Skill: 1kalin/afrexai-strategic-thinking (version 1.0.0)

--- name: afrexai-strategic-thinking description: > Complete strategic thinking & mental models toolkit. 50+ decision frameworks organized by situation type — business strategy, investing, hiring, pricing, risk, negotiations, product, and personal life. Use when facing any important decision, analyzing a situation, or building a decision culture. Includes scoring rubrics, templates, anti-patterns, and real-world application guides. --- # Strategic Thinking & Mental Models Engine The comprehensive decision-making methodology for founders, operators, investors, and leaders. 50+ mental models organized by when to use them, with templates and scoring systems. --- ## Quick Start — /decide When the user says "help me decide" or "analyze this decision": 1. Ask: **What's the decision?** (one sentence) 2. Ask: **What type?** (business / investment / hiring / product / personal / technical) 3. Ask: **Reversibility?** (easy to undo / hard to undo / permanent) 4. Ask: **Time pressure?** (minutes / days / weeks / no deadline) 5. Select the right framework(s) from the catalog below 6. Walk through step-by-step 7. Score using the Decision Quality Rubric (Phase 10) 8. Output a Decision Record (Phase 11) --- ## /8 — Quick Decision Health Check Score the current decision process (1-5 each): | Dimension | Score | Signal | |-----------|-------|--------| | Problem clarity | _ /5 | Can you state the decision in one sentence? | | Options explored | _ /5 | Have you considered 3+ alternatives including "do nothing"? | | Evidence quality | _ /5 | Data-backed or gut feeling? | | Bias awareness | _ /5 | Have you actively looked for disconfirming evidence? | | Reversibility mapped | _ /5 | Do you know the cost of being wrong? | | Stakeholders consulted | _ /5 | Has anyone challenged this? | | Second-order effects | _ /5 | What happens AFTER this decision plays out? | | Time-appropriateness | _ /5 | Are you spending the right amount of time on this? | **≥32:** Strong process — proceed with confidence **24-31:** Decent — address weak dimensions before committing **16-23:** Gaps — slow down and fill them **≤15:** Stop — you're about to wing a consequential decision --- ## Phase 1: Decision Classification Not all decisions deserve the same process. Classify first. ### Type 1 vs Type 2 (Bezos Framework) | | Type 1 (One-Way Door) | Type 2 (Two-Way Door) | |---|---|---| | **Reversibility** | Irreversible or very costly to reverse | Easily reversible | | **Process** | Full analysis, multiple perspectives, sleep on it | Decide fast, iterate, don't overthink | | **Who decides** | Senior person or group | Individual closest to the information | | **Time budget** | Hours to weeks | Minutes to hours | | **Examples** | Acquisition, firing someone, pricing model, market entry | Feature priority, tool selection, meeting format, hiring channel | **The #1 mistake:** Treating Type 2 decisions like Type 1. This creates organizational paralysis. Speed on Type 2 decisions is a competitive advantage. ### Consequence Mapping Before choosing a framework, map consequences: ```yaml decision: "[What you're deciding]" type: 1 | 2 reversibility_cost: "$X / Y hours / Z reputation damage" upside_if_right: "[Best realistic outcome]" downside_if_wrong: "[Worst realistic outcome]" time_to_know: "[When will you know if this was right?]" asymmetry: "positive | negative | symmetric" # positive = upside >> downside (bet freely) # negative = downside >> upside (be cautious) # symmetric = roughly equal (use expected value) ``` --- ## Phase 2: First Principles Thinking Before reaching for frameworks, strip the problem to fundamentals. ### The 5 Whys (Root Cause) Don't solve symptoms. Ask "Why?" five times: 1. **Why** are we losing customers? → They churn after month 3. 2. **Why** month 3? → That's when the free premium features expire. 3. **Why** do they leave when features expire? → They haven't built habits around core features. 4. **Why** haven't they built habits? → Onboarding doesn't guide them to sticky features. 5. **Why** doesn't onboarding cover this? → It focuses on setup, not value realization. **Root cause:** Onboarding design, not pricing or product gaps. ### Inversion (Jacobi Method) Instead of "How do I succeed?", ask "How would I guarantee failure?" Template: ``` Goal: [What you want to achieve] How to guarantee failure: 1. [Anti-pattern 1] 2. [Anti-pattern 2] 3. [Anti-pattern 3] 4. [Anti-pattern 4] 5. [Anti-pattern 5] Therefore, avoid: 1. [Inverted actionable rule] 2. [Inverted actionable rule] 3. [Inverted actionable rule] ``` ### Regret Minimization (Bezos) For life-altering Type 1 decisions: > "Project yourself to age 80. Which choice minimizes regret?" Use when: - Career changes (leave job to start company?) - Major financial commitments - Relationship decisions - The analytical frameworks feel inadequate because values are at stake --- ## Phase 3: The Core Mental Models Catalog ### 3.1 — Strategy & Business #### Porter's Five Forces (Industry Attractiveness) Score each 1-5 (1 = favorable, 5 = threatening): | Force | Score | Evidence | |-------|-------|----------| | Threat of new entrants | _ /5 | Barriers to entry? Capital requirements? Network effects? | | Supplier power | _ /5 | Few suppliers? Switching costs? Unique inputs? | | Buyer power | _ /5 | Few buyers? Price sensitive? Easy to switch? | | Threat of substitutes | _ /5 | Alternative solutions? Different categories solving same job? | | Competitive rivalry | _ /5 | Many competitors? Slow growth? High fixed costs? | | **Industry Score** | _ /25 | ≤10 = attractive, 11-17 = moderate, ≥18 = difficult | #### Moat Assessment (Competitive Advantage) Score each dimension 0-10: | Moat Type | Score | Evidence | Durability (years) | |-----------|-------|----------|---------------------| | Network effects | _ /10 | Each user makes product more valuable for others? | | | Switching costs | _ /10 | Pain of leaving? Data lock-in? Learning curve? | | | Brand | _ /10 | Premium pricing power? Trust? Recognition? | | | Scale economies | _ /10 | Cost advantages that grow with size? | | | Proprietary tech/data | _ /10 | Patents? Unique datasets? Trade secrets? | | | Regulatory | _ /10 | Licenses? Compliance barriers? Government relationships? | | | Distribution | _ /10 | Exclusive channels? Embedded in workflows? | | | Counter-positioning | _ /10 | Incumbent can't copy without hurting their core business? | | | **Total Moat** | _ /80 | ≥50 = fortress, 30-49 = solid, 15-29 = narrow, <15 = no moat | #### OODA Loop (Speed Advantage) For competitive situations where speed matters: 1. **Observe:** What's happening? Raw data, signals, changes. 2. **Orient:** What does it mean? Context, mental models, cultural factors. 3. **Decide:** What will we do? Select action from options. 4. **Act:** Execute. Then observe again. **Key insight:** The winner isn't who has the best strategy — it's who cycles through OODA faster. If you can observe and orient faster than competitors, you'll always be inside their decision loop. #### Wardley Mapping (Strategic Positioning) Map components by: - **Y-axis:** Visibility to user (top = visible, bottom = invisible) - **X-axis:** Evolution stage: Genesis → Custom → Product → Commodity Rules: - Build what's in Genesis/Custom (your differentiation) - Buy what's in Product/Commodity (don't reinvent wheels) - Watch for components about to shift stages (opportunity/threat) ### 3.2 — Investment & Financial #### Expected Value Calculation For any bet or investment: ``` EV = (Probability of Win × Win Amount) - (Probability of Loss × Loss Amount) Example: - 30% chance of winning $100,000 - 70% chance of losing $20,000 - EV = (0.30 × $100,000) - (0.70 × $20,000) = $30,000 - $14,000 = +$16,000 Decision: Positive EV → take the bet (if you can afford the loss) ``` **Kelly Criterion** (optimal bet sizing): ``` Kelly % = (bp - q) / b Where: b = odds received (win/loss ratio) p = probability of winning q = probability of losing (1 - p) Example: 60% win rate, 2:1 payout Kelly = (2 × 0.6 - 0.4) / 2 = 0.4 = 40% Half-Kelly (safer): 20% of bankroll ``` **Rule:** Never bet full Kelly. Half-Kelly or quarter-Kelly in practice. #### Margin of Safety (Graham/Buffett) ```yaml intrinsic_value: "$X (your best estimate)" current_price: "$Y" margin_of_safety: "(X - Y) / X × 100%" # ≥30% for stable businesses # ≥50% for uncertain/cyclical # ≥70% for speculative/turnarounds ``` **Application beyond investing:** - Hiring: Can this person do 30% more than the role requires? - Timelines: Add 50% buffer to estimates - Revenue projections: Plan for 70% of optimistic scenario - Server capacity: Provision 2x expected peak #### Asymmetric Risk/Reward The best decisions have **capped downside and uncapped upside:** | Bet Type | Downside | Upside | Action | |----------|----------|--------|--------| | Asymmetric positive | Small, known loss | Large, open-ended gain | **Take aggressively** | | Symmetric | Equal loss and gain | Equal loss and gain | Take only if +EV | | Asymmetric negative | Large, open-ended loss | Small, known gain | **Avoid or hedge** | **Examples of asymmetric positive bets:** - Angel investing ($5K loss max, 100x upside possible) - Content creation (time investment, infinite distribution upside) - Learning a skill (months invested, decades of returns) - Cold outreach (rejection cost = 0, deal value = $$$) ### 3.3 — Product & Prioritization #### ICE Scoring (Quick Prioritization) | Initiative | Impact (1-10) | Confidence (1-10) | Ease (1-10) | ICE Score | |-----------|---------------|-------------------|-------------|-----------| | Feature A | 8 | 7 | 5 | 280 | | Feature B | 6 | 9 | 8 | 432 | | Feature C | 9 | 4 | 3 | 108 | **Score = Impact × Confidence × Ease** **Calibration:** - Impact: Revenue, retention, or growth effect - Confidence: How sure are you about Impact? (data-backed = 8+, gut = 3-5) - Ease: 10 = hours, 7 = days, 4 = weeks, 1 = months #### Jobs To Be Done (JTBD) Template: ``` When [situation/trigger], I want to [motivation/job], So I can [expected outcome]. Functional job: [What they're literally trying to do] Emotional job: [How they want to feel] Social job: [How they want to be perceived] ``` **Insight:** People don't buy products. They hire them to make progress. Understand the job, and the product/feature decisions become obvious. #### Eisenhower Matrix (Time/Priority) | | Urgent | Not Urgent | |---|---|---| | **Important** | DO (crises, deadlines) | SCHEDULE (strategy, relationships, health) | | **Not Important** | DELEGATE (interruptions, some emails) | ELIMINATE (busywork, most meetings) | **Key insight:** Most people spend 80% of time in Urgent (both quadrants). Winners spend 80% in Important/Not Urgent (Q2) — that's where compounding happens. ### 3.4 — Risk & Uncertainty #### Pre-Mortem (Klein) Before committing to a plan: > "Imagine it's 6 months from now. This decision was a disaster. What went wrong?" Template: ```yaml decision: "[What we're about to do]" pre_mortem_failures: - failure: "[What went wrong]" probability: "high | medium | low" severity: "catastrophic | major | minor" prevention: "[What we'll do to prevent this]" detection: "[How we'll know early if this is happening]" ``` Run with 3+ people independently, then combine. The exercise works because it gives permission to voice concerns that "positive thinking" culture suppresses. #### Scenario Planning (Shell Method) Don't predict the future. Prepare for multiple futures. ```yaml scenarios: optimistic: name: "[Descriptive name]" assumptions: ["[Key assumption 1]", "[Key assumption 2]"] probability: "X%" our_response: "[Strategy if this happens]" leading_indicators: ["[Signal 1]", "[Signal 2]"] base_case: name: "[Descriptive name]" assumptions: ["[Key assumption 1]", "[Key assumption 2]"] probability: "X%" our_response: "[Strategy if this happens]" leading_indicators: ["[Signal 1]", "[Signal 2]"] pessimistic: name: "[Descriptive name]" assumptions: ["[Key assumption 1]", "[Key assumption 2]"] probability: "X%" our_response: "[Strategy if this happens]" leading_indicators: ["[Signal 1]", "[Signal 2]"] black_swan: name: "[Descriptive name]" assumptions: ["[Unlikely but catastrophic event]"] probability: "<5%" our_response: "[Survival plan]" hedges: ["[Protection 1]", "[Protection 2]"] ``` **Rule:** If your plan only works in one scenario, it's not a plan — it's a prayer. #### Antifragility Assessment (Taleb) Score your system/business/portfolio: | Dimension | Fragile (-2 to 0) | Robust (0) | Antifragile (0 to +2) | |-----------|-------------------|------------|----------------------| | Revenue concentration | 1 client = 80% revenue | Diversified, equal | Gets stronger with market chaos | | Operational dependencies | Single point of failure | Redundant | Failures trigger improvements | | Financial structure | Leveraged, thin margins | Cash reserves, no debt | Optionality, cash to deploy in downturns | | Knowledge/IP | Key-person dependent | Documented, distributed | Learning system that compounds | | Market position | Commodity, price-taker | Differentiated | Benefits from competitor mistakes | **Total: ≥4 = antifragile, 0 = robust, ≤-4 = fragile (fix immediately)** ### 3.5 — People & Organizational #### Circle of Competence (Munger) Before any decision in a domain: ``` Domain: [Area of decision] Inside my circle: - [What I genuinely understand from experience] - [Where I have real data and pattern recognition] - [Decisions I've made successfully before in this space] Edge of my circle: - [What I know I don't know] - [Where I'd need expert input] Outside my circle: - [What I'm completely unfamiliar with] - [Where I'd be guessing] Decision: Am I inside my circle for THIS specific decision? If no → find someone who is, or do the homework first. ``` #### Hanlon's Razor + Steel Man Before reacting to someone's behavior or proposal: 1. **Hanlon's Razor:** "Never attribute to malice what is adequately explained by incompetence" (or ignorance, busy-ness, different priorities) 2. **Steel Man:** Before arguing against a position, articulate the STRONGEST version of it. If you can't steel-man it, you don't understand it enough to disagree. #### Second-Order Thinking Every decision has consequences (1st order). Those consequences have consequences (2nd order). Template: ``` Decision: [What we're doing] 1st order effects (immediate): - [Direct result 1] - [Direct result 2] 2nd order effects (weeks/months later): - [Consequence of result 1] → [Further consequence] - [Consequence of result 2] → [Further consequence] 3rd order effects (months/years later): - [Systemic change 1] - [Systemic change 2] Counter-intuitive insight: [What becomes clear only at 2nd/3rd order] ``` **Classic examples:** - Lowering prices (1st: more customers → 2nd: competitors match → 3rd: margin compression industry-wide) - Remote work (1st: flexibility → 2nd: global talent pool → 3rd: global competition for your job) - Firing quickly (1st: team relief → 2nd: hiring bar rises → 3rd: culture of accountability) ### 3.6 — Negotiation & Persuasion #### BATNA Analysis (Fisher/Ury) Before any negotiation: ```yaml my_batna: "[Best Alternative To Negotiated Agreement — what I do if we don't agree]" my_batna_value: "$X or equivalent" their_batna: "[Their best alternative]" their_batna_value: "$Y or equivalent" zopa: "[Zone Of Possible Agreement: range between our walk-away points]" my_reservation_price: "[Minimum I'd accept]" my_aspiration: "[What I actually want]" their_likely_reservation: "[Best guess at their minimum]" power_assessment: "I have more power | balanced | they have more power" # Whoever has the better BATNA has the power ``` #### Cialdini's 6 Principles (Influence Audit) For any persuasion situation, check which levers apply: | Principle | Application | Your Move | |-----------|------------|-----------| | Reciprocity | Give first, then ask | [What value can you provide upfront?] | | Commitment/Consistency | Get small yeses first | [What's the micro-commitment?] | | Social proof | Others are doing it | [Who else has done this successfully?] | | Authority | Expert endorsement | [What credentials or evidence establish authority?] | | Liking | Build rapport first | [What genuine connection exists?] | | Scarcity | Limited availability | [What's genuinely scarce — time, spots, pricing?] | ### 3.7 — Technical & Engineering #### Build vs Buy Decision Matrix | Criterion | Weight | Build | Buy | |-----------|--------|-------|-----| | Core differentiator? | 5 | If yes: +5 | If no: +5 | | Time to market | 4 | Score 1-5 | Score 1-5 | | Long-term cost (3yr) | 4 | Score 1-5 | Score 1-5 | | Customization needed | 3 | Score 1-5 | Score 1-5 | | Team capability | 3 | Score 1-5 | Score 1-5 | | Maintenance burden | 3 | Score 1-5 | Score 1-5 | | Vendor risk | 2 | N/A (0) | Score 1-5 | | Integration complexity | 2 | Score 1-5 | Score 1-5 | **Shortcut:** If it's your core differentiator → build. If it's commodity → buy. Everything else → this matrix. #### Reversibility-First Architecture Design decisions by reversibility: | Reversibility | Examples | Approach | |--------------|---------|----------| | **Easy** (hours) | Feature flags, config, UI copy | Just do it. Iterate. | | **Medium** (days-weeks) | API design, database indexes, tool choices | Light analysis, time-box to 1 day | | **Hard** (months) | Database engine, programming language, cloud provider | Full evaluation, prototype, team input | | **Permanent** | Public API contracts, data deletion, legal agreements | Maximum rigor, external review, sleep on it | --- ## Phase 4: Cognitive Bias Defense System Biases are the #1 threat to decision quality. Active defense required. | Bias | What It Does | Defense | |------|-------------|---------| | **Confirmation bias** | Seek info that confirms what you already believe | Assign someone to argue the opposite. Search for "why [your thesis] is wrong" | | **Anchoring** | First number you hear dominates your estimate | Generate your own estimate BEFORE looking at anyone else's | | **Sunk cost fallacy** | Continue because you've already invested | Ask: "If I were starting fresh today, would I begin this?" | | **Survivorship bias** | Study winners, ignore the dead | Ask: "How many tried this and failed? What did they have in common?" | | **Dunning-Kruger** | Overconfidence in areas of low competence | Check: Am I inside my circle of competence? | | **Recency bias** | Overweight recent events | Look at 5-10 year base rates, not last quarter | | **Status quo bias** | Prefer current state even when suboptimal | Evaluate "do nothing" as an active choice with its own costs | | **Groupthink** | Agree with the room to avoid conflict | Write opinions independently BEFORE discussing. Use anonymous voting. | | **Availability heuristic** | Judge probability by how easily examples come to mind | Check actual data. Plane crashes feel common because they're memorable. | | **Loss aversion** | Feel losses 2x more than equivalent gains | Reframe: "What do I gain by NOT doing this?" | | **Narrative fallacy** | Construct stories to explain random events | Ask: "Is this a pattern or am I connecting random dots?" | | **Planning fallacy** | Underestimate time/cost for tasks | Use reference class forecasting: how long did SIMILAR projects take others? | ### Daily Bias Checklist (Before Major Decisions) - [ ] Have I actively sought disconfirming evidence? - [ ] Am I anchored to someone else's number/frame? - [ ] Am I continuing because of sunk costs? - [ ] Would I make this same choice starting from zero? - [ ] Have I considered the base rate, not just my situation? - [ ] Has someone challenged this decision? --- ## Phase 5: Decision-Making Under Uncertainty ### Confidence Calibration Before acting on any estimate: | Your Confidence | What It Should Mean | Calibration Test | |----------------|-------------------|-----------------| | 50% | Coin flip — could go either way | Would you bet your own money at even odds? | | 70% | More likely than not, but real chance of being wrong | Would you bet 2:1? | | 90% | Very confident, would be surprised if wrong | Would you bet 9:1? | | 95% | Extremely confident | Would you bet 19:1? | | 99% | Near certain | Have you been wrong at "99% confidence" before? (You have.) | **Rule:** Most people are overconfident. If you think you're 90% sure, you're probably 70% sure. Adjust down. ### Information Value Assessment Before spending time/money gathering more data: ``` Decision to make: [X] Current best guess: [Y] Current confidence: [Z%] If I gather [this information]: - Cost: [$X / Y hours] - Would it change my decision? [yes / maybe / probably not] - By how much would confidence increase? [+5% / +15% / +30%] Value of information = (confidence gain × decision stakes) - gathering cost ``` **Rule:** Don't research a $1,000 decision for 40 hours. Match effort to stakes. ### When to Decide (Timing Framework) | Situation | Optimal Decision Time | Why | |-----------|----------------------|-----| | Information depreciates quickly | Immediately (minutes) | Waiting destroys the option | | Easy to reverse | Quickly (hours) | Cost of being wrong < cost of delay | | Moderate stakes, some data | 70% information rule | At 70% confidence, decide. Waiting for 95% means you're too late. | | High stakes, irreversible | Take available time (days-weeks) | Use it all. Sleep on it. Get perspectives. | | Emotional decision | Wait minimum 24 hours | Emotions are data, not directives. Let them settle. | --- ## Phase 6: Group Decision-Making ### Structured Disagreement Protocol For team/partner decisions where people disagree: 1. **Independent write-up:** Each person writes their recommendation and reasoning (5 min, no discussion) 2. **Share simultaneously:** Everyone reveals at once (prevents anchoring) 3. **Steel man opposition:** Each person must articulate the best version of the opposing view 4. **Identify cruxes:** What's the ONE factual question where if resolved, you'd change your mind? 5. **Resolve or decide:** If crux is resolvable → get the data. If not → whoever has the best BATNA decides, or the person closest to the information decides. ### RACI for Decisions | Role | Definition | Rule | |------|-----------|------| | **R** — Responsible | Does the analysis, prepares recommendation | Max 2 people | | **A** — Accountable | Makes the final call | **Exactly 1 person** | | **C** — Consulted | Provides input before decision | Keep small (3-5) | | **I** — Informed | Told after decision is made | Everyone affected | **Common failure:** No clear A. If two people think they're the decider, no decision gets made. --- ## Phase 7: Compounding & Systems Thinking ### Compounding Mental Model Most people think linearly. Compounding is the most powerful force: ``` Linear: 1 + 1 + 1 + 1 = 4 (after 4 periods) Compounding: 1 × 1.1 × 1.1 × 1.1 × 1.1 = 1.46 (after 4 periods) But after 50 periods: Linear: 50 Compounding: 117.39 Rule of 72: Years to double = 72 / growth rate% - 10% growth → doubles in 7.2 years - 20% growth → doubles in 3.6 years - 1% daily improvement → 37x in one year ``` **Application:** Every decision should be evaluated for its compounding potential. A decision that creates a 1% improvement to a daily process is worth more than a one-time 50% improvement to an annual process. ### Leverage Points (Meadows) Where to intervene in a system, ranked by effectiveness: 1. **Paradigms** (most powerful) — Change the mindset/goals of the system 2. **Goals** — What the system is optimizing for 3. **Rules** — Incentives, constraints, punishments 4. **Information flows** — Who knows what, when 5. **Feedback loops** — Speed and accuracy of response 6. **Structure** — How components connect 7. **Parameters** (least powerful) — Numbers, budgets, quotas **Insight:** Most people intervene at #7 (adjust the budget). The highest-leverage interventions are at #1-3 (change what we're optimizing for). --- ## Phase 8: Personal Decision-Making ### The Energy Audit Not all decisions need the same energy: ```yaml high_energy_decisions: # Use frameworks, sleep on it - Career changes - Major financial commitments (>10% of net worth) - Hiring/firing - Market entry/exit - Relationship commitments medium_energy_decisions: # 30-min analysis, then decide - Quarterly priorities - Tool/vendor selection - Pricing adjustments - Content strategy low_energy_decisions: # Decide in <5 min or automate - What to eat, wear, read - Meeting attendance - Social media responses - Routine purchases rule: "Match decision energy to decision stakes. Most people overthink low-energy decisions and underthink high-energy ones." ``` ### Default Rules (Eliminate Decision Fatigue) Create personal defaults so you don't waste energy: ```yaml defaults: new_meeting_request: "Default NO unless clearly advances top 3 priorities" price_negotiation: "Never discount more than 15% — offer value instead" new_project: "Default NO unless it replaces something on current list" email_response: "Batch 2x/day. Respond in ≤3 sentences or schedule a call" investment: "Default index fund. Active only with genuine edge + margin of safety" delegation: "If someone can do it 80% as well, delegate" saying_yes: "If it's not a HELL YES, it's a no" ``` --- ## Phase 9: Decision Frameworks by Situation Quick reference — which framework for which situation: | Situation | Primary Framework | Supporting Model | |-----------|------------------|-----------------| | Should we enter this market? | Porter's Five Forces + Moat Assessment | Scenario Planning | | Should I take this job/opportunity? | Regret Minimization + Circle of Competence | Asymmetric Risk | | Which feature to build next? | ICE Scoring + JTBD | 2nd Order Thinking | | Should we invest/bet on X? | Expected Value + Margin of Safety | Pre-Mortem | | How to price our product? | *See afrexai-pricing-strategy* | Competitive Positioning | | Hiring decision? | *See afrexai-interview-architect* | Circle of Competence | | How to negotiate this deal? | BATNA + Cialdini | *See afrexai-negotiation-mastery* | | Build or buy this component? | Build vs Buy Matrix | Reversibility Assessment | | Team disagrees on direction | Structured Disagreement Protocol | Pre-Mortem | | I'm overwhelmed with options | Eisenhower Matrix + Default Rules | Energy Audit | | Business feels fragile | Antifragility Assessment | Scenario Planning | | Competitor making moves | OODA Loop + *See afrexai-competitive-intel* | Wardley Mapping | | Something failed, now what? | 5 Whys + Inversion | Sunk Cost check | | Big life decision | Regret Minimization + Second-Order | Sleep on it (24h rule) | --- ## Phase 10: Decision Quality Rubric Score any decision AFTER making it (or retrospectively): | Dimension | Weight | Score (0-10) | Weighted | |-----------|--------|-------------|----------| | Problem definition clarity | 15% | _ | _ | | Options explored (≥3, incl. "do nothing") | 15% | _ | _ | | Evidence quality (data vs. gut) | 15% | _ | _ | | Bias mitigation (actively countered?) | 15% | _ | _ | | Stakeholder input (right people consulted?) | 10% | _ | _ | | Second-order effects considered | 10% | _ | _ | | Reversibility & downside mapped | 10% | _ | _ | | Time-appropriate process | 10% | _ | _ | | **Total** | 100% | | _ /100 | **≥80:** Excellent process — outcome is in fortune's hands, not yours **60-79:** Good — minor gaps but fundamentally sound **40-59:** Mediocre — important dimensions skipped **≤39:** Poor — outcome is a coin flip regardless of luck **Critical insight:** Judge decisions by PROCESS quality, not outcomes. A good process can produce bad outcomes (variance). A bad process that produces good outcomes is dangerous — it teaches bad habits. --- ## Phase 11: Decision Record Template Document every significant decision: ```yaml decision_record: id: "DR-[YYYY-MM-DD]-[number]" date: "YYYY-MM-DD" decision: "[One sentence — what we decided]" type: "1 | 2" context: "[Why this decision was needed now]" options_considered: - option: "[Option A]" pros: ["...", "..."] cons: ["...", "..."] - option: "[Option B]" pros: ["...", "..."] cons: ["...", "..."] - option: "Do nothing" pros: ["...", "..."] cons: ["...", "..."] decision_rationale: "[Why we chose this option]" frameworks_used: ["[Framework 1]", "[Framework 2]"] key_assumptions: ["[Assumption 1]", "[Assumption 2]"] risks_accepted: ["[Risk 1]", "[Risk 2]"] success_criteria: "[How we'll know this was right]" review_date: "YYYY-MM-DD (when to evaluate)" quality_score: "X/100 (Phase 10 rubric)" decided_by: "[Name]" consulted: ["[Name 1]", "[Name 2]"] # Fill in at review_date: outcome: "[What actually happened]" lessons: "[What we learned]" would_decide_differently: "yes | no" why: "[If yes, what would we change about the PROCESS?]" ``` --- ## Phase 12: Advanced Patterns ### Barbell Strategy (Taleb) Combine extreme safety with extreme risk. Avoid the middle. ``` Portfolio: 85-90% ultra-safe (treasuries, cash, index) + 10-15% high-risk/high-reward (startups, crypto, moonshots) Time: 80% predictable deep work + 20% wild exploration/experimentation Products: Cash cow product (boring, reliable) + speculative bets (innovative, might fail) Career: Stable income source + asymmetric side projects ``` **Why no middle:** The "medium risk" zone gives you medium returns with hidden tail risk. Better to KNOW you're safe on one side and gambling on the other. ### Lindy Effect The longer something has survived, the longer it will likely survive. **Applications:** - Books: A 100-year-old book is more likely relevant in 10 years than a 1-year-old book - Technologies: SQL (50 years) will outlast this year's hot framework - Business models: Subscription model (centuries old as concept) > novel monetization - Advice: Wisdom from 2,000 years ago (Stoics, Sun Tzu) > last week's Twitter thread ### Via Negativa (Subtract, Don't Add) Often the best decision is what to REMOVE, not what to add: - Remove a feature (focus) - Remove a meeting (time) - Remove a client (sanity, team morale) - Remove a goal (clarity) - Remove a bad habit (energy) - Remove complexity (reliability) **Template:** "What's the ONE thing I could eliminate that would improve everything else?" ### Opportunity Cost Consciousness Every yes is a no to something else: ``` If I do X: - Direct benefit: [value gained] - Time cost: [hours/days/weeks] - Best alternative use of that time: [what I'm saying no to] - Opportunity cost: [value of best alternative forgone] Net value = Direct benefit - Opportunity cost ``` **If net value is negative, you're destroying value by saying yes — even though it "feels productive."** --- ## 10 Decision-Making Commandments 1. **Classify before analyzing.** Type 1 or Type 2? Match process to stakes. 2. **"Do nothing" is always an option.** Evaluate it explicitly. 3. **Seek disconfirming evidence.** The moment you like an idea, hunt for why it's wrong. 4. **Separate process from outcome.** Good process, bad outcome = fine. Bad process, good outcome = lucky. 5. **Time-box decisions.** Set a deadline. Perfectionism is a form of procrastination. 6. **Write it down.** Unwritten decisions can't be reviewed, learned from, or challenged. 7. **One decider.** Every decision needs exactly one person who makes the final call. 8. **Sleep on Type 1 decisions.** Your brain processes during sleep. Use it. 9. **Review decisions.** Quarterly, look at your decision records. What patterns emerge? 10. **Compound decision quality.** Each good decision process makes the next one better. This is the real edge. --- ## 10 Common Decision Mistakes | # | Mistake | Fix | |---|---------|-----| | 1 | Deciding too slowly on Type 2 decisions | Set a timer. If reversible, decide now. | | 2 | Never writing down assumptions | Every decision has assumptions. Write them. Test them. | | 3 | Asking for consensus instead of input | Consensus = lowest common denominator. Get input, then one person decides. | | 4 | Optimizing for one variable | Life is multi-variable. Use weighted scoring. | | 5 | Ignoring opportunity cost | "This is good" isn't enough. "This is better than alternatives" is the bar. | | 6 | Deciding when emotional | 24-hour rule for anything you'd regret. | | 7 | Copying without context | "Amazon does X" means nothing if you're not Amazon. Understand WHY they do X. | | 8 | Analysis paralysis on small decisions | Automate (defaults) or delegate anything under $500/2 hours. | | 9 | Never reviewing past decisions | Same mistakes on repeat. Quarterly decision reviews = compounding improvement. | | 10 | Conflating confidence with competence | Loud ≠ right. Data ≠ understanding. Check circle of competence. | --- ## Natural Language Commands - **"Help me decide [X]"** → Full decision walkthrough (Quick Start) - **"Score this decision"** → Decision Quality Rubric (Phase 10) - **"Pre-mortem [plan]"** → Pre-mortem exercise (Phase 4) - **"Is this inside my circle?"** → Circle of Competence check - **"Bias check"** → Daily Bias Checklist - **"Expected value of [bet]"** → EV calculation - **"Map the second-order effects"** → Second-order thinking template - **"BATNA analysis for [negotiation]"** → Full BATNA template - **"Rate this market"** → Porter's Five Forces scoring - **"How strong is the moat?"** → Moat Assessment - **"Which framework should I use?"** → Phase 9 situation lookup - **"Write a decision record"** → DR template (Phase 11)


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