#1 Michael Mauboussin: When To Trust Your Gut
Host Shane Parrish interviews financial strategist and author Michael Mauboussin, who shares insights on daily routines, reading habits, and making better decisions. They discuss the role of intuition, organizational processes, and effective strategies for teaching children critical thinking.
Deep Dive Analysis
14 Topic Outline
Michael Mauboussin's Daily Routine and Habits
Technology's Role in Reading and Information Consumption
Process for Reading, Note-Taking, and Synthesizing Information
The Role and Limitations of Intuition in Decision-Making
Honing Intuition and Deliberate Practice
Improving Decision-Making Processes in Organizations
Evaluating Decision Processes in Constantly Changing Environments
How Lower-Level Employees Can Nudge Organizational Processes
Impact of Technology on Decision-Making and Automation
Explanation and Application of the Colonel Blotto Game
Strategies for Teaching Children How to Think
Fostering Open-Mindedness in Adults and Organizations
Influential Books and Their Impact
Current Reading and Future Interview Recommendations
8 Key Concepts
Intuition
Intuition is a fast, automatic, experiential system (System 1) that is domain-specific and difficult to train. It works well in stable and linear environments, but poorly in unstable, nonlinear ones.
Expertise vs. Experience
Expertise is defined as having a predictive model that works, distinguishing it from mere experience (doing something for a long time). True expertise allows for accurate predictions in a given domain.
Colonel Blotto Game
A game theory formulation where two competitors allocate a fixed number of 'soldiers' across multiple 'battlefields' to win the most battles. It illustrates strategic resource allocation and competition dynamics, especially with asymmetric resources or varying numbers of battlefields.
Growth Mindset (Carol Dweck)
This mindset emphasizes focusing on effort rather than outcomes, particularly for young people. The goal is to praise hard work and learning, regardless of immediate results, to encourage persistence and development.
Bayesian Updater
A concept describing someone who updates their probabilities or beliefs based on new information. It involves starting with a prior belief and adjusting it appropriately when new evidence comes in, which is often difficult for humans to do accurately.
Consilience
A concept advocating for the unification of knowledge across different disciplines. It suggests that many complex problems require interdisciplinary approaches, breaking down intellectual barriers to find solutions.
Complex Adaptive Systems
A framework for understanding systems like markets, economies, or organizations where individual components interact in dynamic, non-linear ways, leading to emergent properties. This lens helps explain phenomena like the wisdom of crowds.
The Interpreter
A module in the left hemisphere of the brain, identified through split-brain research, that attempts to close all cause-and-effect loops. This module is responsible for creating narratives and seeking causality, which can sometimes lead to difficulty with statistical thinking.
9 Questions Answered
His daily routine prioritizes at least eight hours of sleep, extensive reading and research, and regular physical activity like playing hockey. He also tries to chunk time for focused work, especially reading and writing.
While technology can be distracting, it's also very useful for quick checks like Twitter. For longer reads, Michael prefers physical books over Kindles, as he finds he remembers information better by its physical location in a book.
Intuition has a role, but it's often overestimated. It's effective in stable, linear environments where sufficient practice has trained System 1 thinking, but unreliable in unstable, nonlinear environments.
Intuition can be honed through deliberate practice in stable, linear environments, where consistent feedback allows for course correction and internalization of lessons. This process helps train System 1 to become more effective.
Employees can nudge processes by articulating better ways of doing things, explaining the benefits to the organization, and proposing experiments. This approach is more constructive than simply criticizing existing methods.
Technology, especially algorithms and computers, can significantly improve decision-making by efficiently processing large amounts of data, establishing base rates, and making decisions without emotional bias. It's increasingly taking over tasks previously done by humans.
The game illustrates competitive strategies: stronger players should simplify the game (fewer battlefields) to leverage their strength, while weaker players should add battlefields to dilute the stronger player's advantage, akin to guerrilla tactics or disruptive innovation.
Parents can emphasize effort over outcomes, encourage thinking about alternative points of view, and use 'fun bets' to teach probabilistic thinking. Modeling thoughtful decision-making and offering recommendations instead of directives also helps.
Fostering open-mindedness in adults is challenging due to personality factors, but it can be encouraged by constantly revealing alternative points of view, reading across disciplines, and creating environments where diverse ideas are welcomed and encouraged.
47 Actionable Insights
1. Prioritize Sleep for Functioning
Aim for at least eight hours of sleep daily to ensure you are functioning effectively and productively.
2. Engage in Regular Physical Activity
Incorporate physical activity, such as working out a number of times a week or playing a sport, to maintain balance in your daily routine.
3. Dedicate Time to Reading and Research
Spend a significant portion of your day reading and conducting research, as this is a key element of a productive routine.
4. Balance Key Life Elements
Integrate sleeping well, eating well, exercising, and extensive reading into your daily routine to achieve a typical and productive day.
5. Chunk Large Blocks for Focused Work
Methodically block out large chunks of time, especially for reading and writing, to improve sustained effort and attention and avoid distractions.
6. Tune Out Technology Distractions
Actively turn off or tune out technology as much as possible, checking it only from time to time, to avoid being easily distracted during focused work.
7. Apply Disciplined Intuition
When making decisions, always start with a base rate or statistical approach, then layer in your intuition to avoid seeking out supporting evidence first.
8. Emphasize Decision-Making Process
Focus on the quality of the decision-making process itself rather than solely on individuals or outcomes, especially in organizational settings.
9. Clearly Define the Problem
Before seeking solutions or alternatives, ensure you have settled on and clearly understand what you are trying to figure out to begin with.
10. Surface Diverse Alternatives and Ideas
Actively work to surface all possible alternative solutions and ideas within a group to prevent suppression of views and ensure comprehensive consideration.
11. Senior Leaders Avoid Strong Views
If you are a senior leader, refrain from expressing your view too strongly at the outset to encourage alternative points of view from others and avoid suppressing opinions.
12. Learn to Manage Diversity Effectively
Beyond simply having diversity in an organization, focus on how to actively manage and take advantage of diverse perspectives for broad improvement.
13. Avoid Outcome Bias in Evaluation
Do not equate successes with good decisions and failures with bad decisions after the fact, as this is a common and significant mistake in assessment.
14. Emphasize Effort, Not Outcomes
When teaching or parenting, focus on praising and dwelling on effort rather than outcomes (like grades or test results) to foster a growth mindset.
15. Offer Recommendations, Not Directives
When guiding others, especially children making decisions, provide recommendations and ideas rather than telling them exactly what to do, to encourage independent thought.
16. Provide Guides for Thinking
Offer frameworks, ideas, or recommendations to help others in their decision-making process, rather than making decisions on their behalf.
17. Model Thought Processes for Others
When making your own decisions, explain your thinking process aloud to others, demonstrating how you approach problems.
18. Read Across Disciplines for Openness
Make a concerted effort to read widely across various disciplines to expose yourself to different ways of thinking and foster open-mindedness.
19. Actively Seek Diverse Thinking
Consciously expose yourself to different ways of thinking to broaden your perspective and improve your ability to update your views.
20. Create Environment for Diverse Ideas
Foster a setting where various ideas are not only welcomed but actively encouraged, allowing people to be exposed to and consider different perspectives.
21. Hone Intuition with Deliberate Practice
In stable and linear environments, improve your intuition through deliberate practice and consistent feedback to correct course and internalize lessons.
22. Integrate Reading into Work/Speaking
Use concepts from your reading in your own research, writing, or speaking to deepen your understanding of the material.
23. Actively Recall and Discuss Learnings
Try to remember, bring up in conversation, and weave new learnings into your mental models to better integrate them into your thinking.
24. Annotate Key Books Deeply
For particularly impactful books (about one in ten), underline and write extensive notes to engage more deeply with the material.
25. Train Probabilistic Thinking
Develop a mindset for thinking about the world probabilistically, potentially by practicing games like poker to understand concepts like pot odds.
26. Communicate Process Improvements Clearly
As a lower-level employee, articulate better ways of doing things to senior people by explaining the benefits to the organization.
27. Propose Constructive Alternatives
When suggesting changes, frame them constructively, focusing on how they will lead to better business results rather than criticizing current methods.
28. Suggest Experimentation for New Processes
Propose trying new processes as low-cost experiments for a subset or limited time, with the option to revert if unsuccessful.
29. Leverage Technology for Data
Utilize technology to access and analyze large amounts of data and establish base rates more effectively for decision-making.
30. Use Algorithms to Counter Bias
Set up thoughtful decision rules or algorithms to guide decisions, as they can help maintain quality and consistency when emotions are aroused.
31. Stronger Players: Simplify Game
In head-to-head competition, if you are the stronger player, simplify the game by having as few battlefields as possible to overwhelm your competitor.
32. Weaker Players: Expand Battlefields
If you are the weaker player, add battlefields or diversify domains to dilute the strength of a stronger opponent, using tactics like guerrilla warfare or disruptive innovation.
33. Encourage Alternative Points of View
Prompt children or others to consider different perspectives on a topic to broaden their understanding and thinking.
34. Use “Fun Bets” to Teach Probabilities
Engage in small, “fun bets” with a clear payout structure to teach children about probabilities and the underlying math, even if they win.
35. Explain Underlying Concepts and Math
When teaching, go beyond just the answer to a problem; explain the math and concepts behind it, potentially using simulations, for deeper understanding.
36. Prefer Physical Books for Recall
Read physical books over e-readers for longer reads, as the physical format can aid memory recall by associating information with its location in the book.
37. Optimize Team Size for Decisions
Be aware that there is an optimal team size for decision-making; teams that are too large (e.g., 10-15 people) can dilute efforts and hinder effective outcomes.
38. Use Blotto Game for Conflict
Employ the Colonel Blotto game (simplified) with children or in simple disputes as a more interesting way to resolve squabbles than rock, paper, scissors, teaching strategic allocation.
39. Read “How to Read a Book”
Read Mortimer Adler’s “How to Read a Book” to learn about different levels of attention to pay to various types of reading material.
40. Read “Intuition” by David Myers
Read David Myers’ book “Intuition” for a thoughtful and comprehensive treatment of the role and limitations of intuition.
41. Read “Creating Shareholder Value”
Read Al Rappaport’s “Creating Shareholder Value” for influential insights, particularly from a business and financial perspective.
42. Read “Darwin’s Dangerous Idea”
Read Dan Dennett’s “Darwin’s Dangerous Idea” to understand how evolutionary thinking can permeate and influence almost everything you think about.
43. Read “Consilience” by E.L. Wilson
Read E.L. Wilson’s “Consilience” to appreciate the unification of knowledge and the importance of solving problems at the intersections of disciplines.
44. Read “Complexity” by Mitch Waldrop
Read Mitch Waldrop’s “Complexity” to learn about complex adaptive systems and apply this mental model to understand various systems like organizations, businesses, and markets.
45. Read “Work Rules” by Laszlo Bock
Read Laszlo Bock’s “Work Rules” for insights into innovative, analytically driven human resources policies and managing people effectively, including lessons from Google’s experiences.
46. Read “Creativity Inc.” by Ed Catmull
Read Ed Catmull’s “Creativity Inc.” to learn how to generate diversity in an organization while maintaining a common mission and handling necessary restarts.
47. Read “Tales from Both Sides Brain”
Read Michael Gazzaniga’s “Tales from Both Sides of the Brain” for fascinating research on split-brain patients and the “interpreter” module in the left hemisphere, revealing how we construct narratives.
6 Key Quotes
Expertise, an expert is someone who has a predictive model that works.
Michael Mauboussin
You have to differentiate between experience and expertise.
Michael Mauboussin
If you're the stronger player, what you want to do in a head to head competition, you're, you, what you want to do is simplify the game.
Michael Mauboussin
If you are the weaker player, what you want to do is, uh, add battlefields. You want to dilute, uh, you want to play across as many domains as possible to dilute the strength of the stronger player.
Michael Mauboussin
In our household, we never emphasize outcomes. We only emphasize effort.
Michael Mauboussin
Many of the problems that we face, uh, as individuals and societally are problems that are going to be at the intersections of disciplines.
Michael Mauboussin
4 Protocols
Disciplined Intuition Approach
Michael Mauboussin (attributing Danny Kahneman)- Always start with the base rate or a statistical approach.
- Then, layer in your intuition.
Underdog Strategy (Colonel Blotto Application)
Michael Mauboussin- Add battlefields to the competition.
- Dilute the strength of the stronger player by playing across as many domains as possible.
Stronger Player Strategy (Colonel Blotto Application)
Michael Mauboussin- Simplify the game.
- Have as few battlefields as possible to ensure skill/resources overwhelm the competitor.
Parenting for Thinking Skills
Michael Mauboussin- Emphasize effort over outcomes in all situations.
- Encourage children to consider alternative points of view.
- Use 'fun bets' or real-world examples to teach probabilistic thinking and the math behind it.
- Model thoughtful decision-making by explaining your own process.
- Offer recommendations and guides for thinking rather than dictating decisions.