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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.

Background:

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

  1. OODA Loop
  2. Hackthink
  3. Black Swans
  4. Gray Rhinos
  5. Secrets, Mysteries and Scenario Planning
  6. Strategic/Operational/Tactical Thinking
  7. System 1/System 2 Thinking
  8. Mitigating Cognitive Bias
  9. Models for Mitigating Falsehoods
  10. Finite and Infinite Games
  11. Reasoning From First Principles
  12. Data as a Weapon

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Related Reading:

Black Swans and Gray Rhinos

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Additional Resources:

A Practitioner’s View of Corporate Intelligence

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

Optimizing 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

An Executive’s Guide To Cognitive Bias in Decision Making

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

OODA On Corporate Intelligence In The New Age

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

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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

In Business, Like In War, Data Is A Weapon

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

 

Bob Gourley

Bob Gourley

Bob Gourley is the co-founder and Chief Technology Officer (CTO) of OODA LLC, the technology research and advisory firm with a focus on artificial intelligence and cybersecurity which publishes OODALoop.com. Bob is the co-host of the popular podcast The OODAcast. Bob has been an advisor to dozens of successful high tech startups and has conducted enterprise cybersecurity assessments for businesses in multiple sectors of the economy. He was a career Naval Intelligence Officer and is the former CTO of the Defense Intelligence Agency.