GNT #075: 4 Thinking Models I Rely On

read time: 4.5 minutes

Making decisions is at the core of everything we do, both in business and in life.

The decisions we make communicate who we are and what we stand for to the outside world.

In my work, I'm constantly faced with choices that can significantly impact my clients' growth and success.

Similarly, as a mom, I navigate daily decisions that shape the well-being and happiness of my family.

Strategic, long-term decisions are often the toughest because they require a balance of clear objectives, data gathering, and critical thinking.

However, our human nature, filled with emotions, biases, and past experiences, can make this process incredibly challenging.

So, how do we cut through the noise and make the best possible decisions?

Over the years, I've come to rely on several thinking models that help me navigate the complexities of decision-making.

I don't always make perfect decisions, but these models help me remain objective and focused on what truly matters.

Today, I’m sharing my favorite 4 thinking models and frameworks that help me make strategic decisions in my work and life.

Let's go.

The OODA Loop: Observe, Orient, Decide, Act

[image cred online.visual-paradigm.com]

What is it?

The OODA Loop, developed by military strategist John Boyd, is a decision-making process that involves four steps: Observe, Orient, Decide, Act.

1 - Observe

What is the current situation?
What is the reason you want to change?
How badly do you want to change?

2 - Orient

Where are you currently relative to where you want to go?
How far away is the destination?

3 - Decide 

What is the exact path you are going to take?
How are you going to handle setbacks?

4 - Act

What's the approach and method you will take to implement the decisions?
What is your action plan?

Why it works

In a fast-paced environment, being able to quickly assess the situation, understand your options, make a decision, and take action is crucial.

Many businesses linger in a grey zone for too long, unable to make clear decisions.

How I use it

I've built my Catapult North Growth Focus Guide, my entire client onboarding process and strategic growth planning framework, around this concept.

1 - Observe

-Founder vision & motivation
-Stakeholder interviews
-Conduct client interviews or surveys
-Market research
-Product/service analysis
-Current channel marketing metrics
-Marketing team/partners skill set
-Current marketing assets

2 - Orient

-Understand 10, 3, and 1 year business goals
-Understand historical path of business generated
-Win/loss analysis
-Align marketing goals to business goals
-Detailed SWOT Analysis

3 - Decide 

-Present and align on my strategic roadmap and action plan
-Short term strategy aligned with long-term vision

4 - Act

-Implement decisions with a clear action plan
-Assign responsibilities and set timelines
-Iterate as challenges arise

Sunk Cost Fallacy

What is it?

The sunk cost fallacy is the tendency to continue an endeavor once an investment (money, effort, or time) has been made, even when it is not the best decision.

Why it works

Recognizing this tendency helps you make decisions based on future value rather than past investments. 

How I use it

I help my clients let go of ineffective strategies or tools, even if they've invested heavily in them. This frees up resources to focus on what truly drives growth.

💡 Life tip 🎬

On a recent at-home date night my husband Ed and I decided to watch the movie Everything Everywhere All At Once.

Halfway through we realized it just wasn't for us. 🫣 

And that's OK.

We ended up going to bed an hour earlier and got a great night's sleep. (the better choice anyway!)

Pareto Principle

[image cred Pejman Milani]

What is it?

The Pareto Principle, or the 80/20 rule, states that 80% of results come from 20% of efforts.

Why it works

Focusing on the most impactful activities can maximize efficiency and productivity.

This principle helps me identify the key activities that drive the most significant results for my clients and prioritize them.

Examples

-Focusing marketing efforts on the top-performing channels.
-Allocating resources to the most profitable products or services.

💡 Life application

In 2024, I've been focusing on fewer activities that bring me the most joy:

-Traveling with my family
-Reading with my kids
-Relaxing in my sauna, bathtub, or with a massage

And letting go of the things that don't:

-Alcohol
-Limiting social media
-Accumulating things like clothes

Read more: GNT #061: Buy Back Your Time

Second-Order Thinking

[image cred https://fs.blog]

What is it?

Second-Order Thinking involves looking beyond the immediate consequences of a decision to consider its longer-term and indirect effects.

It’s about thinking through the second, third, and further-order consequences of actions.

Why it works

This model helps me anticipate the ripple effects of decisions, helping me to make more informed choices that align with my long-term goals.

It prevents short-sighted decisions and encourages a deeper analysis of potential outcomes.

Examples

-Business: Before launching a new marketing campaign, I consider not just the immediate boost in sales but also how it will affect brand reputation, customer satisfaction, and long-term loyalty.

-Client Recommendations: When advising clients on new initiatives, I think about how these changes will impact other areas of their business and their long-term growth.

-Personal Finance: I consider the long-term financial implications of our major purchases, what's the opportunity cost and what impact will they have on our future financial stability.

-Health Decisions: Considering the long-term health effects of my diet and lifestyle choices beyond immediate benefits or convenience.

-Parenting: Thinking about how my words, actions, or educational choices, will affect my kids future self-talk and behavior.

-Time: Evaluating how I spend my time by considering not just immediate productivity but also long-term well-being and life balance. If I do this now, will it burn me out for the next week or month?

Takeaway

Decision overload is real.

But in leveraging thinking models like these, we can navigate the complexities of decision-making more effectively.

We're going to make mistakes in life. We're beautifully human. 

But having the tools in our toolkit helps us remain objective and focused on what truly matters.

Are there any other mental models you rely on in your decision-making?

Let me know!

 
See you next week.

p.s. Head swirling today? Here are 3 proven ways to think clearly.

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