The Power of Mental Models

The brain is a wonderful tool, but it is prone to misjudging information and making suboptimal decisions. As a result, people often act without fully considering why they are behaving in a certain way. Because we like to feel good about ourselves, we interpret the world using stories instead of statistics, and make instinctive judgments and then stick to them. How can we think more clearly and make better decisions—in business and in life?

Pause to Think, by Jaime Lester, an adjunct professor at Columbia Business School, is a practical, accessible introduction to mental models, teaching readers how to harness their power to think more clearly, make better decisions, and learn more effectively. The essential step in applying these concepts and frameworks, as Lester shows, is to pause. Take a moment to reflect on the options, decide on the optimal approach before launching into action, and re-examine the process regularly.

Drawing on a variety of academic disciplines as well as cognitive and behavioral research, Lester offers step-by-step templates to improve critical thinking and decision-making. He guides readers through honing their reasoning in areas including finance, economics, and statistics, and draws broader lessons for cultivating a prudent investment approach.

Lester discusses how his book showcases the power of mental models with Columbia News, along with what he’s read lately and what’s next on his night stand, and who he would invite to a dinner party.

Why did you write this book?

I initially wrote the book for my children. While I think the topic of mental models is important for everyone to understand, the frameworks are exceptionally useful for people starting their educational journeys and careers. When Columbia University Press decided to publish the book, I rewrote parts of it to reach a more mature audience, but the bulk of the content is similar to the original. Everyone can improve their thinking and decision-making processes, but the younger you start, the better.

Can you give some examples from the book of how people can improve these skills?

The title of the book, Pause to Think, is an important first step in making better decisions and learning more effectively. By inserting this step in between a stimulus and our response to it, we can engage the deeper-thinking aspects of our mind to reach better conclusions. It is key to have a consistent, reliable framework for decision-making, since the only way to avoid regret is to have confidence in the process itself; outcomes will vary, and are frequently out of our control. Similarly, when learning new material, it is best to apply a meta-analysis to the manner in which one is learning: Is this the most effective approach, or should I try another one?  

What books have you read lately that you would recommend, and why?

I have read a huge number of books on mental models, and part of the reason for writing my book is that it fills a void: There are very few how-to manuals out there that are entirely focused on the practical and applied aspects of mental models. Most books on these topics are entertaining collections of anecdotes and psychological experiments, but they lack concrete recommendations about how to improve one's life, as a result of this research. Still, if you have the time to read them and enjoy the topic, these books can be quite entertaining. In that vein, I recently read Morgan Housel's Same as Ever: A Guide to What Never Changes, and thought it was very well written.

What's next on your reading list?

The Venture Alchemists by Rob Lalka. I sat next to him at a recent book-signing event in Omaha, and bought his book afterwards. He is an entrepreneurship professor at Tulane, and delved into the archives at Harvard and Stanford to put together a history of today's technology giants and their founders. The book seems like it provides a balanced perspective on the benefits and risks of the technologies, and the good and less-good motivations of the entrepreneurs.

Summer plans?

My summer is pretty boring (in a good way), as my wife and I are mostly just working. My teenage kids will be traveling to lots of interesting places, but someone has to walk the dog!  

Which three academics/scholars, dead or alive, would you invite to a dinner party, and why?

Sticking with the topic of mental models, I would invite author, psychologist, and economist Daniel Kahneman, investor and philanthropist Charles Munger, and Leonardo da Vinci, and brainstorm about how best to teach this important topic.