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The Power of Thinking Differently

Sahil Bloom

Welcome to the 242 new members of the curiosity tribe who have joined us since Wednesday. Join the 57,887 others who are receiving high-signal, curiosity-inducing content every single week.

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The rich text element allows you to create and format headings, paragraphs, blockquotes, images, and video all in one place instead of having to add and format them individually. Just double-click and easily create content.

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  • mldsa
  • ,l;cd
  • mkclds

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Headings, paragraphs, blockquotes, figures, images, and figure captions can all be styled after a class is added to the rich text element using the "When inside of"

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system.

Photo by Zetong Li

In 2009, a Stanford business professor named Tina Seelig split her class into groups and gave everyone a challenge:

Each group would have $5 and 2 hours to make the highest possible return on the initial money. At the end of the challenge, each group would give a short presentation to the class on their approach and results.

The results of the challenge were fascinating...

Most of the groups took a linear, logical approach:

  • Use the $5 to buy a few items
  • Barter with those items (resell or trade them for items of higher value)
  • Repeat
  • Sell the final items for something (hopefully) more than $5

These groups made a modest return on their initial $5.

A few groups ignored the $5 and instead thought up ways to make money in the 2 hours of allotted time:

  • Made and sold reservations at hot restaurants in town
  • Refilled bike tires in the center of campus for $1 each

These groups made a better return on their initial $5.

The winning group also ignored the $5, but took an entirely different approach:

They realized that the most valuable asset was not the $5 or the 2 hours of time for the challenge, but the presentation time in front of a class of Stanford students.

Realizing the value of this asset, they sold the presentation time to a company looking to recruit Stanford students for $650, netting a monstrous return on the $5 of initial capital.

The losing groups thought in linear, logical terms and achieved a linear, logical outcome.

The winning group thought differently.

3 Steps to Think Differently

There are two types of challenges we face:

  1. Low-Stakes: Lower potential, linear rewards. Decisions are easily reversible.
  2. High-Stakes: Higher potential, asymmetric rewards. Decisions are not easily reversible.

With low-stakes challenges, given the reward potential is low and the decisions are easily reversible, we can use shortcuts and heuristics to choose our path. We can take a logical, linear approach.

With high-stakes challenges, however, the high, asymmetric reward potential means we need to think differently. We want to take a creative, non-linear approach.

Let's generalize the learnings from the Stanford business class story and adapt three steps for thinking differently in these high-stakes situations...

Step 1: Avoid the Distraction

In the challenge, the $5 was the trap.

Most of the groups immediately anchored their thinking around the $5 because it was positioned as the "asset" that the groups needed to focus on leveraging to make a return.

In reality, it was nothing more than a distraction.

It was entirely possible that the best solutions may have involved the $5, but by narrowing the entire field of solutions to those that were centered around the $5, the groups had limited their field of vision significantly.

When faced with a challenge with the potential for outsized rewards, the first thing to do is make sure to avoid the distraction.

There will always be an "obvious" solution that is simple, clear, and entirely wrong.

Before you select it, make sure you complete Step 2...

Step 2: Ask Foundational Questions

Socratic Questioning (or the "Socratic Method") is a simple process of asking and answering questions that stimulate critical thinking to expose and vet underlying assumptions and logic.

To put it into action, follow this general structure:

  • Start with open-ended questions.
  • Propose ideas based on these questions.
  • Probe these ideas with progressive questioning.
  • Repeat until the best ideas are developed.

Here's a process of how you might apply Socratic Questioning:

  • Start asking questions: What's the problem you are trying to solve? We often waste time and energy trying to solve the "wrong" problem. Identify the “right” problem before you try to solve it.
  • Propose your current thinking on the problem: What is your hypothesis? What are the origins of that thinking?
  • Open the floor for targeted questioning: Why do you think this? Is the thinking too vague? What is it based upon?
  • Challenge the assumptions underlying the original thinking: Why do you believe this to be true? How do you know it’s true? How would you know if you were wrong? Identify the source of beliefs on a problem. Be ruthless in evaluating their integrity and validity.
  • Evaluate the evidence used to support the thinking: What concrete evidence do I have? How credible is it? What “hidden evidence” may exist?
  • Understand the consequences of being wrong: Can an error be quickly fixed? How costly is this mistake? Always understand the stakes.
  • Evaluate potential alternatives: What alternative beliefs or viewpoints might exist? Why might they be superior? Why do others believe them to be true? What do they know that I don’t? Evaluate them on their merits and ask these same fundamental questions about them.
  • After zooming in, zoom out: What was my original thinking? Was it correct? If not, where did I err? What conclusions can I draw from the process about systemic errors in my thinking?

Socratic Questioning takes time. It shouldn't be used on low-cost, easily-reversible decisions.

But when you encounter a high-stakes decision with the potential for asymmetric rewards in your business, career, or life, it's worth engaging in the exercise.

Step 3: Select the Leveraged Approach

Once you've avoided the distraction and leveraged Socratic Questioning to expose flawed assumptions and ground yourself in the appropriate ones, you are ready to make a decision on the optimal path forward.

The winning group selected the path of selling the presentation time as the path with the highest leverage and likelihood of success.

You can do the same: Slow down and select the path most likely to generate the asymmetric, risk-adjusted returns.

How to Think Differently

When faced with an important challenge with the potential for non-linear rewards, follow these three steps:

  1. Avoid the distractions: There's always an approach that seems obvious and simple, but may be entirely wrong. Avoid falling for the trap.
  2. Ask foundational questions: Strip away flawed assumptions and ground yourself in foundational ones. Use Socratic Questioning to unpack the problem.
  3. Select the leveraged approach: Select the highest-leverage approach with the highest likelihood of success. Slow down and identify the true assets and points of leverage in the system. Use them to your advantage.

Remember: Creative, non-linear, asymmetric thinking generates creative, non-linear, asymmetric outcomes.

The Power of Thinking Differently

Sahil Bloom

Welcome to the 242 new members of the curiosity tribe who have joined us since Wednesday. Join the 57,887 others who are receiving high-signal, curiosity-inducing content every single week.

What’s a Rich Text element?

The rich text element allows you to create and format headings, paragraphs, blockquotes, images, and video all in one place instead of having to add and format them individually. Just double-click and easily create content.

Static and dynamic content editing

A rich text element can be used with static or dynamic content. For static content,

just drop it into any page and begin editing. For dynamic content, add a rich text field to any collection and then connect a rich text element to that field in the settings panel. Voila!

  • mldsa
  • ,l;cd
  • mkclds

How to customize formatting for each rich text

Headings, paragraphs, blockquotes, figures, images, and figure captions can all be styled after a class is added to the rich text element using the "When inside of"

nested selector

system.

Photo by Zetong Li

In 2009, a Stanford business professor named Tina Seelig split her class into groups and gave everyone a challenge:

Each group would have $5 and 2 hours to make the highest possible return on the initial money. At the end of the challenge, each group would give a short presentation to the class on their approach and results.

The results of the challenge were fascinating...

Most of the groups took a linear, logical approach:

  • Use the $5 to buy a few items
  • Barter with those items (resell or trade them for items of higher value)
  • Repeat
  • Sell the final items for something (hopefully) more than $5

These groups made a modest return on their initial $5.

A few groups ignored the $5 and instead thought up ways to make money in the 2 hours of allotted time:

  • Made and sold reservations at hot restaurants in town
  • Refilled bike tires in the center of campus for $1 each

These groups made a better return on their initial $5.

The winning group also ignored the $5, but took an entirely different approach:

They realized that the most valuable asset was not the $5 or the 2 hours of time for the challenge, but the presentation time in front of a class of Stanford students.

Realizing the value of this asset, they sold the presentation time to a company looking to recruit Stanford students for $650, netting a monstrous return on the $5 of initial capital.

The losing groups thought in linear, logical terms and achieved a linear, logical outcome.

The winning group thought differently.

3 Steps to Think Differently

There are two types of challenges we face:

  1. Low-Stakes: Lower potential, linear rewards. Decisions are easily reversible.
  2. High-Stakes: Higher potential, asymmetric rewards. Decisions are not easily reversible.

With low-stakes challenges, given the reward potential is low and the decisions are easily reversible, we can use shortcuts and heuristics to choose our path. We can take a logical, linear approach.

With high-stakes challenges, however, the high, asymmetric reward potential means we need to think differently. We want to take a creative, non-linear approach.

Let's generalize the learnings from the Stanford business class story and adapt three steps for thinking differently in these high-stakes situations...

Step 1: Avoid the Distraction

In the challenge, the $5 was the trap.

Most of the groups immediately anchored their thinking around the $5 because it was positioned as the "asset" that the groups needed to focus on leveraging to make a return.

In reality, it was nothing more than a distraction.

It was entirely possible that the best solutions may have involved the $5, but by narrowing the entire field of solutions to those that were centered around the $5, the groups had limited their field of vision significantly.

When faced with a challenge with the potential for outsized rewards, the first thing to do is make sure to avoid the distraction.

There will always be an "obvious" solution that is simple, clear, and entirely wrong.

Before you select it, make sure you complete Step 2...

Step 2: Ask Foundational Questions

Socratic Questioning (or the "Socratic Method") is a simple process of asking and answering questions that stimulate critical thinking to expose and vet underlying assumptions and logic.

To put it into action, follow this general structure:

  • Start with open-ended questions.
  • Propose ideas based on these questions.
  • Probe these ideas with progressive questioning.
  • Repeat until the best ideas are developed.

Here's a process of how you might apply Socratic Questioning:

  • Start asking questions: What's the problem you are trying to solve? We often waste time and energy trying to solve the "wrong" problem. Identify the “right” problem before you try to solve it.
  • Propose your current thinking on the problem: What is your hypothesis? What are the origins of that thinking?
  • Open the floor for targeted questioning: Why do you think this? Is the thinking too vague? What is it based upon?
  • Challenge the assumptions underlying the original thinking: Why do you believe this to be true? How do you know it’s true? How would you know if you were wrong? Identify the source of beliefs on a problem. Be ruthless in evaluating their integrity and validity.
  • Evaluate the evidence used to support the thinking: What concrete evidence do I have? How credible is it? What “hidden evidence” may exist?
  • Understand the consequences of being wrong: Can an error be quickly fixed? How costly is this mistake? Always understand the stakes.
  • Evaluate potential alternatives: What alternative beliefs or viewpoints might exist? Why might they be superior? Why do others believe them to be true? What do they know that I don’t? Evaluate them on their merits and ask these same fundamental questions about them.
  • After zooming in, zoom out: What was my original thinking? Was it correct? If not, where did I err? What conclusions can I draw from the process about systemic errors in my thinking?

Socratic Questioning takes time. It shouldn't be used on low-cost, easily-reversible decisions.

But when you encounter a high-stakes decision with the potential for asymmetric rewards in your business, career, or life, it's worth engaging in the exercise.

Step 3: Select the Leveraged Approach

Once you've avoided the distraction and leveraged Socratic Questioning to expose flawed assumptions and ground yourself in the appropriate ones, you are ready to make a decision on the optimal path forward.

The winning group selected the path of selling the presentation time as the path with the highest leverage and likelihood of success.

You can do the same: Slow down and select the path most likely to generate the asymmetric, risk-adjusted returns.

How to Think Differently

When faced with an important challenge with the potential for non-linear rewards, follow these three steps:

  1. Avoid the distractions: There's always an approach that seems obvious and simple, but may be entirely wrong. Avoid falling for the trap.
  2. Ask foundational questions: Strip away flawed assumptions and ground yourself in foundational ones. Use Socratic Questioning to unpack the problem.
  3. Select the leveraged approach: Select the highest-leverage approach with the highest likelihood of success. Slow down and identify the true assets and points of leverage in the system. Use them to your advantage.

Remember: Creative, non-linear, asymmetric thinking generates creative, non-linear, asymmetric outcomes.