The $240 MBA: How to Be Better at What Matters

@ Sprengben

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The most important skills (or really, the most valuable) are the ones that are the hardest to codify.  I think this is probably true throughout life, but it’s especially true in business.  And in business, the single most important skill is decision-making.  It won’t guarantee success, but it will certainly increase the odds.  And since we’re all constantly having to make decisions without complete information, it’s understandable to think of decision-making as an art.  But, decision-making is likely as much science as it is art.  And in fact, understanding the science of decision-making is more valuable in the business landscape than all the knowledge you would gain from an MBA combined.  And you can become a pretty good decision-maker in way less than the 18-22 months that an MBA typically takes to complete.  You can also do it for WAY less money: $240 according to my latest review of Amazon.

So, if you were going to give yourself a specialization in decision-making, here are the seven ‘course’ books you would need:

1) Poor Charlie’s Almanack by Charles Munger.  This is the Bible of mental models.  It is, to date, the most complete work on the concept of mental models I’ve ever seen. And mental models provide the framework for better decision-making. If you’re looking to improve your decision-making abilities, this is your first step.  A great book will use multiple mental models in explaining a concept.  I count a total of 95 mental models that Munger mentions in this book – incredible.

2) Seeking Wisdom by Peter Bevelin. This builds upon Poor Charlie’s Almanack by incorporating additional detail in developing mental models. Mental models include the cognitive biases that we are all subject to on a daily basis, and Seeking Wisdom has a slightly different interpretation of these biases, so it will help you to compare this book to Poor Charlie’s Almanack in building your own set of mental models.  Together, these books will give you a strong decision-making framework.

3) Principles of Economics by Greg Mankiw.  It’s hard for me to understand how you can be effective in business without at least a basic primer in Economics (unless the core concepts just come naturally to you).  The problem is that most of the texts are brutal to read, and while this text is long (and maybe boring in a few spots), it’s worth it.  It beautifully incorporates models from multiple disciplines into an understanding of economics. And it discusses the two most important mental models available: cost-benefit analysis and opportunity cost.  The price is annoying, but it’s expensive for a reason.  In order to stay in a reasonable price range, go with the 5th Edition.

4 & 5) Influence: The Psychology of Persuasion and Yes!: 50 Scientifically Proven Ways to Be Persuasive, both by Robert Cialdini.  Cialdini is now retired from Arizona State, so I don’t think you’ll be taking his courses.  But, you can read his books, and they are incredibly helpful in explaining psychology (in the context of cognitive biases).

6) Judgment in Managerial Decision Making by Max Bazerman.  Where Robert Cialdini focuses on the the cognitive bias aspect of psychology, Max Bazerman focuses on the negotiating aspect of psychology.  Negotiating tends to be an everyday thing in life, and this will help you improve the framework you use to deal with it.

7) Moonwalking with Einstein.  This will help you memorize, in checklist form, your mental models.  It makes sense to permanently store the mental models you’ve learned (which include cognitive biases) in memory. This book walks you through how to use a very old memory technique to memorize list structures, which I’d recommend you use.

So that’s it.  Seven books to becoming a better decision-maker.  Or $240 to be better at what matters.  If you want to see how I’m calculating the $240, click on the $240 MBA page.