delegated to other people because they don't require your specific skill set. And quadrant four is for tasks that you should delete. This is for tasks that are not urgent and not important.
These tasks are a distraction. They are a waste of your time and they need to be eliminated so you can be more productive. Now, as you go through your to-do list, you can use this mental model to get an idea of what tasks should be put in each quadrant. For example.
Notifying a client of a new meeting location for tomorrow is something that is urgent but is not important for you to do so you should delegate this task to someone else. Finalizing the client report for tomorrow morning is something that is both urgent and important so you need to get onto it straight away. Whereas starting a new client proposal is important but it is not urgent because the meeting isn't until next week so you can schedule this for a later time.
And following up on whether your assistant notified that client about the change of meeting location for tomorrow is something that is not urgent and not important if you can rely on your assistant. So you shouldn't need to follow up or to do this task at all. So using this mental model, the Eisenhower matrix, it has enabled you to solve the problem of what tasks should you prioritize in your to-do list. This might not have been clear to you in the beginning, but after using this mental model, it should have enabled you to clearly identify and to decide on what tasks are important for you to work on right now.
Another mental model that I want to introduce you to is called second order thinking. Now, I really like this mental model, and it's something that I'm definitely going to try to include in my work in the future. Second order of thinking is where you map out the possible ripple effects or long-term effects of a decision, both positive and not so positive. This enables you to understand whether the decision you are going to make is a good one. As you know, leaders make many decisions.
Some are big decisions, some are small decisions. Using a mental model like this, it helps you to make the process a lot easier. It also helps you to get buy-in. from other people who are involved in that decision making process.
And it also helps you to reduce the risks as well. The second order thinking mental model commonly uses an if-then prediction of what happens after a decision is implemented. And it also looks at the first order consequences as well as the second order consequences and sometimes the third order consequences as well. Now, when I say first order consequences, what I mean by that are the direct consequences that happen. After a decision has been implemented, these could be good consequences or bad consequences.
Now, second order consequences. are the good or bad consequences that can happen as a result of the first order consequences. For example, let's say you are a C-suite executive and you're deciding on whether you should invest in expensive leadership training for your team. Now you would start with the if-then statement, which would be, if you invest in leadership training, then what would happen? The first order consequence of investing in this training, the good consequence would be that you're management team or your leadership team would be better trained.
The bad first order consequence would be you would have less money in your budget. Now the second order consequences, the good consequence would be that your team are able to delegate better and they work together more effectively. The bad consequence would be that because you have less money in your budget, you are not able to take your staff on their yearly team training weekend.
For the third order, consequences. The good consequence would be that because your team are more productive, they can earn more revenue, which you can then reinvest back into the company. The bad consequence would be because you can't take your staff on their yearly team training weekend, they're unhappy and they leave for another company.
From this point, your job as a leader is to look at this map. that you've created to look at all the consequences that you have identified and to then decide whether you should be investing in this expensive leadership training for your team or not. So can you see how using this mental model allows you to think deeper? It allows you to think beyond what you normally would and identify consequences that you probably would have never thought of. Essentially, it allows you to get clarity on the decision that you are trying to make.
Basically, what you're doing with this second order thinking mental model is that you're anticipating the long term consequences of that decision. In simple terms, you are thinking things through, which can be exhausting. It can be scary.
It can be demotivating sometimes as well, because you don't really know whether any of these consequences are going to happen. It also takes time and it takes energy to think through all of these possible consequences that could happen from that decision. Not many people are prepared to do this and that's why they tend to stay in first order thinking only. But in order for you to make the best decision, a smart leader would look at all of the possible consequences before making that decision and not looking at the second or at the third order consequences is often the cause of a lot of painful and bad decisions in business.
So we've looked at what is framework thinking, the benefits of it. and common mental models that you can use in your mental framework, as well as examples that you can draw from. I want to take this one step further because the power of framework thinking comes not only when you use it in your job like what we've spoken about so far in this video, but also when you share it with other people in a visible way. Let's say you're in a meeting with other people at work and the group is trying to decide whether to invest in expensive leadership training for your team. So the same example we talked about before.
Now, because you are familiar with the mental model of second order thinking, you realize in the meeting that this could help all of you to make a better and to make the right decision. So you mentioned to your team that you've come across this framework. You don't even have to describe it as a framework.
Actually, you can even describe it as a series of steps or an activity that you can all perform. But you mentioned that you are aware of this. and that you think if you all use it, it will help you come to a better decision. So you share the framework with the people in your team. You go through all of the steps for a second order thinking.
You get everyone's input. You get everybody asking questions. Everybody is discussing the consequences of this decision, the variety of consequences that could happen. And in the end, you all come to a possible solution or you identify the best decision that you could make.
After the meeting, you type up a summary of what happened during that meeting, what everyone talked about, the activity that everybody did together. You share it with other people in your team via Google Docs or whatever software that you are using. You can even take it one step further and create a keynote presentation on the meeting, on the activity. that you did and on the decision that you all came to. The important thing here is that you share this document.
You share this document with the other people who were involved in that meeting and also your boss. Because your boss sees this, they might recognize the value that you have brought to that meeting and the value you have brought to that decision or to the meeting. the problem that you were facing and they will probably identify that you have a unique ability to get clarity in complex problems. Your boss might want to share this document that you have created with their peers with other executives in the company. They may even invite you to conduct a lunch and learn so that you can teach it to other departments or to other groups in the company as well.
Eventually this activity or this mental model could become a commonly used decision-making tool you for the entire company. And just like that, by bringing in this mental model into your meeting, to share it with your team, to share it with your boss, you become known as a thought leader in your team and also in your company too. And as someone who has exceptional leadership potential. Because at the end of the day, these are the skills that executives will be looking for in future leaders.
They'll be looking for people who have the ability to think outside the box, the ability to bring clarity to complex situations, and the ability to communicate all of this in a simple way so that everybody can understand. If you want to start learning about mental models, if you want to start researching them and gathering information about all the different mental models that there are for your own framework thinking. then I highly recommend that you develop a structured approach to your note taking and to your researching here. And I recommend this video up here because in here I share my system that I use for highlighting and for note taking, which has been instrumental to my knowledge building.
Thank you so much for watching. If you are a new channel member, thank you for joining my channel membership. I am delighted to have you with us. And for the rest of you, thank you for watching this video. I will be back next week with another video.