Shane Parrish offers expert perspectives and tips for boosting your decision-making.
You’ll Learn:
- Why we often fail to improve at decision-making
- Three useful mental models to serve you well
- The role of emotions in decision-making
About Shane
Shane Parrish invests in wonderful companies as a Partner at Syrus Partners. He’s also the mastermind behind the Farnam Street blog and The Knowledge Project podcast. Farnam Street blog is devoted to helping people develop an understanding of how the world really works, make better decisions, and live a better life. It focuses on sharing the principles that help others become better versions of themselves and live consciously.
Items Mentioned in this Show:
- Sponsored Message: Improve your skills with the Great Courses plus
- Shane’s blog: Farnam Street
- Shane’s podcast: The Knowledge Project
- Book: Filters Against Folly: How To Survive Despite Economists, Ecologists, and the Merely Eloquent by Garrett Hardin
- Book: Meditations: A New Translation by Marcus Aurelius
Shane Parrish Interview Transcript
Pete Mockaitis
Shane, thanks so much for joining us here on the How to be Awesome at Your Job podcast.
Shane Parrish
Thanks Pete. Glad to be here.
Pete Mockaitis
Boy, I think there’s so much cool stuff that we can dig into together. I want to maybe just start, maybe this is a quick and easy question because the answer might be no comment, but are you at liberty to reveal anything cool you were working on for Canada’s Communications Security Establishment with the cyber defense initiative thingies?
Shane Parrish
Wouldn’t it be so awesome if I was allowed to say what I actually did or the impact that we had, but no, unfortunately, I can’t. I’m not at liberty to say that because I don’t want to end up in jail.
Pete Mockaitis
Fair enough.
Shane Parrish
I think is just the reality of the situation. Or we could pretend, like I could do a nice segue and then I’d just stop talking and you’d be like, “Oh, we had to cut that out for the safety of the listener. We didn’t want to put you in jeopardy.”
Pete Mockaitis
That’s good. That’s good. I’m just going to assume for your street cred and for my own fun imagination that it was like game-changing, life-saving, intense hacker excitement movie stuff.
Shane Parrish
Hey man, I cannot confirm or deny any excitement that happens inside the government.
Pete Mockaitis
Well, maybe one that’s more acceptable for public consumption is let’s hear a little bit about your enthusiasm for Charlie Munger, Warren Buffet’s partner there, and the story behind the name of your blog, Farnam Street.
Shane Parrish
Yeah. I went back and did my MBA in, I think it was 2008. I realized that we were learning just from the textbook. This is how sort of Farnam Street started. Bear with me here for a second.
Pete Mockaitis
Sure.
Shane Parrish
As we go through this. I was sitting in strategy classes. About three weeks in we’re doing this case study, some Eastern European airline and what the owner should do and what they shouldn’t do. I just thought a) the audacity of us sitting in a classroom deciding what the owner should or shouldn’t do, but it was very clear to me that they wanted an answer and the answer corresponded to the chapter that we read in the textbook. They didn’t really want the outside thinking that was going on.
All these other groups got up and said, “Oh, become the low-cost provider,” because that was the strategy that we were reading about that week. Our group got up there and we’re like, “We didn’t think we could actually become the low-cost provider because of X, Y and Z.”
The teacher at the time, the professor I guess, just said, “You didn’t do the work.” Our group leader, who wasn’t me, stood up and was like, “We did the work. You can’t put it on a PowerPoint and all of the sudden you magically become the low-cost provider. You actually have to think through like how do you become the lost-cost provider. Are those reasonable options or are they not?”
He started working through all this thing. It was this really interesting back and forth. He ended up quitting, leaving the MBA program.
Pete Mockaitis
Is he a dot com billionaire now? Just got to know.
Shane Parrish
No. He was super successful to begin with. He went back to running his super successful business. But he quit on the spot in the middle of the argument with the professor.
Pete Mockaitis
Wow.
Shane Parrish
He’s like, “If this is the education I’m getting, I might as well just go home,” and he left and never came back. You hear those stories and you’re like I actually know somebody who did that.
But as he was leaving, he packed up his bags and he was waiting in the cafeteria for a taxi and I ran into him. I was like, “You know what really struck me as odd? None of that seemed foreign to me. But how did we take such a different approach to this problem than everybody else seemed to take?” He mentioned Charlie Munger.
I had heard of Munger before I think probably back in ’97 or ’98 when I was in high school. But I hadn’t really thought about it. I went back to my dorm room that night and instead of doing my homework I looked up this Charlie Munger and started reading all about him and Warren Buffet.
I was like oh my God, this is way better, way more interesting than my textbook. It seems real in a way that my textbook couldn’t be because it wasn’t trying to distill the world into one simple thing. It was like it’s complex and you need to understand a whole bunch of basic concepts and latticework them together. Then you might have an idea or a better understanding of how the world worked.
That very night I created a blog, which was called 68131.blogger.com, which is-
Pete Mockaitis
Catchy.
Shane Parrish
-the zip code for Berkshire Hathaway.
Pete Mockaitis
There you go.
Shane Parrish
68131, the US zip code for Berkshire Hathaway headquarters in Omaha, Nebraska on Farnam Street. We don’t own that domain anymore, but that was the original sort of incarnation of Farnam Street.
The reason I used 68131 was because I didn’t think anyone would type in 5 digits. At the time URLs were words or sayings or whatever, but nobody would type in this. I didn’t want to password protect it. It was completely anonymous because here I am working for an intelligence agency writing a blog that’s sort of public. It would be even more weird if it was private. I just five numbers, five digits.
Then started connecting what I was learning, so started just keeping a list of the things that I was learning and the things that I was connecting. I found I wasn’t doing homework anymore; I was just doing this. I was diving in head over heels into Berkshire Hathaway, reading annual letters.
There’s a saying sort of that goes around the internet and people who are in the know with Buffet and Munger sort of, which is if you read the annual letters to Berkshire Hathaway, it’s better than an MBA. I think in my personal experience, I learned a lot more reading those letters than I did sort of going through my MBA. I learned a lot more about business. I learned a lot more about technology. I learned a lot more about ethics.
I thought it was a really sort of valuable way to spend my time. My grades didn’t decline interestingly as I spent less time on school because the formula for what the teachers wanted was pretty clear.
Pete Mockaitis
Intriguing. Then that’s a really cool story. I think it’s funny that you were initially trying to be kind of discreet and blown up to have like a million pages a month.
Shane Parrish
This is so weird. Fast-forward five years and there’s like people trying to figure out who’s behind this anonymous blog. We have not that many readers at the time. I was like, oh my God, this is becoming a thing. If they uncover that it’s me or something, it’s going to look super weird, so I put my name on it in 2013. I think that was the year where we changed the domain to FarnamStreetBlog.com.
Now it’s FS.blog, so it’s super easy to type in. We realized that a lot of people over the world spell Farnam a lot differently, so it’s just FS.blog now.
Pete Mockaitis
Yeah, that’s smart.
Shane Parrish
Now we have like 200,000 sort of weekly subscribers to our email. I don’t know how it happened because we didn’t advertise anything at all. It’s all been word of mouth.
Pete Mockaitis
That’s cool. That’s cool. Well, you’ve got some really high-quality stuff there. It’s almost dangerous how engaging and interesting and just I want to be there for hours of time.
Shane Parrish
I appreciate it. We get a lot of emails going like, “I just killed a weekend on your website.”
Pete Mockaitis
Well, better there than Netflix I guess.
Shane Parrish
It’s like a rabbit hole. It’s like, “Oh my God, why haven’t I found you ten years ago?”
Pete Mockaitis
Yeah. Well, it’s great stuff. How would you in short form articulate what are you all about over there at Farnam Street and the podcast, The Knowledge Project?
Shane Parrish
Just using timeless knowledge to sort of create better humans, like how do we improve our self in a non-self-helpy sort of way. We want to make better decisions, but we also want to live a more meaningful life. Why do we have to be bound into one of those categories? How do we create a better version of ourselves every day?
What do we need to learn to think about problems differently? How do we need to reflect on our life to live a more meaningful, deliberate and conscious life? And how do we develop better relationships with people, not only with others and our spouses and our family and our kids, but with ourselves? What do conversations with yourself look like? How do we be more positive in the way that we talk to our self? How do you put that under one umbrella? You can’t really, so we just call it Farnam Street.
Pete Mockaitis
That’s good. I’m resonating and vibing totally with what you’re saying, timeless knowledge, a better version of yourself. We totally have healthy overlap. We’ve had overlap with the guests too, Annie Duke, Chris Voss, etcetera. I’m digging it.
I really want to dig deep into decision making because that is a shared passion area for us. I think we can cover some goodies. I’d love if you could maybe start broad and general and get real precise and tactical. In your observation of the human condition, where do you find that most people, most often end up making mistakes when it comes to their decision making?
Shane Parrish
They’re subconsciously making mistakes. We just have this view of the world that we think is correct. If other people disagree with us, well, they must be wrong because if they’re right, then that means we’re incorrect. Our ego sort of kicks in at a subconscious level.
It doesn’t want us to be wrong; it wants to protect us because being wrong is labor intensive for your brain. You have to think through why you were wrong and what you were wrong about. You have to update your views. All of that sounds like a lot of work, so your brain, “Eh, we really don’t want to do that.”
I think how do we get to that point is a very interesting sort of way that we make incorrect decisions. If you think about it, we start school very young and we go through. We learn a wide variety of things from art and music and science and math to literature and humanities.
Increasingly as we get older, we narrow that. High school becomes a little bit more focused and then university or college becomes a lot more focused. Then you get out in the workforce and it’s increasingly narrowing, narrowing, narrowing.
Usually when you’re a junior person in an organization you don’t get to make too many decisions that are outside of your specialty. But you pass three or four years, you get a promotion or two and all of the sudden, you find yourself maybe your mid-20s, late 20s, early 30s, whatever range that is, you’re doing a job that you weren’t really hired for, that has less to do with your specialty than you ever sort of would have imagined when you were doing college or university.
You’re required to make decisions, but you view the world through this lens of your specialty because that’s all you’ve ever known. Life is busy. You have family. You have kids. It’s really hard to develop sort of a multi-disciplinary education yourself. You don’t even know that you’re missing it.
When you’re thinking about problems, when you’re seeing problems, you just frame it so narrowly. You think about it so myopically through your one lens that you can’t see the world through other people’s views. You’re only using one lens, so you’re not really getting a firm view of reality. You’re getting your view of reality through your eyes, but not necessarily through a more accurate view of what’s actually happening, which would require a whole bunch of different perspectives.
I think that that’s probably the leading cause of how we sort of trick ourselves because we’re only looking at it through our lens. We’re not looking at it through a more holistic lens or, if you want, a toolbox of lenses, where we can just pull them out, look at the problem this way and be like, “Oh, that applies. That doesn’t apply.” Then we start to see a lot better in terms of what’s happening.
The other sort of prime reason I think we make sort of suboptimal decisions is just timeline. We’re super busy. We’re super stressed. There’s a lot of anxiety in the world. There’s a lot of stuff going on in the world. We sort of just want to solve something. We don’t want to think about it again. We sort of want to turn off our brain. Our brain wants to optimize for energy conservation.
We’re full of stress. We’re full of anxiety. The day is long. We’ve got a lot of stuff to do. Then we find something that just solves the immediate problem and we latch onto it. Oh, we can finally relax. Our brain is like, “Great. We solved the problem. Next.” We don’t think through like what other problems did that create? What’s that going to look like in ten months, ten weeks, ten years? What other problems is that going to create?
We know that when we’re inside an organization because that’s when somebody’s ramming a solution down your throat that’s going to solve the immediate problem, but create a host of other problems. Sometimes those problems are less than the problem we’re solving, but often the problems that that comes with are even more.
Then you think about how the stories that we get promoted in organizations, like the stories that we tell not only ourselves, but we tell others. It’s like, “Oh, I solved this problem,” but you never talk about the problems that you avoided. You never talk about the problems that you created when you solved that problem. I think it’s just a very narrow sort of view of how we view ourselves and how we protect ourselves and sort of the timelines that we use when we make decisions.
Pete Mockaitis
That’s just a powerful question right there that I haven’t really chewed on much, which is “Okay, how does this solution creating other problems and am I okay with that? Are those better problems?”
I’m thinking, when you talk about the short-term solutions, it’s so funny. Recently I found myself like I just have a messy desk or drawer or surface. I’m just like, “I’m tired of this mess,” so I put a lot of the things in trash or in storage containers elsewhere that I just put them elsewhere. It’s just like, “Am I really better off?” Another day will come where I need that thing and I’m going to have to go and dig it out.
Shane Parrish
Yeah. Although, alternatively if you don’t use it for the next year, you know you could probably get rid of it.
Pete Mockaitis
Totally. Yeah.
Shane Parrish
But often, that’s what we’re doing, right? We’re solving – we call this second order thinking, which is sort of like you’re solving the first problem, but you’re creating a host of other problems at the second, third or fourth layer. I think you just want to start thinking at a deeper level where you can sort of see if I do this – there’s a ecologist called Garrett Hardin, who interestingly enough, his research was sponsored by Charlie Monger.
He wrote a book called Filters Against Folly. One of the things that he mentioned in that is the three laws of ecology was just to ask yourself “And then what?” You can never do merely one thing. Just remember that. You can’t do anything in and of itself. There’s always a consequence or a repercussion or an impact or however you want to think of that terminology.
He used to ask himself “And then what?” If you’re in a meeting and you’re thinking – that is the only question that you need to think about to change your timescales a little bit. It’s three words. It’s super powerful and it has the ability to change the conversation in the room.
Pete Mockaitis
I love that question. I’ve heard of it more so in the context of avoiding temptations. It’s like, “Oh my gosh, I want to eat that whole tub of ice cream.” “And then what?” It’s like, “Yeah, you’re right. I’ll feel terrible and be fat. I’m not going to do that,” so problem avoided proactively.
Shane Parrish
Ice cream though is so good, so tempting.
Pete Mockaitis
Well, I’d love it if maybe you could sort of make this all the more real if you could share maybe an instance or a favorite example you have in terms of, “Hey, we solved a problem and then we created some bigger problems.” Do you have sort of a poster child example of this?
Shane Parrish
Well, here’s a business example that may seem a little bit esoteric, but everybody might resonate with.
We used to have a pop-up box on the website. We used to have a pop-up box for everybody who showed up and it would show up every time you showed up. The first sort of consequence of that is we had a ton more email subscribers to Farnam Street. We were getting exactly – first order we were getting the metrics we wanted. We were adding 4,000 people a day or something. It was crazy.
The second order consequence of that is it drove up our cost because we pay per person on the email list. Then we started looking at the numbers and the open rate, the click-through rate, the engagement of those people was way lower quality than if we added a little bit of friction to sign up for our email list.
Maximizing for one variable, create a host of other problems. Now we have a problem where we have low reader engagement. We’re having that because we didn’t think through sort of the second-order consequence.
Or an example that probably resonates more with people is “I’m hungry.” “Well, eat a chocolate bar.” But if I eat a chocolate bar over and over again every time I’m hungry, I’m going to end up fat, out of shape. It’s going to have a whole bunch of health consequences. It’s going to have relationship consequences. It’s going to have consequences about how I talk to myself. That’s just ways that we can sort of think through. And then what?
Pete Mockaitis
Okay, cool. I want to hit now the multi-disciplinary multiple lens view of things. I imagine there are an infinite potential number of ways you might segment the types or names of lenses out there. But I’d love it if you could maybe give us perhaps just a few different or contrasting or varied lenses that are very unlike each other and very useful when you start looking through things through each of these lenses successfully.
Shane Parrish
Right. We call lenses – the terminology that we sort of use on the website is mental models. They are sort of how we think and how we understand the world. They shape what we think is relevant in a given situation and what we think is irrelevant. We’re using them all the time, whether we’re conscious about them or not is a different story. These mental models or lenses are how you simplify complexity.
Mental models are really – or the lens – is just a representation of how something works or how something looks through somebody else’s eyes. You can think of this, if you want to think about a lens, we can think of the psychological term perspective taking.
If you’re sitting in a meeting and there’s five people around the table and they’re all from different parts of the organization, one way to look at the problem through a different lens is to mentally take the perspective of each person in that room and sit in their seat. What does the problem look like from their perspective? What do they care about? What are they optimizing for?
That gives you a different lens. That’s a very powerful lens if you think about it. It doesn’t come from any sort of discipline. It’s just putting yourself in somebody else’s shoes.
Some of the ideas that we use as mental models or lenses into seeing a problem or thinking better, so there’s different ways to see the problem and then there’s different ways to think through the problem or think about the problem or how you see the problem.
“The map is not the territory” is a great example of a lens that we can use that will add clarity to a situation or insight to a situation. The map is not the territory a map is not reality. Even the best map that we have, even the most detailed map that you can sort of find is imperfect. It’s a reduction of something else.
If it were to represent with sort of like perfect fidelity what it was trying to represent, it wouldn’t be a reduction. It wouldn’t be useful. We need to reduce these things to keep them in our head. They can also be sort of snapshots or points in time. They don’t tell the whole story. They could tell us something that existed before, but doesn’t necessarily exist today.
If you think of a business context, you can think of an income statement as a map, a balance sheet as a map, a strategic plan as a map. It’s useful and it helps us, but it doesn’t necessarily tell us what’s really going on. Do people believe in the strategic plan? Well, that’s part of the terrain. Are all parts of the organization working towards it in harmony, in lockstep? Well, that’s part of the terrain too. But if we just look at the map, we don’t see that.
Pete Mockaitis
I’d love some additional examples of maps there. That was the first thing that came to mind for me was financial statements. What are some other maps that are sort of simplifications or representations of territory that we look at often?
Shane Parrish
Well, think of dashboards, how a lot of people run organizations. They run on this sort of green, yellow, red dashboard. That becomes a map. If everything’s green, you think everything is okay, but it doesn’t actually tell you how people are feeling. It doesn’t tell you sort of how engaged people are. It doesn’t tell you if you’re working towards the right goals. It just tells you that here’s what the map looks like. It doesn’t tell you if the environment has changed.
I think once you start to see things through a map territory problem, it becomes really interesting to think about. Where we’re reducing things to deal with them in our head, but it doesn’t tell us what’s really going on.
Email is another example. You might have 32, which is what I have right now in my inbox, 32 emails.
Pete Mockaitis
Not bad.
Shane Parrish
Like, oh my God, that’s not bad at all, but it doesn’t tell you what those emails are actually about or how much work they are. If we assume that each email – we naturally have this map of what an email sort of takes or looks like. Maybe it’s five minutes to respond to, so you’re like, “Oh, he could be done that in a day at most.”
But those 32 emails in my inbox are there because I’ve procrastinated on them or they might take hours and hours to respond to or they might be projects that have been ongoing that I owe something significant to. That number, that heuristic is just a map about how things are and how they look. We instantly infer that map through our own lens.
Another sort of example of a different type of mental model that we might think about for math is multiplying by zero. We all learn this in, I don’t know, grade three. Any reasonably educated person knows that if you multiply something by zero, no matter how large the number is, it goes to zero. But it’s true in human systems, too.
If you think about trust, you violate somebody’s trust, you go to zero. If you think about value proposition in a business, you can think about it as additive or multiplicative. You go to a restaurant and you have really good food. That’s really additive. If the food is terrible though, it becomes multiplied by zero. Or you go to the bathroom and it’s dirty, you’re never going to go back.
There’s certain things that can happen that you never want to happen if you’re a business owner. There’s certain propositions in your value chain that will just cause people to never come back. Those are multiplied by zero.
If you think about it, it’s a really interesting lens where you just go back to zero with that customer. If you think about the world today, people share that information with other people. It’s not even going to go back to zero, it’s like they’re going to tell other people, so it’s sort of like a really negative thing.
Pete Mockaitis
All right. I’m digging this. We got multiply by zero, the map is not the territory.
Shane Parrish
Sure. What about chaos dynamics, which is another one that we sort of talk about on the website, which is sensitivity to sort of initial conditions. In our world, small changes and initial conditions can have massive sort of downstream effects. This is the sort of proverbial sort of Butterfly Effect, where a butterfly in Brazil flapping its wings can cause a hurricane somewhere else.
We think about that as something that’s like, “Oh, that’s a great story,” but we don’t think of it in terms of how we live, which is how do we always have this baseline where we can accommodate multiple conditions?
One of the ways that small changes to initial conditions can cause catastrophic loss are mortgage rates increasing. If you’re tight on the finances or you’re over levered on your house, a small change in interest rates can cause you to go back to zero. That’s just an example of sort of how we can think about that. But it’s a way that people don’t necessarily think about problems.
These are lenses or tools that you put in your toolbox and then you walk through a problem and you sort of look at it through these lenses. If you look at it through all of these lenses, it’s sort of like layering tracing paper one on top of each other and each part has a different part of the end image, but when you layer them all on top of each other, you can see the whole thing.
Pete Mockaitis
That is a cool picture. As you visualize this in your mind’s eye, is there a particular picture that your layers of tracing paper are making?
Shane Parrish
Well, I was thinking actually like the way that I normally phrase it is, it’s walking around a problem in a three-dimensional way. You have a situation or a problem or a challenge or a struggle and to understand it, you sort of have to walk around it in a three-dimensional way. Another way to phrase that was tracing paper. I sort of got lost in this whole like oh, I’m explaining this in a different way than I’m normally explaining this.
Pete Mockaitis
I really liked it. I was visualizing an image of pandas, for the record, if anyone cares.
Shane Parrish
Well, you can think of – there’s the elephant story, right, where there’s these seven blind men. I think it’s seven. But they all each put their hand on a different part of the elephant. They don’t know it’s an elephant. They just, “Oh, this is like a stool leg,” and “This is,” whatever. They don’t actually put together that it’s an elephant. What you want to be able to do is step out of … and see the elephant.
That brings us to maybe the biggest sort of mental model of them all, which is Galilean Relativity. You can think of it as physics. We all learn this. I think at some point, we’ve all learned this. If I ask you “How fast are we moving right now?” You’d probably say zero, right? I’m sitting in my chair at my desk. I’m not moving at all.
Pete Mockaitis
Yeah.
Shane Parrish
But we’re moving at what? 20,000 miles an hour around the sun.
Pete Mockaitis
Yeah.
Shane Parrish
Right. You don’t feel it. The reason you don’t feel it is because you are in this system and you only see yourself in the system that you’re immediately around.
The way that I learned it in physics, the way that I assume everybody learned this in physics, but maybe that’s not the case, is you’re on a train with a ball. You’re holding it. You’re standing in the middle of the aisle. The train’s moving at 60 miles an hour. How fast is the ball moving? Well, relative to you, the ball’s not moving to you. But relative to somebody watching the train go by, it’s moving at 60 miles an hour.
How do we step outside of our system, almost like seeing yourself as an actor, how do we take ourselves out of the situation so that we can see the situation more accurately than what it actually is?
Pete Mockaitis
I actually like that notion of being an actor because I’ve found that if I actually really – I guess it’s just perspective taking – but I step into the roles of different folks, like “Okay, how would-“ you just fill in the blank. It doesn’t matter. How would Beyoncé, how would my uncle, how would my wife think about this, approach this? What would she be concerned about? Suddenly new ideas come to light, like, “Oh, that’s brilliant,” just because I decided to be someone else in my brain for a little bit.
Shane Parrish
Yeah. I think if you think about perspective taking, that’s stepping outside of your system, if you think about how do you improve your relationships with anybody else, just step outside of yourself and see the world through their eyes. It will change the vocabulary. It will change the questions you ask. It will change what you want to talk about.
It will have an exponential impact on not only your relationship with other people, but your problems will seemingly become a lot smaller. You’ll have more free time and you’ll have less anxiety.
Pete Mockaitis
I’m sold.
Shane Parrish
Yes.
Pete Mockaitis
That’s a good combo.
Shane Parrish
And it’s free. Wait, I’ve got to bottle this stuff and sell for it like 10,000 bucks or something.
Pete Mockaitis
Well, you’ve got a decision journal and a thinking cap, which I thought were pretty cool products to offer on your blog. I’d like to hear a little bit about the decision journal and how one can go about improving their decision-making skills day after day in the course of living life.
Shane Parrish
Well, we all make a lot of decisions and those decisions have an impact over time. But we rarely sort of reflect in life. We rarely reflect on relationship decisions. We rarely sort of reflect on decisions we make at work, to invest money, to not invest money, to do a product line, to not. We convince ourselves that we’re right. By not reflecting, we limit the learning capacity that we have. We limit the learning opportunity that we have in those situations.
We have a thinking cap. We give it away to all of our Learning Community members for free. We just send them an email saying, “Hey, you won a free hat. Thank you for supporting us.” But it’s really symbolic. It’s symbolic of the approach that we want to take to not only living life, but to making better decisions and just being a really awesome person, which is how do we cue people to reflect more often.
I personally think the world would be a much better place if we reflect a little more. But reflection is really the key to learning. When you think about how organizations sort of go through the process of learning from mistakes or how we go through learning from the mistakes of others, it’s not normally about reflection. It’s normally about give me your lessons learned.
Lessons learned aren’t necessarily reflections. Lessons learned are the result of reflections, but we really want to know what questions people are asking themselves. How are they learning to think better? Are they beginning to see their weaknesses? Do they make the same mistakes over and over? What sort of feedback – this is where a decision journal comes in – what sort of feedback are they giving themselves?
A lot of people don’t want to talk through their decisions at a really raw and vulnerable level with other people for a variety of reasons and I get it, but you can do it with yourself. You don’t need other people. The way that you do it with yourself is you have a decision journal. If you Google decision journal, I think we’re the number one sort of hit. We’ve offered a template online. We’ve worked with Special Forces around the world.
We’re developing the second sort of version of our decision journal right now. We created this sort of alpha product, if you will, if you want to think in software terms about what does a basic decision journal look like. Will people use it? How do they use it, which is the most important feedback we can get.
Now we’re incorporating – we’ve had that out there for about seven – eight months and now we’re incorporating the feedback and we’re coming up with sort of like the next version of the decision journal.
But really, that’s what it is. You’re just thinking through problems at a different level and you’re trying to give yourself clear, unambiguous feedback. You don’t want to be able to convince yourself that you were right when you were wrong.
I think that so often we trick ourselves later or the data is not clear or we think we should have done something we didn’t do or we didn’t do something that we should have done. But unless we wrote it down at the time, we don’t remember what information we actually had, what information we considered relevant when we were making the decision.
How are we expected to get better when we know that our mind is going to trick us? What are we predicting is going to happen? What decision are we making? What …. That would be the very essence of the decision journal, but we want to get a little more specific than that. What variables do you consider relevant in this situation?
Then when you evaluate your decision six months later in the privacy of sort of protecting your ego, you can start to cue, “Oh man, you know what happened? I was right, but I was right for the wrong reasons.” That’s a very powerful realization because it allows you to learn.
Pete Mockaitis
I think one of the coolest things that I dug about the decision journal in perusing is the mental/physical state checkboxes. I’m energized. I’m relaxed. I’m angry. I’m anxious. Can you talk a little bit about the role of your emotional/physical states in thinking and decision making? Is there an optimal state for different kinds of decisions or how do you think through that?
Shane Parrish
Just think about it like when’s the last time you made a super amazing decision when you were angry?
Pete Mockaitis
I told them off and it was awesome.
Shane Parrish
Yeah. Well, you feel good in the moment, but then you’re like, “Oh my God, what am I – that’s not me. That’s not who I am.” That’s the common sort of – I don’t want to say excuse. That’s the wrong word. But that’s the common reaction people have to when they do something. They type up this nasty email and they send it and then they feel good for about 30 seconds and then the next day they’re like, “That’s not who I am. That’s what I thought in that moment because I was so emotional.”
When you’re emotional, you don’t think clearly. That’s part of being emotional that you don’t think clearly. That doesn’t mean emotions are bad; it just means that you have to account for the emotions or time of day that you’re making decisions.
It tends to be, the data that we’ve collected, unsurprisingly you don’t need advanced AI from Google to tell this, but people make worse decisions when they’re more emotional. But people also tend to make better decisions, more complicated sort of analysis in the morning than in the afternoon because your brain is tired in the afternoon.
Again, your brain is optimizing for laziness at all points in time. Thinking is hard work. Thinking through a problem at a second or third level is hard work. Trying to predict which variables matter and how they interact is hard work. Trying to pull out a mental toolbox of lenses and see the problem through other people’s eyes or step out of the system that you’re involved in so you can see yourself as an actor is hard work.
You’re more likely to make better decisions in the morning than you are in the afternoon. That doesn’t apply to everybody, but I think that’s a fair generalization.
When you’re making a decision, if you’re using a decision journal, it can just be a prompt that “Hey, I’m really upset right now. Maybe I’m going to make this decision tomorrow instead of today,” or “Maybe I’m not going to send this email right now. I’m just going to sit on it until the next morning,” which is usually good advice for emails after four that can – where you’re worked up and you just have to type something because you need to get it off your chest.
It’s fair to get it off your chest, but it’s probably not indicative of who you are or who you want to be or who you aspire to be. I think that we can become better versions of our selves by sort of tracking where we are emotionally and matching that to what we’re doing.
If we’re in a bad mood, we probably don’t want to be making business decisions about the direction of our company. We probably don’t want to be sort of making any rash emotional relationship decisions. We want to tone down. Maybe we’re just deciding what to watch on Netflix or we’re deciding what book to read or we’re deciding – we want to keep those decisions pretty minor and maybe closer to the vest and in ourselves, so we’re not affecting other people.
Pete Mockaitis
I like the tip about the email and holding off for a bit. I’m reminded of historians have talked about Abraham Lincoln and his letters that sometimes he’s really mad at a general during the Civil War and so he would be writing that up and then wait a moment or a day and say, “You know what? I’m not going to send that.” It’s pretty cool that historians found all these extra letters that had a lot of heat.
Shane Parrish
Yeah.
Pete Mockaitis
Then he’s like, “You know what? Eh, this is one is going to be heated and it’s going to go out and this one’s going to be heated and it’s never going to see the light of day.”
Shane Parrish
Isn’t that like an example of timeless wisdom there?
Pete Mockaitis
Yeah.
Shane Parrish
What’s changed is the technology or the availability and the reach. We could always do emotional things. We’ve been able to do that since we were probably like cavemen.
But now instead of one person or maybe our small tribe, we can reach a whole organization or the whole world on the internet by sending a tweet we don’t want to send or sharing something on Facebook that won’t look so good in the morning or saying something that somebody else that we might feel in the moment because we’re blinded to the complexity of other people, but isn’t really indicative of who they are and says more about us than anything.
I think it’s reflecting on those, catching our self and reflecting on that is how we sort of change behavior and become a better version of our self.
Pete Mockaitis
That’s excellent. Well, Shane, tell me, is there anything else that you’d like to share about decision making or anything you think folks who want to be awesome at their job just really need to know before we shift gears and hear about some of your favorite things?
Shane Parrish
Yeah, I think it’s tough to get advice from other people because what works for other people doesn’t necessarily work for you. What we’re looking for usually when we consume information is we’re looking sort of for the silver bullet, the easy fix, the if I only do these four things, I’m going to get a promotion or – I would just encourage people to be cautious about that.
Anything that’s so easily acquired or so easily available is probably not going to be a source of real or lasting wisdom. You’re going to have to do some work. The work is sort of taking ideas and digesting them in yourself. How we do that is through reflection. Most people have a hard time with that.
I think that setting aside time to think, not only about you, but about the life that you’re living and the life that you want to live and how you can bridge that gap or how you can be a better version of yourself or even just sort of rubbing your nose just a little bit in the mistakes you make.
Not to the point where you’re telling yourself terrible things or your self-talk is negative, but to the point where you’re acknowledging that you could have done better and that you will do better in the future and accurately diagnosing what it is that you did that you want to do differently next.
Pete Mockaitis
Lovely. Well, now could you share with us a favorite quote, something you find inspiring?
Shane Parrish
My favorite quote comes to me from a friend of mine, Peter Hoffman, who sent me this quote a long time ago by Joseph Tussman, which is – I’m going to try to remember here – “What the people must learn if you learn anything at all is that the world will do most of the work for you provided you cooperate with it by identifying how it really works and aligning yourself with those realities. If we don’t let the world teach us, it teaches us a lesson.”
Pete Mockaitis
Oh, you could chew on that for a while.
Shane Parrish
Isn’t that powerful?
Pete Mockaitis
Yeah.
Shane Parrish
It’s just like everything. There’s another really good one I got from Peter as well, which I think is super telling. It was actually about Peyton Manning, but it doesn’t matter who it’s about. It was “most geniuses, especially those who lead others, prosper not by deconstructing intricate complexities but by exploiting unrecognized simplicities.”
We all grab onto this esoteric knowledge as if it contains some sort of key, but really it’s going back to the basics and understanding the basics at a different level that gives us more meaningful, more timeless insight into the problems.
Pete Mockaitis
Thank you. Do you have a favorite study or experiment or a bit of research?
Shane Parrish
No. Common stuff is all great, but I’ve kind of gotten away from research a lot in the last decade or so, so I would say pass on that one.
Pete Mockaitis
All right. And a favorite book?
Shane Parrish
My favorite book, the one that’s probably impacted me the most is Marcus Aurelius’ Meditations. Interestingly enough, the first time I picked it up, I almost chucked it out a window. I was in university I think and I was told to read it. I just found it impenetrable. I don’t know if it was the translation or what was going on.
But then I picked up the Hays translation I think when I was 25 – 26 and I started reading about it and contextualizing it, which is also super important when you’re reading. But for me it just hit me at the right place at the right time.
It’s a book that I’ve gone back to often and sent to people when they’re going through some things. I send it to friends who work in professional sports and get fired or send it to people struggling with something.
It’s not sort of like an advice book. It’s more how to conduct yourself. It’s a bit of stoicism in the sense that you only control some things. You don’t control everything. If something bad has happened, and you need to move on.
But it’s not done in a way that a book like that would be written today. It’s done in a way that you’re reading the leader of the free world effectively at the time, who’s on the frontline with the Gauls I think, putting his life on the line. The guy can literally do anything he wants with impunity and he’s trying to become a better person. I think that there’s something inspiring and there’s something that we all see parts of us in that. We feel like we can handle anything after reading that.
Pete Mockaitis
Thank you. How about a favorite tool, something that helps you be awesome at your job?
Shane Parrish
My iPhone. That is my favorite tool. It’s the only thing that I use relentlessly.
Pete Mockaitis
Are there any noteworthy apps or-
Shane Parrish
Probably not a good example, but-
Pete Mockaitis
It comes up often. Are there any special apps or things you do with the phone that’s super useful and maybe distinctive?
Shane Parrish
Oh no, it’s all basics for me. It’s mostly I just try to keep things super simple. I use Twitter on my phone. I’m just going through it now. The alarm. Yeah, I just – I don’t know. Fortnite is on there, so I can play with the kids.
Yeah, it’s sort of like the one thing that’s – I was thinking about this today. Apple has this really – maybe this is a sidetrack so cut me off if you don’t want to talk about this – but it’s not just Apple, it’s your phone. Technology is becoming closer to you as a person. You put things in your ear. You have your phone in your pocket. You wear a watch. It’s so close to you and it’s so important.
It’s really interesting how people view technology and what shapes what they use. I use my phone all day to talk on the phone, to interact with people, sometimes to email. I use it for tickets, use it for ordering food. The variety of sort of tasks that you can do with it is ever expanding. It’s the one thing where I think if I lost it, it would just instantly need to be replaced.
Pete Mockaitis
Yeah and the closest of technology. The days of chips and things being inserted into us on a wide scale really don’t seem so crazy or faraway nowadays as they did a decade ago.
Shane Parrish
Oh yeah, it will be so interesting to see what’s happening. I think people are starting to try to put standards around this. There will always be – not always, but it will pay to defect if you are a nation that agrees to this. If you’re the sole defector and you can modify your genes or you can do something that gives you an advantage – it’s going to be a really interesting sort of game theory.
AI is going to be the same way, not only within a country, but sort of if you look at it as a global ecosystem, where the small countries that are reasonably uncompetitive on a natural resources basis can become super competitive when it comes to computer code, almost asymmetrically so.
If we put standards around what good and bad AI looks like, those are our standards. Is there a worldwide standard and what if you disagree from that? If you have 99 countries out of 100, so to speak, sign up for climate protection but one country defects and they defect in a meaningful way and they overcompensate for those other 99, it doesn’t really make a difference.
I think it’s going to be a really fascinating world to watch this play out. Are we going to have sort of wars over this stuff? I don’t know. It’s going to be interesting.
Pete Mockaitis
Indeed. Do you have a favorite habit?
Shane Parrish
Sleep.
Pete Mockaitis
Oh yeah.
Shane Parrish
That’s the only thing I’ve sort of focused on a lot more recently is just trying to get sleep. But really I started turning off my computer at nine at night now, which is super good. Then I do a lot of my reading in the morning instead of at night.
Pete Mockaitis
Is there a particular nugget you share that really seems to connect and resonate with folks? You get it retweeted or repeated back to you frequently?
Shane Parrish
No, I don’t think so. Pretty boring guy.
Pete Mockaitis
I’ll just say they’re all hits. It’s hard to single one out is how I would interpret that.
Shane Parrish
I like your generous interpretation much better than mine. Everybody who knows me would just be like, “No, you’re pretty boring.”
Pete Mockaitis
If folks want to learn more or get in touch, where would you point them?
Shane Parrish
You can go to FS.blog, sign up for a weekly newsletter. It’s a full of the most interesting things that I read on the internet. You can go to @FarnamStreet on Twitter, that’s F-A-R-N-A-M Street. Then that’s the best way to get in touch. Hit reply to any of our emails if you have any questions.
Pete Mockaitis
Cool. Do you have a final challenge or call to action for folks seeking to be awesome at their jobs?
Shane Parrish
Yeah, I think that the single biggest – two big changes. I’m going to give you two sort of calls to action. Two big changes make a meaningful impact in whatever you’re doing.
At every decision meeting, ask yourself, “And then what?” The second thing is before every big decision, go for a 15 minute walk and just you, just by yourself and just think about that problem. Don’t think about how you’re going to communicate it. Don’t think about anything other than that one problem and try to walk through it.
Focus on one thing for 15 minutes. That’s an eternity in this day and age. But work up to 30 minutes. That would be my goal. But just focus on the problem for 15 minutes. Try to think through it from different angles. Think through it from different vantage points. What does it look like? What does it look like from everybody else’s perspective? What does it look like if I’m an actor in this and I’m watching this play out?
I think that you’re going to make dramatically better decisions. The impact of those better decisions, it won’t be felt tomorrow, but if you do that for six months, you do it for a year, all of the sudden you’re going to have fewer problems, you’re going to have less stress at work, you’re going to have better results and you’re going to feel better. That’s a deadly combination.
Pete Mockaitis
Well, Shane, this has been such a treat. Thanks for taking the time and good luck with Farnam Street and all your adventures.
Shane Parrish
Thanks Pete.
