Under the “Read & Grow” series, MMA organised a discussion on the theme of the book Mental Models: 30 Thinking Tools that Separate the Average from Exceptional, authored by Peter Hollins. The event took place on August 27, 2024, at the MMA Management Center.
Sangeeta Shankaran Sumesh, a Business & Leadership Coach, Speaker, Author, and Independent Director on Corporate Boards, anchored the discussions. She was joined by Mohan Kumaresan, Executive Vice President of HR at Koantek Information Systems, and Rajan Bala Venkatesan, Chief Financial Officer of LatentView Analytics.
Sangeeta Shankaran Sumesh: This book on Mental Models authored by Peter Hollins features sharp, effective, and practical models. The author emphasises the importance of mental models, quoting Charlie Munger, who likens a world without them to ‘blindfolding yourself and randomly pointing to a spinning globe’ to find Cuba. We all use mental models, consciously or not. The author has organised them into five main categories for easy understanding.
Decision Making Models
The first chapter is on Decision Making. Mental model 1 is Eisenhower Matrix: We must classify tasks as important/urgent to prioritise effectively. Focus on what’s important rather than just what’s urgent. Mental Model 2 is Visualize Your Dominoes: Consider the long-term consequences of decisions to avoid rash choices. Mental Model 3 is Reversible Decisions: Distinguish between reversible (e.g., painting a bathroom) and irreversible decisions (eg: constructing a new bath room) to enhance decision-making speed. Model 4 is Seeking Satisfaction: Identify key criteria that satisfy your needs rather than striving for perfection. Model 5 is 40-70 Principle: Aim for 70% certainty in decisions; anything less is mere guessing. Model 6 is Minimising Regret: Visualise your future self at 80—will you regret this decision? This helps in making thoughtful choices.
Models for Thinking
Chapter 2 is about Clear Thinking. Mental model 7 is Ignore Black Swans: Recognise that unpredictable, high-impact events shouldn’t dictate your decisions, as they happen very rarely. Model 8 is Equilibrium Points: Understand diminishing returns—more resources don’t always yield better results. Model 9: Regression to the Mean: Be cautious of initial impressions; wait for patterns to emerge before making judgments. Model 10 is What Would Bayes Do? Use probabilities and real events to predict outcomes effectively. Model 11 is Think Like Darwin: Embrace detail-oriented thinking and challenge your own theories. Model 12 is System Two Thinking: Engage in analytical, slower thinking to improve decision quality.
Problem Solving Models
Chapter 3 is about Problem Solving. Mental model 13 is Peer Review Perspectives: Seek external feedback to guard against biases. Model 14 is Find Your Flaws: Identify how your perspective could fail due to confirmation bias. Model 15 is Separate Conclusion from Causation: Recognise the difference between correlation and causation. Model 16 is Storytelling in Reverse: Use tools like fishbone diagrams to identify root causes. Model 17 is SCAMPER Method: It is an acronym and a creative approach to problem-solving using substitution, combination, adaptation, minimisation, repurposing, elimination, and reversal. Model 18 is First Principles Thinking: Break down assumptions to solve problems from the ground up.
Anti-Mental Models
Chapter 4: Anti-Mental Models. Model 19 is Avoid Direct Goals: Focus on what to avoid rather than only what to pursue. Model 20 is Think Like an Expert: Beware of overlooking small details that can impact outcomes. Model 21 is Avoid Your Non-Genius Zone: Concentrate on your strengths and avoid tasks that drain your energy. Model 22 is Avoid Your To-Do List: Focus on high-impact tasks and consider creating a “don’t do” list. Model 23 is Avoid the Path of Least Resistance: Exercise self-discipline and ask if your actions align with your goals.
Oldies but Goldies
Chapter 5: Oldies but Goldies. Model 24 is Murphy’s Law: What may go wrong may go wrong. So plan for the worst-case scenario. Model 25 is Occam’s Razor: Choose the simplest explanation. Model 26 is Hanlon’s Razor: Assume positive intent in others to foster better relationships. Model 27 is Pareto Principle (80/20): Focus on tasks that yield the most significant results. Focus on the 20% of the work that leads to 80% of the results. Model 28 is Sturgeon’s Law: Recognise that 90% of everything is subpar; seek the quality within. Model 29 is Parkinson’s Law: It states that work expands to fill available time; set strict deadlines to enhance productivity. Model 30 is Combat Procrastination: Develop clear agendas and priorities to stay focussed.
While the book could have given more examples, it offers valuable and practical insights. The collection of mental models serves as useful tools for both personal and professional scenarios. These tried-and-tested models have the potential to drive effective results.
Rajan Bala Venkatesan: While many of these concepts are familiar to us, it’s always beneficial to have a refresher course—especially for busy individuals like us. We tackle important and urgent tasks but often fail to prioritise. We all aspire to be productivity experts, seeking hacks to make the best use of our time.
Mohan Kumaresan: The younger generation today is more involved in choosing their life partners. They can apply mental models and consider relevant data points. For example, my sister called to tell me that her daughter had fallen in love and decided to get married. I spoke with my sister’s daughter and asked her two questions, similar to the concepts discussed in the book. The questions were: Will the person you’ve chosen to marry take care of you? In the worst-case scenario, if anything goes wrong, would you be willing to take care of him as well? This is a lifelong decision, so are you okay with that?
I also appreciate the 40/70 principle, which suggests that you shouldn’t focus on extremes. If you have data points within the range of 40 to 70, you should be able to make a decision. I work for a company related to databases, and I’m confident that many of these use cases will be incorporated into a generative AI app. If we provide the necessary data points, the app will be able to make decisions on our behalf, achieving 70 to 80% accuracy, as technology continues to understand our preferences. Human intervention will always be necessary but we all know that data is already beginning to dominate our world.
Sangeeta Shankaran Sumesh: The book discusses 30 different mental models. Which one is your favourite? Have you used any of them, and how have you benefitted?
Mohan Kumaresan: I have several favourites, but if I had to single out a couple, the first would be the practice of peer reviewing yourself. I apply this concept faithfully. We often get caught up in our tasks and feel the pressure to complete them, making it difficult to be self-critical about our work. That’s why peer review is beneficial. For example, after I passed my CA exams, I underwent training in general management and communication skills in Delhi, which is where I’m from. One of the trainers posed a simple question: as a budding professional, should you focus on your strengths or your weaknesses?
This question sparked a debate in the room, with some arguing we should focus on our strengths and others advocating for focusing on weaknesses. The trainer concluded that we should concentrate on our strengths because others will naturally point out our weaknesses. I remember it vividly because it’s so true. You must actively seek critical feedback from others.
The Diwali Cracker of an IPO
The second principle I appreciate is the Black Swan concept. We often prepare for the worst-case scenario, anticipating that something will go drastically wrong. When I joined my company as CFO, we had just begun the IPO process, a first for me. The company took a leap of faith by trusting me to run the IPO process—a dream come true for any CFO. While that sounds appealing, it was also nerve-wracking due to the numerous variables involved. We were coordinating with three sets of lawyers, three sets of merchant bankers, an accounting firm, statutory auditors, and more.
As someone new to the organisation, I had no prior knowledge of its history or legacy accounting issues. From day one, I assumed the worst. In July, my founder set a simple goal: we needed to go public before Diwali. We had six months to complete the IPO. I spent many sleepless nights worrying that I wouldn’t be able to deliver. Over time, I became more resilient and learned to break the larger problem down into manageable steps. The outcome? We successfully hit the market before Diwali, and our IPO was a huge success. The key lesson for me was that as long as you have a dependable team and can break down challenges into simpler tasks, great results are achievable.
Mohan Kumaresan: I worked for a software company for 14 years and was part of its growth journey. When I joined, the company had 100 employees, and by the time I left, we had grown to 3,200. The last five years of my tenure were marked by exceptional growth. We often had to make quick decisions and, unfortunately, made several wrong hires in the past. When we urgently needed to recruit a VP, surprisingly, we assigned the task to a junior recruiter who had never handled leadership recruitment before. I encouraged her, saying, “This is a great opportunity for you. Give it a try.” The VP she recruited ended up playing a key role in growing the company to a 3,200-member organisation. One of the lessons I learned was not to always rely on expert opinions. When things go wrong, it’s wise to consult an expert, but blindly following their advice doesn’t guarantee success.
During my time at the company, my CEO took responsibility for any wrong hiring decisions. Not many leaders are willing to own their decisions, even when mistakes are made by a group. The author of this book on Mental Models mentions that decisions should ideally be reversible, but this doesn’t always apply in life—especially when choosing a life partner. In such cases, we must gather as much data as possible and analyse it carefully to make our choice. There’s no definitive right or wrong choice; it’s ultimately our responsibility to own our decisions. We shouldn’t blame our parents for the outcomes.
Rajan Bala Venkatesan: Every Sunday evening, I review my calendar for the upcoming week and reflect on how I spent my time during the past week. This habit has significantly improved my productivity. I avoid attending meetings where participants are eager to secure senior management’s time but may come unprepared, without doing proper research. My input might only be needed for about 10% of the overall discussion, yet I often find myself sitting through these meetings. As a result, I frequently decline such requests and ask people to conduct their due diligence before inviting me.
Much of our work tends to be ‘business as usual.’ As leaders, we must learn to delegate effectively.
I also value the Pareto Principle. While it’s acceptable for people to handle 80% of routine tasks, the remaining 20% must create a meaningful impact. In my journey as a finance professional, I’ve come to realise that routine work is essential, and it’s crucial to perform it error-free and with good standards. This is a basic expectation for any professional. What truly differentiates you is the impactful 20% of your work. My expertise lies in M&A, fundraising, and IPOs, and that’s where I focus most of my time and energy.
Sangeeta Shankaran Sumesh: Mohan, you mentioned avoiding “thinking like an expert.” Often, we believe we are domain experts. How can one step aside from that and think outside the expert mindset?
Mohan Kumaresan: We once had to deliver a significant project on a tight timeline. Initially, we thought we needed Databricks skills, which are essential for migrating large volumes of data from one platform to another. Suddenly, a junior full-stack developer pointed out that moving data from one database to another only required scripting skills. Since it was written in Python, all we actually needed was a Python developer who excelled at that. In the end, we hired four full-stack developers and successfully solved the problem.
Sometimes, expert thinking can be limit us. Once you acquire expert knowledge in a particular platform, it can restrict your ability to consider other options. For example, a chemist may have in-depth knowledge in one area but might struggle to see the bigger picture.
On another occasion, we were about to hire a very senior person at a high salary. During salary negotiations, we sensed some instability in the person’s mindset, which ultimately led us to decide against the hire. As HR professionals, it’s crucial to be fearless in asking questions and drawing out the stories from interviewees.
Sangeeta Shankaran Sumesh: Everybody has blind spots. How can we overcome them?
Rajan Bala Venkatesan: Peer reviewing helps us address our blind spots. My appraisals are conducted by the CEO of the company. In the appraisal meeting, I dedicate the first half hour of the conversation to discussing areas where I could have performed significantly better (instead of asking, “What went wrong?” or “What did I do poorly?”). I send him a detailed document highlighting my accomplishments, as well as another document outlining the areas where I believe I fell short. It’s important for us to periodically look in the rearview mirror while we focus on moving ahead.
As an organisation, we place a strong emphasis on customer feedback. Nearly 30% of our variable pay is linked to this feedback, whether it relates to delivery or service. Feedback is deeply embedded in our culture and DNA. Every quarter, we send out a survey to all our stakeholders to gather insights on how we can improve. Anonymous feedback is also an excellent way to reflect on areas needing enhancement.
Sangeeta Shankaran Sumesh: Feedforward is also a good tool, rather than just waiting for feedback. Parkinson’s Law suggests that work expands to fill the time available. Even if you can complete a task in one hour, if you have five hours, you will take all five. What are your thoughts on this?
Mohan Kumaresan: I agree with that principle. The more time someone is given, the longer they tend to take to complete the work. We often procrastinate. Mental models help us make better decisions in life. For example, after getting married, I took my wife to a store to buy a saree. She spent an hour shortlisting options and then asked me which one I liked. I pointed to one saree, but she didn’t choose it; she opted for another one. This happened on several occasions.
Once, I bought her an expensive saree as a gift. She was very happy and thanked me, but then asked where I had bought it and how much it cost. She later took the saree back to the shop to exchange it, but couldn’t find a better option and returned with it. She shared this experience with me.
I’ve realised that I tend to accept the choices others make for me. Upon introspection, I understood that I am a poor decision-maker. In any decision-making process, it’s important to explore options—think of it like growing a tree: yes, no, yes, no, yes, no—until you arrive at a final yes. As someone in charge of recruitment, I encourage people to question my choices and why I selected a particular candidate.
