Second Order Thinking
The ability to think through problems to the second, third or nth order, what we can call second-order thinking for short—is a powerful tool that supercharges your strategic thinking ability.
First-order thinking is easy and fast – This happens when we’re looking to solve the immediate problem without considering the consequences. For example, I’m tired so lets skip workout today.
Whereas Second-order thinking is much more deliberate – It is thinking in terms of time and ripple effects of a decision. We have to ask ourselves the question “What after that”. This means thinking about the consequences of repeatedly missing workouts over time and using that insight to inform your decision. If you do this you’ll probably workout more regularly.
First-level thinking looks pretty similar and almost everyone will reach the same conclusions. Therefore, the path to out-thinking other people can’t come from just first-order thinking. It must come from second-order strategic thinking. Extraordinary decisions come from seeing things that other people can’t yet see.
How to improve your ability in second order thinking :
- Before making any decision, always ask yourself “And then what?”
- Think through time — What would be the consequences of this decision in 10 hours? 10 days? 10 months?
- Identify your decision, think through and write down the consequences. If you review these regularly you should be able to help calibrate your thinking.
- When using these steps to think about business decisions, ask further questions like – How will my employees react to this? What would my competitors likely do? What about the vendors and suppliers? Most probably the answer would be – little to no impact, but before making important decisions you would want to understand the immediate and second-order consequences.
A lot of the extraordinary things in life are the direct result of situations or decisions that are first-order negative, but second order positive. So just because things look like they have no immediate payoff, doesn’t mean its not worth taking a shot. All it means is that you’ll probably have less competition if the second order consequences are positive because almost everyone who only evaluated the first order consequence of the decision won’t commit to it.
Second-order strategic thinking takes a lot of deliberate work and ofcourse it’s not easy to think in terms of systems, interactions, and time. However, doing so is a really smart way to separate yourself from the masses.
