Mental Models

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Mental Models by Mind Map: Mental Models

1. Economy Mental Models

1.1. The Three Rivers Model

1.1.1. The Three Rivers Model measures both construction and business operations phases in terms of total output, total earnings, and total employment using the U.S. Bureau of Economic Analysis’ Regional Input-Output Modeling System, more commonly known as RIMS II data.

1.1.2. How is economic impact measured? Total Output Total Earnings Total Employment

1.2. Phillips Curve

1.2.1. The Phillips curve is an economic concept developed by A. W. Phillips stating that inflation and unemployment have a stable and inverse relationship.

1.2.2. The theory claims that with economic growth comes inflation, which in turn should lead to more jobs and less unemployment.

1.2.3. The concept behind the Phillips curve states the change in unemployment within an economy has a predictable effect on price inflation. Increasing inflation decreases unemployment, and vice versa.

1.2.4. Stagflation Stagflation occurs when an economy experiences stagnant economic growth, high unemployment and high price inflation. Demand usually declines in a stagnant economy, since unemployed workers naturally consume less and businesses reduce prices to re-attract consumers.

2. Marketing Mental Models

2.1. RACI Matrix

2.1.1. A RACI matrix is the simplest, most effective means for defining and documenting project roles and responsibilities. Who is responsible? Who is accountable? Who should be consulted? And who should be informed?

2.2. Treat creativity and data as equal partners

2.2.1. In companies that are integrators, creative functions are becoming more data driven, and data-driven functions are growing more creative.

2.2.2. Two areas where we see this happening most clearly are customer experience and consumer insights.

2.3. Marketing Operating Model (MOM)

2.3.1. To drive revenue growth and improve customer experience, technology has to enable more efficient data collection, foster cross-functional collaboration, and support test-and-learn agility.

2.3.2. An effective MOM is the engine that drives continual growth.

2.3.3. At a high level, an effective MOM is made up of three parts: Integrated consumer data Decision making Distribution platforms

2.3.4. The real value of the MOM comes not just in building out these three elements but in getting them to work together.

3. Psychology Mental Models

3.1. Framing effect

3.1.1. The framing effect is an example of cognitive bias, in which people react to a particular choice in different ways depending on how it is presented; e.g. as a loss or as a gain. People tend to avoid risk when a positive frame is presented but seek risks when a negative frame is presented. Framing means the way that an information is presented such that it causes different interpretations in the mind of the listener or the responder.

3.1.2. The framing effect has consistently proven to be one of the strongest biases in decision making. The ways in which framing can be used are nearly unlimited; from emotional appeals to social pressure to priming.

4. Decision Making / Thinking Mental Models

4.1. First-Rate Intelligence

4.1.1. The test of a first-rate intelligence is the ability to hold two opposed ideas in the mind at the same time, and still retain the ability to function. one should, for example, be able to see that things are hopeless and yet be determined to make them otherwise. -F. Scott Fitzgerald

4.2. Massive Transformative Purpose

4.2.1. To solve our biggest problems, we need people to undertake big tasks. But what drives someone to take on such a difficult, uncertain process and stick with it?

4.2.2. There’s a secret to motivating individuals and teams to do great things: It’s purpose.

4.2.3. Setting out to solve big problems brings purpose and meaning to work—it gives us a compelling reason to get out of bed in the morning and face another day.

4.2.4. Peter Diamandis likes to say, “Find something you would die for, and live for it.”

4.2.5. The more we organize around massive transformative purpose, the harder we’ll work, the more dedicated we’ll be, the faster we can solve big problems—and maybe most importantly, the more fulfilled we’ll feel about the work we do.

4.2.6. In the simplest sense, an MTP is a “highly aspirational tagline” for an individual or group, like a company, organization, community, or social movement. It’s a huge and audacious purpose statement.

4.2.7. MTPs are not representative of what’s possible today; they’re aspirational and focused on creating a different future. This aspirational element is what ignites passion in individuals and groups; it’s what engages people’s hearts and minds to work together to realize their goal.

4.2.8. The competitive advantages of an MTP Having an MTP can trigger incredible outcomes, which is why high-growth organizations all tend to have them. The aspirational quality of an MTP pushes teams to prioritize big thinking, rapid growth strategies, and organizational agility As an MTP harnesses passion within an organization, it also galvanizes a community to form outside the company that shares the purpose.

4.2.9. How to begin creating an MTP Identify the who: Ask yourself who you want to impact. Identify the what: What problem do you want to take on and solve? Step one: Write down the top three items you are most excited about or get you most riled up (that you want to solve). Step two: For each of the three problems listed above, ask the following six questions and score each from 1-10. (1 = small difference; 10 = big difference)

4.3. OKR

4.3.1. Objectives and Key Results (OKR) is a framework of defining and tracking objectives and their outcomes. The philosophy behind OKR is that if the company is always reaching 100% of the goals, they are too easy. OKR’s ambitious goals are known as moonshots or stretch goals. The usual recommendation is that in average you should achieve only 60-70% of them.

4.3.2. The Components of OKRs Doerr’s formula is the best way to explain the structure of an OKR: I will (Objective) as measured by (this set of Key Results). Objectives are memorable qualitative descriptions of what you want to achieve. Objectives should be short, inspirational and engaging. An Objective should motivate and challenge the team Key Results are a set of metrics that measure your progress towards the Objective. For each Objective, you should have a set of 2 to 5 Key Results. More than that and no one will remember them.

4.3.3. Examples OKR Examples - How to write Objectives and Key results?

4.4. Inversion Thinking

4.4.1. Inversion is a way of thinking about what you want to achieve in reverse.

4.4.2. In other words, instead of only thinking forward about what you need to do to get what you want, you’d flip it in reverse and think backwards about what you don’t want to happen.

4.4.3. The inversion technique originated from German mathematician, Carl Jacobi, who made significant contributions to different scientific fields throughout his career.

4.4.4. ‘Invert, always invert.’

4.4.5. The most powerful benefit of using the inversion technique is that it will help you to avoid the bad decisions preventing you from achieving your goals.

4.4.6. Combined with forward thinking, backwards or inversion thinking could help you to unlock solutions to difficult problems that may have been holding you back for years.

4.4.7. If you’re to take anything away from inversion let it be this: Spend less time trying to be brilliant and more time trying to avoid obvious stupidity.

4.4.8. Stoicism: premeditatio malorum

5. Systems Mental Model

5.1. Chaos Theory

5.1.1. Chaos theory is a branch of study in mathematics that is directed at analyzing the behavior of dynamical systems which are substantially sensitive to initial conditions. Chaos is the science of surprises, of the nonlinear and the unpredictable. It teaches us to expect the unexpected. Chaos Theory has turned everyone’s attention back to things we once thought we understood, and shown us that nature is far more complex and surprising than we had ever imagined.

5.1.2. While most traditional science deals with supposedly predictable phenomena like gravity, electricity, or chemical reactions, Chaos Theory deals with nonlinear things that are effectively impossible to predict or control, like turbulence, weather, the stock market, our brain states, and so on. These phenomena are often described by fractal mathematics, which captures the infinite complexity of nature.

5.1.3. Many natural objects exhibit fractal properties, including landscapes, clouds, trees, organs, rivers etc, and many of the systems in which we live exhibit complex, chaotic behavior. Recognizing the chaotic, fractal nature of our world can give us new insight, power, and wisdom. For example, by understanding the complex, chaotic dynamics of the atmosphere, a balloon pilot can “steer” a balloon to a desired location. By understanding that our ecosystems, our social systems, and our economic systems are interconnected, we can hope to avoid actions which may end up being detrimental to our long-term well-being.

5.1.4. Principles The Butterfly Effect A more rigorous way to express this is that small changes in the initial conditions lead to drastic changes in the results. Unpredictability Because we can never know all the initial conditions of a complex system in sufficient (i.e. perfect) detail, we cannot hope to predict the ultimate fate of a complex system. Order / Disorder Chaos Chaos explores the transitions between order and disorder, which often occur in surprising ways. Mixing Turbulence ensures that two adjacent points in a complex system will eventually end up in very different positions after some time has elapsed. Feedback Systems often become chaotic when there is feedback present. Fractals A fractal is a never-ending pattern.

5.1.5. Movie Chaos Theory (2008)

6. Problem-solving Mental Models

6.1. Occam’s razor

6.1.1. Occam’s razor is a philosophical problem-solving principle that suggests we should avoid complexities. We have a tendency to make things more complicated than they really are; the simplest solution is often best.

6.1.2. When you’re looking at a problem, you need to ask yourself two questions: How can I simplify this? Which parts of this could I completely remove from consideration?

7. Masterlist

7.1. Mental Model Dictionary (Master List)