Adam Smith

Structured Thinking versus Going With The Flow

October, 2013

Life is full of new situations, and when faced with one, how do you respond?

Most engineers, myself included, have spent time learning mental models that can be used to explain, predict, and reason about these new situations. Every time you learn about a new psychological bias, for example, you're learning a new mental model that can help you reason.

This approach has been best described by Charlie Munger and Ray Dalio. It's no surprise that both of these gentlemen come from finance, a world dominated by structured thinking.

But there's also the "go with the flow" approach. This approach doesn't need pros/cons lists, thinking across multiple sittings, or lots of stress about everything.

Most people aren't good at both styles of decision making, mostly because they're just not paying close enough attention to what's going on both around them and inside their head. So I tried to understand both styles in more detail, and wanted to share what I've found.

Disadvantages of structured approach

  • Weak on anything that requires "street smarts"
  • Makes new experiences more difficult because it requires more thinking -> end up avoiding them (bad)
  • Difficult for environments/contexts that change rapidly
  • Similarly, makes it difficult to be opportunistic
  • Paradox of choice and paralysis of analysis when the optimal decision is unclear
  • Takes a lot more work, adds additional worry to life
  • Cognitive dissonance when your models aren't accurate with the world / slower and more painful to adapt
  • Tends to fail more catestrophically when you don't have all of the relevant information or have some misinformation re the situation
  • Can sometimes take the fun out of things that otherwise would be fun
    • Work / thinking involved
    • Biases towards being critical of things
    • Pressure to get "the right" answer

Disadvantages of "go with the flow"

  • Tends to be "greedy algorithm" / no second- and third-order thinking
  • Tends to get wrong answers in complex settings
  • Tends to be inferior for high-leverage decision making (e.g. ceo's of large companies)
  • Tends to pick decisions that bias towards short term horizons, e.g. bad for career planning, etc

How does one get better at structured thinking?

  • Learn mental models and how they combine / how to use them
  • Lots of practice explaining/predicting/engineering results in complex settings
  • Learn to look at things from a "clean slate" perspective vs. looking at the way things are already and going from there
  • Slow down and make decisions more carefully / deliberately
  • Important ingredient: don't get emotionally attached to your models of something. Be willing to change your mind quickly. Jeff Bezos and Steve Jobs are famous for saying this.

How does one get better at go-with-the-flow thinking?

  • Look for situations where others got the right or better answer faster, i.e. they seemed to "shortcut" to the right answer
  • Err towards saying "yes" to yes/no questions, i.e. take more risks, don't turn down new experiences that will call for street skills
  • Make decisions more quickly, and take decisive action more quickly
  • Identify decisions that don't matter much and don't spend time on them
  • Be more okay with getting the wrong answers on things

When to use each

  • Social or party situations: go-with-the-flow usually dominates because it's faster (more fun), less stressful (more fun), and decisions in these contexts tend to be easy / driven by first-order factors. For example, suppose you need to decide where to eat, or which movie to watch with some friends. In this case, getting a stress-free decision is usually more important than an optimal one.
  • "Strategic" decisions (in biz or personal settings, like career planning / getting married / business strategy / investing): structured thinking
  • Meeting people: use go-with-the-flow when possible, i.e. unless you really do need to judge/understand them. Meeting people in social settings tends to call for go with the flow, and business settings call for judging/understanding.
  • Starting a company or being a CEO calls for a tricky combination of both approaches. (I'll write more about this later, but the short version is: you have very imperfect information and things are changing rapidly, so you have to update your reasoning often and be okay with having imperfect models.)

Some of my personal experiences

  • I've always been a structured thinker by nature.
  • I have noticed some situations where my structured approach has yielded better results compared to others' more "go with the flow" approaches. Common examples:

    • Building a great toolchain for managing my personal information
    • Being deliberate about picking the next startup idea
    • Generally thinking outside of the box to find better ways to solve common problems
    • Getting better outcomes from complex or multi-party social situations

  • I have also noticed, though, that I was often adding stress to myself and those around me by over-thinking certain things. Common examples include:

    • Should I have negotiated harder to save $2?
    • How can I fight situation XYZ (e.g. taxi driver is doing something illegal that I don't like) versus focusing on adapting and moving forward?
    • I can't do XYZ (improve my interior design, learn how to cook, etc) because it will take too much work. (Whereas I should just jump in and "do it live".)

Final thoughts

  • Most people tend towards going with the flow; engineers tend towards structured thinking
  • Groups tend to work best when they have a mix of people
  • Very few people are really skilled at both. But as I mentioned in the introduction, you can be one of them if you practice with new experiences, and reflect on when you over- vs under-think through decisions.

P.S. I've published my list of mental models here. I haven't been able to put any real work into the site yet, but may in the future.

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