Mental Models for Product Decision Making
Note: This is the second post of a three-part series I’ve made on applying mental models to product. See previous for innovation, and look forward to models for product strategy! Thanks for reading.
Decisions, decisions, decisions…
The bane of Product Managers everywhere. Every day, the balance of the various factors to consider (everything from profit/loss to how it will make someone feel) and considering the consequences make this aspect difficult yet crucial. Considering how many decisions we make a day, and their import, it’s a wonder that we humans tend to be so bad at it. Because decisions are difficult, our brains have developed shortcuts, making them easier at the moment to the detriment of the future.
These are the biases and heuristics that have become so prevalent in business as of late.
Once again, enter mental models for us to use to make better decisions more often. When we have full information and clarity, decision making is easy. Unfortunately, that’s rarely the case. Using these frameworks, however, can expose our blind spots, create guardrails against stupidity, or illuminate the best path forward.
1 — The Map is not the Terrain / See the Front
Two similar models that I’m rolling into one here.
What it is: We use maps all of the time, they are reductions meant to help us with clarity and quick decisions. The GPS in my car is wonderful for knowing where to turn, but I’m not pretending that it’s a 100% accurate representation of my town. Financial statements are maps, they reduce the thousands of transactions a business has into a view. It’s not the full representation of the health of the company. The actual terrain is different from the map, the reality is different from the representation, depending on the quality of the map. However, reality is where your decisions will play out.
What it is: “Seeing the front line” comes from military strategy. Before making a decision, a general may want to go to the front lines himself to verify reports, see the most recent conditions, and get an understanding of the factors in play. For larger organizations and their decision-makers, they could be quite removed from the front-lines but are calling the shots anyway.
Application: When you have an especially large decision to make, you need to be sure you have as complete information as possible. We know that making decisions with limited information is unwise, yet we often let abstractions drive them. Try to get as close the source as possible. Whether it’s ethnographic studies, working in customer support for a month, talking in-depth with various stakeholders. Don’t let a bad map or a lack of seeing-the-front trip you up.
2 — First Conclusion Bias
What it is: The mind often works backward. First, the conclusion and then the justification. It doesn’t allow a lot of space for alternative explanations. It seems unintuitive, but when we have to make quick decisions amongst a group (as we evolved to do) the brain acts first as president, and then as press secretary (credit Jonathan Haidt for the terminology). It’s easy for us to find a quick answer, justify it, and forget to keep looking.
Application: It’s hard to make a decision without first describing the cause of the problem. The most obvious cause might not be the best one to address (as discussed before in proximate vs root cause thinking). Once we’ve established that first conclusion, it can be nearly impossible to shake us from it. Especially if others have hopped on board with it (groupthink). Be careful moving too quickly with your conclusions when informing your decisions.
3 — Reversible vs Irreversible decisions
What it is: Some decisions are reversible, easy to go back. Others are irreversible or close to it. When making your decisions, understand which type you’re dealing with so you can approach it with the right mindset.
Application: Too often, we think reversible decisions are irreversible and spend too much time debating their importance. Yes, there is a cost to choosing a path and reversing it (see: new Coke). That should always be considered. If a decision is reversible, sometimes the best plan is to do it, test it, and re-evaluate. That’s the basis of methodologies like Agile. A friendly reminder to not be too afraid of calculated risks.
4 — Preserving Optionality
What it is: The strategy of keeping options open as long as possible until all of the uncertainties have been resolved.
Application: Do you have to make a decision? It feels like a cop-out, especially since resolving uncertainties is difficult and you’ll rarely eliminate them all. However, action for the sake of action is not always wise. It’s possible for a series of small, individually rational decisions to negatively impact you down the line. Sometimes you’re bound by ingrained processes to take action, no such thing as an empty sprint. If you can afford to delay big decisions, don’t be afraid to do so.
5 — Overconfidence Bias
What it is: An overarching tendency for humans to overrate themselves and the entities they are part of. It’s the mother of many other biases that infect our decision making. We remove ourselves from base rates (“80% of startups fail? Well not us, we’re different of course!” — everyone). We imagine ourselves as having made better predictions in the past through hindsight bias. We think we have more control over the outcome than we do.
Application: It is tempting to wave the pom-poms for your team, to encourage through the affirmation of your special abilities. Uncertainty isn’t helpful in decision-making, but factoring it in is crucial to avoiding bad decisions. Be realistic, be skeptical. Take multiple small bets instead of a few large ones. Practice reflection and self-awareness so that you’re aware of your team's true capacity.
It is tempting because there is so much pressure to “believe!” and “shoot for the stars!”, so no-one will look down on you if your excuse for failure is, “We really thought we could do it.”. Failure is still failure, though and it’s worth avoiding regardless of the reason.