# Useful Ideas Mental models worth internalising. Sources include books, articles, and other writing. | Idea | What it does | | -------------------------------------- | ----------------------------------------------------------------------------------------------- | | [[Activity-Level Analysis]] | Profitability belongs to activities, not industries | | [[Base Rates]] | Start with how often things happen in general | | [[Bayesian Probability]] | Update beliefs proportionally to evidence strength | | [[Black Box Thinking]] | Treat failure as data; build systems that capture learning | | [[Blake-Mouton Grid]] | Concern for people vs concern for results | | [[Calibrated Questions]] | "How" and "What" questions that guide without commanding | | [[Chesterton's Fence]] | Understand why something exists before removing it | | [[Complex Adaptive Systems]] | Systems where agents adapt to each other—unpredictable but patterned | | [[Complements]] | Products that make yours more valuable | | [[Counter-Positioning]] | New model incumbents can't copy without damaging themselves | | [[Crystals of Imagination]] | Products embody knowledge; the economy amplifies access to others' knowhow | | [[Cynefin]] | Different domains need different approaches | | [[Dancing with Systems]] | Work with system dynamics, not against them; respond rather than control | | [[Deming's 14 Points]] | Quality comes from improving the system, not exhorting the workers | | [[Earned Secrets]] | Proprietary understanding from deep operational experience; combine with enduring advantage | | [[Effectuation]] | Start with means, let goals emerge; control the future rather than predict it | | [[End-to-End Process]] | Own the whole process, not fragments; eliminate handoffs | | [[Ergodic Hypothesis]] | Time average ≠ ensemble average; what matters is your path | | [[Explore vs Exploit]] | Balance trying new things against using what works | | [[Goodhart's Law]] | When a measure becomes a target, it ceases to be a good measure | | [[Growth Mindset]] | Abilities develop through effort; failure is feedback | | [[Hanlon's Razor]] | Never attribute to malice what's explained by incompetence | | [[Herzberg's Two-Factor Theory]] | Hygiene factors prevent dissatisfaction; motivators create engagement | | [[Inversion]] | Solve backward: avoid stupidity rather than seeking brilliance | | [[Kantor's Four Player Model]] | Four communication stances teams need: Mover, Follower, Opposer, Bystander | | [[Kelly Criterion]] | Size bets proportionally to edge; never bet everything | | [[Law of Requisite Variety]] | Only variety can absorb variety—match complexity to environment | | [[Little's Law]] | Cycle time = work in progress / throughput | | [[Lognormal Distribution]] | Mean > median; estimates underpredict because tails are long | | [[Loss Aversion]] | Losses hurt ~2x more than equivalent gains feel good | | [[Marginal Gains]] | Break problems into parts; improve each by small amounts | | [[Maslach's Six Factors]] | Burnout comes from chronic stress across workload, values, reward, control, fairness, community | | [[McNamara Fallacy]] | Decisions based solely on numbers ignore what can't be measured—then assume it doesn't exist | | [[Mimetic Desire]] | We want what others want; desire is imitative, not autonomous | | [[Mintzberg's Managerial Roles]] | What managers actually do: 10 roles across interpersonal, informational, and decisional | | [[Multi-Armed Bandit Problem]] | Balance exploration and exploitation dynamically | | [[Network Effects]] | Value increases as more people use it—winner-take-most dynamics | | [[OODA Loop]] | Observe → Orient → Decide → Act; speed of iteration wins | | [[Optimal Stopping]] | When to stop searching and commit (37% rule) | | [[Optionality]] | Prefer choices that keep options open; asymmetric upside | | [[POSIWID]] | The purpose of a system is what it does, not what it claims | | [[Process Power]] | Operational excellence that takes years to replicate | | [[Process vs Outcome]] | Judge decisions by quality of thinking, not results | | [[Recognition Primed Decision Making]] | Experts pattern-match, then mentally simulate | | [[Ringelmann Effect]] | Individual effort decreases as group size increases | | [[Scale Economies]] | Unit costs decline as volume increases | | [[Scale Economies Shared]] | Pass scale savings to customers; create compounding loyalty flywheel | | [[Schopenhauer's 38 Stratagems]] | Rhetorical tricks for winning arguments regardless of truth—a guide for defence | | [[Second-Level Thinking]] | Ask "and then what?"—first-level thinking is consensus | | [[Secretary Problem]] | Explore first 37%, then pick first option better than all explored | | [[Self-Image]] | Performance equals self-image; change identity to change results | | [[Skin in the Game]] | Only trust those who bear consequences of their advice | | [[Switching Costs]] | Friction that keeps customers from leaving | | [[Systems Thinking]] | See interconnections, feedback loops, and delays—not just events | | [[Tacit Knowledge]] | Knowledge you can only get from doing, not reading | | [[Tactical Empathy]] | Understand their world to influence their decisions | | [[The Barbell Strategy]] | Combine extreme safety with small high-risk bets; avoid the middle | | [[The Five Focusing Steps]] | Identify constraint → exploit → subordinate → elevate → repeat | | [[The Value Stick]] | Strategy = raise WTP or lower WTS; capture the spread | | [[Theory of Constraints]] | System output is limited by one bottleneck; fix that first | | [[Via Negativa]] | Improve by removing, not adding; less is often more | | [[Viable System Model]] | Five functions every organisation needs to survive |