# Ideas Mental models worth internalising. The source count shows how often an idea appears across books—higher counts signal ideas worth understanding deeply. | Idea | Sources | What it does | |------|---------|--------------| | [[Activity-Level Analysis]] | 4 | Profitability belongs to activities, not industries | | [[Base Rates]] | 4 | Start with how often things happen in general | | [[Bayesian Probability]] | 4 | Update beliefs proportionally to evidence strength | | [[Black Box Thinking]] | 4 | Treat failure as data; build systems that capture learning | | [[Calibrated Questions]] | 2 | "How" and "What" questions that guide without commanding | | [[Chesterton's Fence]] | 2 | Understand why something exists before removing it | | [[Complex Adaptive Systems]] | 3 | Systems where agents adapt to each other—unpredictable but patterned | | [[Complements]] | 2 | Products that make yours more valuable | | [[Counter-Positioning]] | 2 | New model incumbents can't copy without damaging themselves | | [[Crystals of Imagination]] | 3 | Products embody knowledge; the economy amplifies access to others' knowhow | | [[Cynefin]] | 2 | Different domains need different approaches (simple/complicated/complex/chaotic) | | [[End-to-End Process]] | 3 | Own the whole process, not fragments; eliminate handoffs | | [[Ergodic Hypothesis]] | 2 | Time average ≠ ensemble average; what matters is your path | | [[Explore vs Exploit]] | 4 | Balance trying new things against using what works | | [[Goodhart's Law]] | 2 | When a measure becomes a target, it ceases to be a good measure | | [[Growth Mindset]] | 3 | Abilities develop through effort; failure is feedback | | [[Hanlon's Razor]] | 2 | Never attribute to malice what's explained by incompetence | | [[Inversion]] | 4 | Solve backward: avoid stupidity rather than seeking brilliance | | [[Kelly Criterion]] | 2 | Size bets proportionally to edge; never bet everything | | [[Law of Requisite Variety]] | 3 | Only variety can absorb variety—match complexity to environment | | [[Little's Law]] | 1 | Cycle time = work in progress / throughput | | [[Loss Aversion]] | 7 | Losses hurt ~2x more than equivalent gains feel good | | [[Marginal Gains]] | 3 | Break problems into parts; improve each by small amounts | | [[Mimetic Desire]] | 3 | We want what others want; desire is imitative, not autonomous | | [[Multi-Armed Bandit Problem]] | 1 | Balance exploration and exploitation dynamically | | [[Network Effects]] | 4 | Value increases as more people use it—winner-take-most dynamics | | [[OODA Loop]] | 2 | Observe → Orient → Decide → Act; speed of iteration wins | | [[Optimal Stopping]] | 2 | When to stop searching and commit (37% rule) | | [[Optionality]] | 7 | Prefer choices that keep options open; asymmetric upside | | [[POSIWID]] | 4 | The purpose of a system is what it does, not what it claims | | [[Process Power]] | 2 | Operational excellence that takes years to replicate | | [[Process vs Outcome]] | 6 | Judge decisions by quality of thinking, not results | | [[Recognition Primed Decision Making]] | 2 | Experts pattern-match, then mentally simulate | | [[Scale Economies]] | 3 | Unit costs decline as volume increases | | [[Scale Economies Shared]] | 4 | Pass scale savings to customers; create compounding loyalty flywheel | | [[Second-Level Thinking]] | 3 | Ask "and then what?"—first-level thinking is consensus | | [[Secretary Problem]] | 1 | Explore first 37%, then pick first option better than all explored | | [[Self-Image]] | 2 | Performance equals self-image; change identity to change results | | [[Skin in the Game]] | 3 | Only trust those who bear consequences of their advice | | [[Switching Costs]] | 2 | Friction that keeps customers from leaving | | [[Systems Thinking]] | 7 | See interconnections, feedback loops, and delays—not just events | | [[Tacit Knowledge]] | 5 | Knowledge you can only get from doing, not reading | | [[Tactical Empathy]] | 2 | Understand their world to influence their decisions | | [[The Barbell Strategy]] | 3 | Combine extreme safety with small high-risk bets; avoid the middle | | [[The Five Focusing Steps]] | 2 | Identify constraint → exploit → subordinate → elevate → repeat | | [[The Value Stick]] | 3 | Strategy = raise WTP or lower WTS; capture the spread | | [[Theory of Constraints]] | 4 | System output is limited by one bottleneck; fix that first | | [[Via Negativa]] | 4 | Improve by removing, not adding; less is often more | | [[Viable System Model]] | 2 | Five functions every organisation needs to survive |