Mental Models For Leadership In The Modern Age
The study of mental models can improve your ability to make decisions and improve business outcomes. This post, part of our series on Decision Intelligence, reviews the mental models we recommend all business and government decision makers master.
Perhaps the most famous advocate for the study of mental models in business is Charlie Munger, the Vice Chairman of Berkshire Hathaway. He viewed mental models as mechanisms to enable the dismantling and solving of difficult problems. He suggested all business leaders be familiar with a “broad latticework of mental models” that can be selected from to allow new approaches to be applied to problems as needed. In speeches on the topic Munger frequently warned that leaders must know multiple models or risk failing disastrously.
Retired Air Force Colonel John Boyd was an early advocate for the study of mental models in competitive environments. In 1976 he published a paper titled Destruction and Creation which explored how to develop mental models for dynamic/chaotic environments. His later articulation of the OODA Loop flowed from this pioneering work on mental models and is further discussed below.
As a site and a community named as an homage to this model obviously it is a key one on our list. But as both Boyd and Munger would tell us, decision makers in competitive environments should be able to draw upon many models to ensure success. What follows is a review of the top models we recommend modern leaders master.
Models reviewed include
- OODA Loop
- Black Swans
- Gray Rhinos
- Secrets, Mysteries and Scenario Planning
- Strategic/Operational/Tactical Thinking
- System 1/System 2 Thinking
- Mitigating Cognitive Bias
- Models for Mitigating Falsehoods
- Finite and Infinite Games
- Reasoning From First Principles
- Data as a Weapon
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Black Swans and Gray Rhinos
Now more than ever, organizations need to apply rigorous thought to business risks and opportunities. In doing so it is useful to understand the concepts embodied in the terms Black Swan and Gray Rhino. See: Potential Future Opportunities, Risks and Mitigation Strategies in the Age of Continuous Crisis
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Use OODA Loop to improve your decision making in any competitive endeavor. Explore OODA Loop
The greatest determinant of your success will be the quality of your decisions. We examine frameworks for understanding and reducing risk while enabling opportunities. Topics include Black Swans, Gray Rhinos, Foresight, Strategy, Stratigames, Business Intelligence and Intelligent Enterprises. Leadership in the modern age is also a key topic in this domain. Explore Decision Intelligence
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Security and Resiliency
Security and resiliency topics include geopolitical and cyber risk, cyber conflict, cyber diplomacy, cybersecurity, nation state conflict, non-nation state conflict, global health, international crime, supply chain and terrorism. Explore Security and Resiliency
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Organizations in competitive environments should continually look for ways to gain advantage over their competitors. The ability of a business to learn and translate that learning into action, at speeds faster than others, is one of the most important competitive advantages you can have. This fact of business life is why the model of success in Air to Air combat articulated by former Air Force fighter pilot John Boyd, the Observe – Orient – Decide – Act (OODA) decision loop, is so relevant in business decision-making today.
In this business model, decisions are based on observations of dynamic situations tempered with business context to drive decisions and actions. These actions should change the situation meaning new observations and new decisions and actions will follow. This all underscores the need for a good corporate intelligence program. See: A Practitioner’s View of Corporate Intelligence
This post dives into actionable recommendation on ways to optimize a corporate intelligence effort. It is based on a career serving large scale analytical efforts in the US Intelligence Community and in applying principles of intelligence in corporate America. See: Optimizing Corporate Intelligence
Cognitive Bias and the errors in judgement they produce are seen in every aspect of human decision-making, including in the business world. Companies that have a better understanding of these cognitive biases can optimize decision making at all levels of the organization, leading to better performance in the market. Companies that ignore the impact these biases have on corporate decision-making put themselves at unnecessary risk. This post by OODA Co-Founder Bob Gourley provides personal insights into key biases as well as mitigation strategies you can put in place right now. See: An Executive’s Guide To Cognitive Bias in Decision Making
We strongly encourage every company, large or small, to set aside dedicated time to focus on ways to improve your ability to understand the nature of the significantly changed risk environment we are all operating in today, and then assess how your organizational thinking should change. As an aid to assessing your corporate sensemaking abilities, this post summarizes OODA’s research and analysis into optimizing corporate intelligence for the modern age. See: OODA On Corporate Intelligence In The New Age
This post discusses standards in intelligence, a topic that can improve the quality of all corporate intelligence efforts and do so while reducing ambiguity in the information used to drive decisions and enhancing the ability of corporations to defend their most critical information. See: Useful Standards For Corporate Intelligence
Broadly speaking, a weapon is anything that provides an advantage over an adversary. In this context, data is, and always has been, a weapon. This post, part of our Intelligent Enterprise series, focuses on how to take more proactive action in use of data as a weapon. See: Data is a Weapon
Fine Tuning Your Falsehood Detector: Time to update the models you use to screen for deception, dishonesty, corruption, fraud and falsity
The best business leaders are good at spotting falsehoods. Some joke and say the have a “bullshit detector”, but that humorous description does not do service to the way great leaders detect falsehoods. Bullshit is easy to detect. You see it and smell it and if you step in it it is your own fault. In the modern world falsehoods are far more nuanced. Now more than ever, business and government leaders need to ensure their mental models for detecting falsehood are operating in peak condition. For more see: Fine Tuning Your Falsehood Detector: Time to update the models you use to screen for deception, dishonesty, corruption, fraud and falsity