Higher Order Thinking - Supercharge Your Performance

You may also enjoy these articles:

• First Principles - The Foundations of Innovation

• Use Experiments to Get Your Aim, Before Firing The Cannonball

• Going Full Tilt - Decision Making Lessons From The Poker Table

---

Better decision-making is the engine room of efficiency for all organisations.

---

Introduction

When faced with making a decision, most of us only consider the immediate impact that our decision will have. We often only think in terms of the lead domino. This is called first order thinking.

Our decisions don’t operate in a vacuum and definitely don’t occur in isolation. There are almost always more wide-reaching implications and ramifications of a decision than is immediately apparent.

Human beings can be short-sighted. Once the lead domino falls, what are the impacts of all of the other dominoes falling? All of the other dominoes don’t magically disappear.

Use second order thinking to explore optionality and consequences beyond the immediate decision that you’re making. Thinking through more scenarios upfront allows you to make better quality decisions.

Orders of mental complexity

Research has identified four orders of mental complexity:

First Order Thinking:

First Order thinking tends to see causes and their direct effects – here and now tangible effects. It’s our common sense. Think superhero movies, romantic comedies or slapstick comedy such as Jackass. Everyone is capable of first order thinking and we all do it. It’s just that the majority of people never extend beyond First Order thinking.

Second Order Thinking:

Second Order thinking also sees the causes but are able to visualise the indirect effects too. This is formal, logical thinking. People can read beyond the superficial plot, narrative or joke to see hidden meaning. Those in the upper percentile of intellect and creativity are strong on Second Order thinking. Most of us mere mortals spend our time here.

Third Order Thinking:

Third Order thinking is more reserved for complex conceptual abstractions. Many leading musicians, comedians and scientists live at this level. Think of musician Jimi Hendrix, comedian Robin Williams and scientist Stephen Hawking.

Fourth Order Thinking:

Fourth Order thinking is the highest level of mental complexity, being associated with practical wisdom – a complicated interaction between general theory and practical judgement. This is where breakthrough thinking and creativity occurs, producing all-time works of art and once in a generation scientific advancement. Think Picasso, Bach and Einstein. It’s challenging for humans to attain this state for any length of time.

The basics - First Order thinking

Where we focus exclusively on resolving a question or decision at hand and don’t consider the more long-lasting ramifications or how our decision will play out in the distant. It’s called First Order thinking.

“Think about it this way – rarely does something happen with no chain of events to follow” - John Maynard Keynes

Many of the decisions that we make, particularly those that we toss and turn over at night in bed, have consequences that extend far beyond what we can see right before us.

Humans are as blind as bats. Small decisions that we make can have results that we didn’t foresee. The outcomes are not just limited to the immediate changes that we’ve decided upon – other people or situations can be affected as well.

Often, we can be caught by surprise because we didn’t think the situation through deeply enough.

“Nobody ever rises above average through making the obvious choices or accepting the most convenient, simplest answers” - Peter Hollins

Level up - Second Order thinking

We visualise all of the dominoes.

We project into the future and extrapolate a range of consequences that you can use to conduct a cost-benefit analysis for your decisions or solutions.

Second order thinking has the usual effect of making you think twice about what you’re doing and helps eliminate rash decisions.

It’s the practice of seeking out as much information as possible to make measured decisions. How will your decisions cause other dominos to fall? If you tip this domino, which other dominoes will you be unable to tip because of time and effort (opportunity cost)?

What could go wrong? How could it go wrong? Why might it go wrong?

Second order thinking allows you to project the totality of your decisions. Even if you don’t end up changing your decision because of what you determined through second order thinking, you might think through ten times as many scenarios and thus make far more informed choices than you would otherwise.

“Humans aren’t very good at predicting the future, but we can think about it”

- Peter Hollins

Second order thinking allows you to think more clearly.

Being able to project and foresee happenings on a deeper, futuristic level is hallmark of successful people and almost always turns out to be worth the extra effort.

Being a new parent

There is probably no better demonstration of the differences between first order thinking and higher order thinking than being a new parent.

Prior to your new child being born, if it is your first child, you really have no reference points for decision making and behavioural response.

You may have read a few books on parenting, observed how other parents deal with their children, received advice from your own parents and even attended birthing classes.

What you have are a lot of static truths and assumptions. Much of this information is not more than old wives tales, handed down through the generations. The developmental changes of a child are very dynamic, constantly changing.

Effectively, you have no understanding about the rest of the dominoes and how your world is about to be turned upside down. Terrifying, I know.

Enter the newborn child and everything changes. The assumptions that you had about the rest of the dominoes were completely wrong.

You now need to build new mental models and hypotheses about how your child behaves, how you need to respond and the routines that are required for the family unit to function optimally.

You think that you’ve got everything dialled in, and then everything changes again. Month after month you’re constantly required to update your models and assumptions.

When your child cries, first order thinking would maybe have you think that your child is just upset and needs to be comforted. After 30 minutes of the child still being unsettled, you need to explore further lines of inquiry.

In order to settle the child, you need to think about all of the other paths that the dominoes may fall. You’re required to consider second order effects – is the child hungry, does the child have wind, is the child teething, is the child cold. This form of scenario analysis may lead us down a completely different path.

How can you apply these techniques in your work and personal life?

Investor Howard Marks provides some guiding questions to think in a second-order fashion:

1.     How broadly will this decision affect things in the future?

2.     Which result do I think will happen?

3.     What are the chances that I will succeed, or be right?

4.     What does everybody else think?

5.     How is what I think different from everybody else?

6.     What dominoes do other people visualise falling?

Conclusion

The purpose of second order thinking is to expose alternate possibilities to inform decision-making.

When faced with the need to make a decision, most of us only consider the immediate impact that a decision will have – especially if it’s a time-sensitive or urgent one.

We can’t circumvent our human instinct of jumping to conclusions and deciding on a whim entirely, but we can be a bit more methodical about decision factors.

Think in terms of all the dominoes ahead, rather than just the lead domino. This will help you to think more clearly, making more informed choices.

Better decision-making is the engine room of efficiency for all organisations.

References:

Peter Hollins