Mental Model Posts ‘Feedback Loops’

Three Mental Models Great Managers Use

Shangri-La

Photo by Dhilung Kirat

Organizations, left unattended, move toward disorder.  The realities of Parkinson’s Law – the idea that work expands to fill the amount of time allocated to complete it – have been well documented.  So, Parkinson’s Law helps to explain why organizations naturally evolve towards disorder, and ultimately poor performance.  Managers, of course, act to correct this.  An array of mental models assist managers in working against this natural disorder, but there are three primary mental models that produce the majority of the results:  Read More »

Is There an Ideal Team Size?

Teamwork

Photo by Stuck in Customs

People are always looking for ways to get things done better or faster.  Depending on the task, that can often mean putting together teams.  Of course, a team isn’t always the best way to accomplish something.  I mean, there’s obviously no need to create a team to do something an individual could do as well or better.  However, if a team makes sense, what is the ideal team size?

Unfortunately, there’s no consensus on what the ideal team size should be.  This is probably because there just simply isn’t one.  And that, of course, is fine.  But everyone seems to have an opinion on what’s best.

Steve Jobs liked to keep his teams to no more than 100 people so that he could remember names; Peter Drucker said teams work best, as a rule, if they have three or four members (and should normally not exceed five or six); Google likes to limit teams to a max of six people; 37Signals thinks three people is the optimal team size for a product release; Reid Hoffman (of LinkedIn) would likely refer to Dunbar’s Number to substantiate groups of up to 150.  And the list could go on…  Does this mean that teams are effective at any size between three and 150 members?  It’s more likely that this simply means teambuilding is a situational exercise, and nothing more.  Read More »

How to Meet a Deadline: Mental Models Every Project Manager Should Know

univac

Photo by Stuck in Customs

In order to get things done, we often use deadlines.  This is especially the case when managing projects.  Deadlines are often created, but rarely met.  There are a lot of reasons for this, but a good portion of it can be explained by Cognitive Misjudgment.  A combination of the Over-Optimism Tendency and the Excessive Self-Regard Tendency are generally to blame when we aren’t able to meet our deadlines.  The Over-Optimism Tendency explains why we often overestimate our ability to get things done – an excess of optimism is the normal human condition – and this tends to lull us into a false sense of comfort despite an impending deadline.  Most people call this procrastination.  The Excessive Self-Regard Tendency explains why we often don’t provide for enough time to realistically meet a deadline in the first place – we constantly mis-appraise our abilities on the high side.

But there are certain ways to combat these cognitive misjudgments, and the first is following what is generally considered the standard formula for carrying out any project.  Deadlines become a whole lot easier if this formula is followed.  Read More »

How to Increase Employee Productivity: The Science of Making Work Happen

BoredEmployee Pic

Photo by 9likenave.com

Most businesses I talk to would like to figure out healthy ways to grow.  And in almost all of those businesses, that requires people (or employees).  It may simply require greater capabilities amongst current employees, or it may require adding more employees.  In either situation, it makes sense to design the organization so that each person within it can reach peak performance.  And eliciting peak performance from employees is the result of two things: training and motivation.  As Andy Grove says, “A manager generally has two ways to raise the level of individual performance of his subordinates: by increasing motivation, the desire of each person to do his job well, and by increasing individual capability, which is where training comes in.”  Read More »

But What If It Isn’t Cool?: The Story of Eric Ries and IMVU

IMVU

Photo by pixelsebi

Eric Ries, with a few others, started a company called IMVU in 2004.  As in IM (Instant Message) VU (view) – the novelty of the concept was the introduction of avatars to instant messaging.  He tells his story through the following five core principles of the Lean Startup Movement:

  1. Entrepreneurs are everywhere: in other words, the constraints to being an entrepreneur are minimal, if they exist at all.
  2. Entrepreneurship is management: or, a start-up requires a different set of management principles than a mature company does.
  3. Validated learning: One of Ries’ core concepts, basically stating that start-ups exist to learn how to build a sustainable business
  4. Build-Measure-Learn: a critical feedback loop that Ries developed – he advocates that all successful start-up processes should be geared to accelerate this feedback loop
  5. Innovation accounting: traditional accounting doesn’t properly measure what matters to him (and on this, I wholly agree with him), so he set up a different process to measure progress, set up milestones, and prioritize work.

Eric and his colleagues eventually grew IMVU to annual revenues of more than $50 million in 2011 (and some level of profitability, which he doesn’t disclose).  It’s important to note, however, that Ries is in no way shy about admitting the repeated mistakes that he and his team made at the outset.  You can read all about his adventure in The Lean Startup.  One of the more amusing issues was the unwillingness of test users to tell their friends about it.  After all, it was new to them, and they weren’t quite sure whether or not it was cool.  And as well all know, it’s totes obvi that you gotta protect your rep.

Of course, there is another way to look at what Eric did to create his organization.  Eric’s success can also be deciphered through mental models…   Read More »

Mingle with Powerful Models: Using Mental Models to Make Better Decisions

French Clock

Photo by slack12

Charlie Munger likes to say that 80-90 mental models will give you the bulk of the material you need to be a “worldly-wise” person.  Part of being worldly-wise is making good decisions, and although Charlie mentions 95 models in his book (by my count), they can each be used and combined for different purposes.

So, how do we combine them to create the ideal decision-making process?  Since I’m in love with the number 7 (figuratively), I’ve put together what I consider the seven most useful mental models in decision-making.  Good decision-making will involve an understanding of Statistics, Economics, and Psychology.  And the decision-making process becomes much easier if you take mental models from these disciplines and put them into a checklist.  To me, the following seven mental models are the best checklist available.  Read More »