The Personal MBA

• Definition: Grouping similar tasks.
• Example: Grouping creative tasks together and administrative tasks together in separate batches.
• Insight: Batching is a solution to the 'Cognitive Switching Penalty' (the loss in productivity from switching between tasks): the less you switch, the lower the cost.
• Insight: By focusing on similar types of tasks at once we are more efficient.
• Insight: Trying to fit administrative tasks between creative tasks kills productivity.
• Principle: Batch similar types of tasks.
• Principle: Create large blocks of uninterupted time for creative tasks (Maker's Schedule), and smaller chunks of time for meetings (Manager's Schedule).

"Any technique, however worthy and desirable, becomes a disease when the mind is obsessed with it."

- Bruce Lee

"I think it’s undeniably true that the human brain works in models. The trick is to have your brain work better than the other person’s brain because it understands the most fundamental models—the ones that do the most work."

- Charlie Munger

Biography: Born in Omaha, Nebraska 1924. Worked in family-owned grocery store. Graduated high school in 1941, and studied mathematics and physics and University of Michigan. Enlisted in the Army Air Corps and trained as a meteorologist. In 1946 he entered Harvard Law School, graduated in 1948, and spent 17 years practicing as an attorney. In 1965 he created an investment partnership. Purchased Berkshire Hathaway, textile manufacturer, in 1975 with Warren Buffet.

"Charlie can analyse and evaluate any kind of deal faster and more accurately than any man alive. He sees any valid weakness in sixty seconds. He’s the perfect partner."

- Warren Buffet

Insight: Munger never formally studied business but was relentless in self-education, in a variety of subjects, building what he called a "latticework of mental models".

"I’ve long believed that a certain system—which almost any intelligent person can learn—works way better than the systems most people use [to understand the world]. What you need is a latticework of mental models in your head. And, with that system, things gradually fit together in a way that enhances cognition. Just as multiple factors shape every system, multiple mental models from a variety of disciplines are necessary to understand that system... You have to realise the truth of biologist Julian Huxley’s idea that, “Life is just one damn relatedness after another.” So you must have all the models, and you must see the relatedness and the effects from the relatedness... It’s kind of fun to sit here and outthink people who are way smarter than you are because you’ve trained yourself to be more objective and more multidisciplinary. Furthermore, there is a lot of money in it, as I can testify from my own personal experience."

- Charlie Munger

• Definition: The tendency to pay attention to information that supports conclusions or beliefs, and ignore information that doesn't
• Insight: No one enjoys making a bad decision, so we tend to filter information after the fact that makes us feel better.
• Insight: The stronger our beliefs or opinions, the worse we are with confirmation bias, and we become more extreme.
• Insight: Paying attention to disconfirming evidence is difficult - we don't like to be wrong.
• Insight: Seeking disconfirming evidence can show us why we are wrong, or provide additional evidence that we are correct.
• Insight: People in authority positions, or hold a lot of power are more susceptible to confirmation bias as they might feel like they have a lot to lose, and they are often sheltered from this information.
• Principle: Actively look for information that proves you wrong.

• Definition: Asigning a task to someone else.
• Insight: Delegation is one of 4 ways to "do" something. Completion, deletion, delegation, deferment.
• Principle: When asigning a task, always state why: Commander's Intent. If the situation changes, the assignee will be best equiped to respond to align with the purpose.
• Principle: Asign tasks to one owner with a clear deadline
• Insight: 1. You must have someone to delegate to 2. Delegation is effective when someone can do the task 80 percent as well as you can.

• Definition: A theoretical cognitive limit on the number of stable social relationships humans can maintain at any given time.
• Insight: Beyond our limited circle (around 150 people) we start to treat people less like individuals and more like objects.
• Insight: For decisions that impact people outside our limited circle, it can be helpful to 'personalise' decisions by imagining how they might impact people within our circle.
• Principle: Imagine how those within your circle might respond if they were directly impacted by the decisions you make.

• Definition: The tendency to overestimate our own abilities, especially when you have little experience.
• Insight: The more incompetent someone is, the less they realise it.
• Insight: Being optimistic about our abilities has the benefit of increasing the likelihood that we will try something new.
• Insight: Confidence has the potential for harmful self-delusion.
• Principle: Be humble.
• Principle: Find and build relationships with honest people, not afraid to tell you when you are wrong.

"How little can be done under the spirit of fear."

- Florence Nightingale

Insight: We often freeze up due to fear, our protection mode which makes it difficult to do anything other than focus on the thing we fear.

• Definition: When others screw up we blame their character; when we screw up to attribute it to circumstance.
• Insight: Avoiding this error makes it easier to stay on good terms with colleagues.
• Insight: Persistent and consistent errors need to be resolved; otherwise it may be beneficial to give others the benefit of the doubt.
• Principle: When something isn't going as expected, try to find out as much as possible about the circumstances surrounding the behaviour.

• Insight: People with a growth mindset are more likely to keep going when facing a challenge or difficulty.
• Insight: There is nothing that you are fundamentally incapable of learning or doing. You will improve eventually with effort.

• Insight: We have a tendency to think we "should have known" an outcome would happen.
• Insight: All decisions are made with incomplete information, and you will always have more information when looking back at outcomes than when trying to predict them.
• Insight: Hindsight bias is destructive when we negatively judge ourselves or others for not knowing the unknowable.
• Principle: Do not feel bad about something you should have seen or done.
• Principle: Use past mistakes or failed predictions to focus on what you can do now.

"Self-education is, I firmly believe, the only kind of education there is."

- Isaac Asimov

• Example: Toyota uses the concept of kaizen to continuously improve systems by eliminating waste via lots of small changes.
• Insight: Small behaviours and inputs accumulate over time.
• Insight: Consistent implementation of small improvements will inevitably produce huge results.
• Insight: The more small improvements you can make over time, the better the results.

• Definition: Understanding and separating what you can control from what you can't.
• Example: Controling weight: a focus on what you can control - eating healthy food, regular exercise - and the weight will manage itself.
• Insight: Regretting actions in the past is pointless as changing the past is outside our locus of control.
• Insight: Worrying about things that are outside your control is a waste of time and energy.
• Insight: The more effective we are at separating when we can control from what we can't, the happier and more productive we are.
• Principle: Make personal goals related to actions that are within your control.
• Principle: Focus on what you can control. Let everything else go.

• Insight: Network effects are examples of autocatalysis (where the result of one process becomes the input for the next). For example, every time someone signs up for Facebook they will naturally invite their friends to join.

• Definition: The value of what you give up when you make a decision.
• Insight: You can't do everything at once.
• Insight: Whenever you choose to spend time, money or energy on something, you are choosing not to spend that time, money or energy on something else.
• Insight: Opportunity costs are often hidden, and it is hard to pay attention to what is not present.
• Insight: Spending too much time, energy or resources in analysing alternatives (opportunity costs), creates a cost.
• Principle Don't get bogged down with all options, make a decision based on currently available information.

• Insight: In any complex system, a minority of the inputs produce the majority of the output.
• Insight: Noncritical inputs are significant opportunity costs including wasted time in meetings or noncritical expenses.
• Principle: Focus on the critical inputs that produce most of the results that you want, weed out the rest.
• Principle: Find inputs that strongly align with outputs that you don't want and focus on weeding them out.

• Insight: The default time for a meeting is often 1 hour, whether or not you need it.
• Insight: We plan by using all the time we have. With deadlines approaching, we make choices and trade-offs to do what must be done to complete the task.
• Principle: Reduce meeting times.
• Reference: Ingvar Kamprad: founder of IKEA: "If you split your day into ten-minute increments, and you try to waste as few of those ten­ minute increments as possible, you'll be amazed at what you can get done."

• Insight: People are consistently bad at planning.
• Insight: There are so many unknowns when we plan.
• Insight: We underestimate completion times.
• Insight: We imagine best-case scenarios.
• Insight: We rarely include 'slack' in planning, as it is not seen as acceptable by management.
• Principle: Use plans, but do not depend on them.

• Insight: In can take 10 to 30 minutes to get focused on a task.
• Insight: A burst of focus can make it easier to get in the zone, and keep going with the task.
• Insight: The technique overcomes to challenges: (1) getting started (2) ignoring distractions.
• Insight: Procrastination or resistance to getting started can be overcome by the mindset that "it's only 25 minutes".
• Reference: Francesco Cirillo: tomato kitchen timer.

• Definition: High achievement always takes place in the framework of high expectation.
• Insight: People tend to rise to other peoples expectations of them.
• Insight: The Pygmalion Effect explains that relationships can be self-fulfilling prophecies.
• Insight: When teachers believe a student is "gifted" they would be more likely to direct more attention or support to them, compared to others they might see as "difficult". This can create self-fulfilling prophecies.
• Principle: Let people know that you expect great things from them.