1. While the rest of us are chasing victory, the best in the world know they must avoid losing before they can win. It turns out this is a surprisingly effective strategy.
2. If there is a tagline to my life, it is “Mastering the best of what other people have already figured out,” and this book is a tribute to that belief.
3. Time is the friend of someone who is properly positioned and the enemy of someone poorly positioned. When you are well positioned, there are many paths to victory. If you are poorly positioned, there may be only one. You can think of this a bit like playing Tetris. When you play well, you have many options for where to put the next piece. When you play poorly, you need just the right piece.
4. It doesn’t matter what position you find yourself in right now. What matters is whether you improve your position today. Every ordinary moment is an opportunity to make the future easier or harder. It all depends on whether you’re thinking clearly.
5. Never forget that your unconscious is smarter than you, faster than you, and more powerful than you. It may even control you. You will never know all of its secrets.
6. In the space between stimulus and response, one of two things can happen. You can consciously pause and apply reason to the situation. Or you can cede control and execute a default behavior.
7. So our first step in improving our outcomes is to train ourselves to identify the moments when judgment is called for in the first place, and pause to create space to think clearly.
8. There’s nothing stronger than biological instincts. They control us often without us even knowing. Failing to come to terms with them only makes you more susceptible to their influence.
9. Here’s how each essentially functions: The emotion default: we tend to respond to feelings rather than reasons and facts. The ego default: we tend to react to anything that threatens our sense of self- worth or our position in a group hierarchy. The social default: we tend to conform to the norms of our larger social group. The inertia default: we’re habit forming and comfort seeking. We tend to resist change, and to prefer ideas, processes, and environments that are familiar.
10. The social rewards for going with the crowd are felt long before the benefits of going against it are gained. One measure of a person is the degree to which they’ll do the right thing when it goes against the popular belief. However, it is easy to overestimate our willingness to diverge from the crowd, and underestimate our biological instinct to fit in.
11. Princeton professor Robert George wrote, “I sometimes ask students what their position on slavery would have been had they been white and living in the South before abolition. Guess what? They all would have been abolitionists! They all would have bravely spoken out against slavery, and worked tirelessly against it.” 1 No, they wouldn’t have. They may understandably want to send that signal now when it’s safe to do so, but back then they would have likely behaved the same most everyone else did at the time.
12. The only way to outperform if you’re doing undifferentiated work is to work harder than everyone else.
13. Imagine a team of ditchdiggers working with their hands. A slight variation in the amount of soil moved per hour is barely perceptible. Your work is indistinguishable from that of the person next to you. The only way to move more dirt is to dig for longer.
14. Within this paradigm, the ditchdigger who takes a week off to experiment and invent the shovel seems crazy. Not only do they look like a fool for taking a risk, but their cumulative production falls behind for every day they are not digging. Only when the shovel comes along do others see its advantage. Success requires shamelessness. So too does failure.
15. Doing something different means you might underperform, but it also means you might change the game entirely. If you do what everyone else does, you’ll get the same results that everyone else gets. Best practices aren’t always the best. By definition, they’re average.
16. Lou Brock might have put it best when he said, “Show me a guy who’s afraid to look bad, and I’ll show you a guy you can beat every time.” In other words, someone who’s possessed by the social default is easy to defeat.
17. The inertia default pushes us to maintain the status quo. Starting something is hard but so too is stopping something. We resist change even when change is for the best.
18. “Once our minds are set in a direction, they tend to continue in that direction unless acted upon by some outside force.”
19. The good news is that the same biological tendencies that make us react without reasoning can be reprogrammed into forces for good.
20. The more time you spend with people, the more likely you start to think and act as they do.
21. The way to improve your defaults isn’t by willpower but by creating an intentional environment where your desired behavior becomes the default behavior.
22. Joining groups whose default behaviors are your desired behavior is an effective way to create an intentional environment.
23. Our defaults work off deeply ingrained biological tendencies— our tendencies for self- preservation, for recognizing and maintaining social hierarchies, and for defending ourselves and our territory. We can’t simply know these tendencies exist and then will them out of existence. On the contrary, the feeling that willpower is all it takes to remove these forces is one of the tricks they use to keep us under their control.
24. To stop our defaults from impeding good judgment, we need to harness equally powerful biological forces. We need to take the same forces that the defaults would use to ruin us and turn them to our advantage. Chief among them is the force of inertia.
25. Establishing rituals is the key to creating positive inertia. Rituals focus the mind on something other than the moment. They can be as simple as taking a quick pause before responding to someone’s point of contention at work. One of my old mentors used to tell me, “When someone slights you in a meeting, take a deep breath before you speak and watch how often you change what you’re about to say.”
26. One effective question to ask yourself before you act is, “Will this action make the future easier or harder?”
27. My grandfather (and many others) used to say, “If you find yourself in a hole, the first thing you need to do is stop digging.”
29. No successful person wants to work with a chronic victim. The only people who want to work with victims are other victims.
30. Know thyself.—INSCRIPTION ON THE TEMPLE OF APOLLO AT DELPHI
31. Emotional intensity is far less important in the long run than disciplined consistency. Inspiration and excitement might get you going, but persistence and routine are what keep you going until you reach your goals.
32. Confidence also Comes from How You Talk to Yourself More dreams die from a lack of confidence than a lack of competence. But while confidence is often a byproduct of our accomplishments, it also comes from how you talk to yourself.
33. Self- confidence is also the strength to accept hard truths. We all have to deal with the world as it is, not as we want it to be. The quicker you stop denying inconvenient truths and start responding to difficult realities, the better.
34. SELF- ACCOUNTABILITY, SELF- KNOWLEDGE, SELF- CONTROL, and self- confidence are essential to exercising good judgment. Here are a couple examples of how they work together.
35. Suppose you know from experience that you’re susceptible to social pressure. To protect yourself from the influence of the social default, you decide to implement a safeguard. You form a rule for yourself: never say yes to something important without thinking it over for a day.
36. Practicing this safeguard isn’t very enjoyable. Putting someone on hold for a day might be uncomfortable.
37. As simple as they seem, automatic rules for common situations get results. We’ll explore automatic rules in the next chapter.
38. It is inevitable if you enter into relations with people on a regular basis… that you will grow to be like them…. Place an extinguished piece of coal next to a live one, and either it will cause the other one to die out, or the live one will make the other reignite…. Remember that if you consort with someone covered in dirt you can hardly avoid getting a little grimy yourself.—EPICTETUS, Discourses
39. Few things are more important in life than avoiding the wrong people. It’s tempting to think that we are strong enough to avoid adopting the worst of others, but that’s not how it typically works.
40. We unconsciously become what we’re near. If you work for a jerk, sooner or later you’ll become one yourself. If your colleagues are selfish, sooner or later you become selfish. If you hang around someone who’s unkind, you’ll slowly become unkind. Little by little, you adopt the thoughts and feelings, the attitudes and standards of the people around you.
41. Few people realize that exceptional outcomes are almost always achieved by people with higher- than- average standards.
42. Champions don’t create the standards of excellence. The standards of excellence create champions.
43. The best teachers expect more from their students and from themselves. And more often than not, the students rise to meet those expectations. The best leaders expect more from people; they hold them to the same standards they hold themselves— a higher standard than most would otherwise know is possible.
44. When we accept substandard work from others, it’s for the same reason: we’re not all in. When you’re committed to excellence, you don’t let anyone on your team half- ass it. You set the bar, you set it high, and you expect anyone working with you to work just as hard and level up to what you expect or above. Anything less is unacceptable.
45. Masters of their craft don’t merely want to check off a box and move on. They’re dedicated to what they do, and they keep at it. Master- level work requires near fanatical standards, so masters show us what our standards should be.
46. Working with a master firsthand is the best education; it’s the surest way of raising the bar. Their excellence demands your excellence. But most of us aren’t lucky enough to have that opportunity.
47. THERE ARE TWO COMPONENTS TO BUILDING STRENGTH by raising the bar: (a) Choose the right exemplars— ones that raise your standards. Exemplars can be people you work with, people you admire, or even people who lived long ago. It doesn’t matter. What matters is they make you better in a certain area, like a skill, trait, or value.
48. In the previous section, we discussed something most people never think about: if you don’t curate the people in your life, the people who end up surrounding you will be there by chance and not by choice. That group includes your parents, your friends, your family, your coworkers. Sure, your high school friends might be great examples of character and acumen, but odds are they’re average. Sure, your parents might be some of the smartest businesspeople in the world, but odds are they’re not. It’s not that you should remove these people from your life, though; controlling your environment just means intentionally adding exemplars into the mix.
49. As Peter Kaufman once told me, “No technique has been more responsible for my success in life than studying and adopting the good models of others.”
50. One of the biggest mistakes that I see people make is they don’t want to learn from someone who has a character blemish or a worldview that doesn’t align with theirs.
51. “I shall never be ashamed of citing a bad author if the line is good.” Or, as Cato the Elder put it, “Be careful not to rashly refuse to learn from others.” Don’t throw away the apple because of a bruise on the skin.
52. The only person you’re competing with is the person you were yesterday. Victory is being a little better today. **
53. Bad habits are easy to acquire when there is a delay between action and consequence. If you eat a chocolate bar or skip a workout today, you’re not going to suddenly go from healthy to unhealthy. Work late and miss dinner with your family a couple nights, and it won’t damage your relationship. If you spend today on social media instead of doing work, you’re not going to get fired. However, these choices can end up becoming habits through repetition and accumulate into disaster.
54. The formula for failure is a few small errors consistently repeated.
55. There are two ways to manage your weaknesses. The first is to build your strengths, which will help you overcome the weaknesses you’ve acquired. The second is to implement safeguards, which will help you manage any weaknesses you’re having trouble overcoming with strength alone.
56. THERE ARE MANY INBUILT BIOLOGICAL VULNERABILITIES that can impede good judgment: sleep deprivation, hunger, fatigue, emotion, distraction, stress from feeling rushed, and being in an unfamiliar environment are just some examples. We can’t avoid finding ourselves in these conditions from time to time. But we can implement safeguards to protect us from our defaults when we are.
57. Safeguards are tools for protecting ourselves from ourselves— from weaknesses that we don’t have the strength to overcome.
58. Purging your home of all junk food is an example of one safeguarding strategy: increasing the amount of “friction” required to do something that’s contrary to your long- term goals.
59. My favorites include prevention, creating rules for yourself, making checklists, shifting your frame of reference, and making the invisible visible. Let’s talk about each strategy.
60. The first kind of safeguard aims at preventing problems before they happen. One way to do this is to avoid decision- making in unfavorable conditions. Stress, for instance, is a big contributor to bad decisions. Some studies have shown that stress short- circuits the deliberation process— it undermines the systematic evaluation of alternatives that’s needed for effective decision- making.
61. Alcoholics Anonymous has a helpful safeguard for its members. They call it HALT— an acronym that stands for Hungry, Angry, Lonely, and Tired. When you feel like having a drink, they say, ask yourself whether any of these conditions apply. If so, deal with the real problem— hunger, anger, loneliness, or fatigue— instead of reaching for a drink.
62. Daniel Kahneman, the godfather of cognitive biases and thinking errors, he revealed an unexpected way we can improve our judgment: replacing decisions with rules.
63. When it comes to your health, just like many other elements of your life, environment determines behavior. Your environment makes one path easier than another.
64. It’s easier to make healthy food choices if the only foods available to you are good for you. It’s also easier to stick to a consistent pattern of choices if you’re in your familiar operating environment. When you’re in an unfamiliar environment, it’s harder to maintain your familiar patterns of behavior, which is why a lot of people stop exercising or eating healthy when they travel.
65. Your environment isn’t just your physical surroundings. It also includes people. Sometimes it’s hard saying no to someone.
66. We’re wired in a way that makes us want to be liked by others, and we’re afraid that saying no to someone will make them like us less. Saying no to someone repeatedly can be even more difficult. We might say no when our friend offers us a sugary beverage after a workout one day, but if he does it three days in a row, we cave. That’s only human.
67. In a quirk of psychology, people typically don’t argue with your personal rules. They just accept them as features of who you are. People question decisions, but they respect rules.
68. Kahneman told me his favorite rule was never to say yes to a request on the phone. He knows that he wants people to like him, so he wants to say yes in the moment, but after filling up his schedule with things that didn’t make him happy, he decided to be more vigilant about what he agrees to do and why. When people ask him for things over the phone now, he says something along the lines of, “I’ll have to get back to you after I think about it.” Not only does this give him time to think without the immediate social pressure, but it also allows a lot of these requests to just drop away because people choose not to follow up. He rarely gets back to any of these people and says yes.
69. Another safeguarding strategy is to increase the amount of effort it takes to do things that are contrary to your goals. I used to find myself checking my email whenever I have a second. I’d check it before I got out of bed, on the walk home from work, in line at the grocery store.**
70. If there were a recipe for accumulated disaster, it would be giving the best of ourselves to the least important things and the worst of ourselves to the most important things.
71. Checklists, for instance, offer a simple way to override your defaults. Pilots go through a preflight checklist every time they fly. Surgeons go through preoperative checklists every time they operate. You might have a packing checklist every time you travel. In each of these cases, the checklist acts as a safeguard, forcing us to slow down whatever we’re doing and go back to basics.
72. ONCE YOU HAVE reprogrammed your defaults to create space for clear thinking, you must master the skill of decision- making.
73. Decisions are different from choices. If you casually select an option from a range of alternatives, you’ve made a choice. If you react without thinking, you’ve made an unconscious choice. But neither of these is the same as a decision. A decision is a choice that involves conscious thought.
74. That process is about weighing your options with the aim of selecting the best one, and it’s composed of four stages: defining the problem, exploring possible solutions, evaluating the options, and finally making the judgment and executing the best option. We will discuss each of these components in detail throughout this chapter.
75. When the stakes are low, inaction hurts you more than speed. Sometimes it’s better just to make a quick choice and not spend time deliberating
76. Why waste time when action is inconsequential and its effects are easily reversed? For example, if there are two identical squat racks in the gym and both are momentarily open, it makes no difference which one you take. If you wait and decide, they’ll both be taken by someone else. Just choose either one.
77. When the stakes are higher, though, speed can hurt you. If an action could have a major impact on your life or your business and its effects can’t be reversed, you must decide and not merely choose.
78. In these cases, the magnitude of the potential losses makes careful decision- making a worthwhile investment of your time. In these cases, evaluate the options and decide. Don’t just choose.
79. The next few sections describe some tools for reasoning better when making decisions. They won’t solve every decision- making problem, because no tool is right for every job; each has its uses and limitations. You need multiple tools in your toolbox. Otherwise, you end up solving the wrong problems. As the old adage says, “If the only tool you have is a hammer, you tend to see every problem as a nail.”
80. “What would have to be true for this problem not to exist in the first place?” The way you define a problem changes what you see.
81. A mentor of mine once taught me that the best way to avoid finding the perfect solution to the wrong problem at work, when time allows, is to hold two separate meetings: one to define the problem, and one to come up with the solution.
82. One way to keep meetings short and avoid the signaling that comes from repeating information that everyone knows is simply asking everyone, “What do you know about this problem that other people in the room don’t know?”
83. Remember that writing out the problem makes the invisible visible. Write down what you think the problem is, and then look at it the next day. If you find yourself using jargon in your description, it’s a sign that you don’t fully understand the problem. And if you don’t understand it, you shouldn’t be making a decision about it.
84. SAFEGUARD: Use the test of time. Test whether you’re addressing the root cause of a problem, rather than merely treating a symptom, by asking yourself whether it will stand the test of time. Will this solution fix the problem permanently, or will the problem return in the future? If it seems like the latter, then chances are you’re only treating a symptom.
85. You can put your energy into short- term solutions or long- term solutions but not both. Any energy that’s channeled toward short- term solutions depletes energy that could be put into finding a long- term fix.
86. ONCE YOU’RE CLEAR ON THE PROBLEM, IT’S TIME TO THINK of possible solutions— ways of overcoming the obstacles to get what you want. The way to come up with possible solutions is by imagining different possible futures— different ways the world could turn out.
87. Luckily, there’s a way to convert the hindsight of tomorrow into the foresight of today. It’s a thought experiment that psychologists call premortem. The concept isn’t new, it originates in Stoic philosophy. Seneca used premeditatio malorum (“ the premeditation of evils”) to prepare for the inevitable ups and downs of life. The point isn’t to worry about problems; it’s to fortify and prepare for them.
88. Imagining what could go wrong doesn’t make you pessimistic.
89. “Failure comes from a failure to imagine failure.”
90. THE 3 + PRINCIPLE: Force yourself to explore at least three possible solutions to a problem. If you find yourself considering only two options, force yourself to find at least one more.
91. SAFEGUARD: Imagine that one of the options is off the table. Take each of the options you’re considering, and one at a time, ask yourself, “What would I do if that were not possible?”
92. SAFEGUARD: Come up with Both- And options. Try to find ways of combining the binary. Think not in terms of choosing either X or Y, but rather having both X and Y.
93. This is an important aspect of leadership and problem-solving in general: you have to pick one criterion above all.
94. Most information is irrelevant. irrelevant. Knowing what to ignore—separating the signal from the noise—is the key to not wasting valuable time. Think, for example, of investment decisions. The best investors know which variables probabilistically govern the outcomes, and they pay attention to those. They don’t ignore everything else, but focusing primarily on those variables allows them to filter massive amounts of information very quickly.
100. The quality of your decisions is directly related to the quality of your thoughts. The quality of your thoughts is directly related to the quality of your information. Many people treat all sources of information as if they’re equally valid. They’re not. While you might value getting everyone’s opinion, that doesn’t mean each opinion should be equally weighted or considered.**
101. SAFEGUARD: Run an experiment. Try something out to see what kinds of results it yields.
102. An experiment is a low-risk way of gathering important information. For example, if you want to know whether people will pay for something, try to sell it before you even create it.
103. That’s what my friends at Tuft & Needle did. They were one of the first companies to ship foam mattresses directly to consumers’ homes. They shared an incredible story with me over coffee one day, about their early days. In order to validate their idea, they set up a landing page, bought some Facebook ads, and started taking orders.
104. They didn’t even have a product or a company yet; they just wanted to see if people would buy foam mattresses from them. After a few days of receiving orders, they had all the proof they needed that people would buy their product. They refunded all the orders and officially started their company. While this example may be a bit unorthodox, there are many ways in which experimenting can help determine whether there’s sufficient demand for a product or service.
105. Experts can increase the accuracy of your information and decrease the time it takes to get it. Getting even one expert’s advice can cut through a lot of confusion and help you quickly formulate and/or eliminate options.
106. Experts don’t treat all requests for help equally, though. Some requests really don’t feel good to receive. Usually these are requests of the tell-me-what-I-should-do type. Often these people haven’t done the work ahead of time, they just want you to decide for them.
107. Remember: the goal isn’t to have someone tell you what to do; rather, it’s to learn how an expert thinks about the problem, which variables they consider relevant, and how those variables interact over time.**
108. THE STOP, FLOP, KNOW PRINCIPLE: Stop gathering more information and execute your decision when either you Stop gathering useful information, you First Lose an OPportunity (FLOP), or you come to Know something that makes it evident what option you should choose.
109. When failure is expensive, it’s worth investing in large margins of safety. A margin of safety is a buffer between what you expect to happen and what could happen. It’s designed to save you when surprises are expensive.
110. A margin of safety is like having insurance. If you know in advance you won’t need to make a claim this year, it’s a waste of money to buy insurance. The problem is that you don’t know in what year you’ll need to make a claim, so you buy it every year. It might seem like a waste of money in years when nothing happens, but it shows its real value in years when something does.
111. Building a margin of safety means giving yourself as much cushioning and coverage in the future as possible. It’s a way of preparing yourself for the widest range of possible future outcomes—and protecting yourself against the worst ones.
112. TIP: The margin of safety is often sufficient when it can absorb double the worst-case scenario. So the baseline for a margin of safety is one that could withstand twice the amount of problems that would cause a crisis, or maintain twice the amount of resources needed to rebuild after a crisis.
113. For example, if you want to feel financially secure even if you lose your job, you can estimate how long it will take you to gain employment again, and then save enough to live off savings for double that amount of time.
114. However, if you have a lot of expertise and data, you can reduce your margin of safety yet further. Here’s an example: Warren Buffett aims to buy stocks that are 30–50 percent less than their true value. So he has a 30–50 percent margin of safety on stocks. But he’ll pay close to a dollar on the dollar for stocks that he understands well. So there’s only maybe a 20 percent margin of safety on the stocks he’s the most confident in.
115. One of Warren Buffett’s core tenets for buying a business is that if he doesn’t understand it, he doesn’t buy it. In other words, if he doesn’t have enough information to calculate a margin of safety, he doesn’t invest at all.
116. Remembering that I’ll be dead soon is the most important tool I’ve ever encountered to help me make the big choices in life. Because almost everything—all external expectations, all pride, all fear of embarrassment or failure—these things just fall away in the face of death, leaving only what is truly important. Remembering that you are going to die is the best way I know to avoid the trap of thinking that you have something to lose.
117. At some point my kids figured out that it was easier to solve a maze backward than forward, especially if the maze is harder or more complicated than usual. Something about starting with the end in mind, they realized, makes it easier to decide which path to take. Life in general works similarly.