Shane Parrish: How to think clearer & make better decisions

0:02We often think about the big decisions, who to marry, where to live, what career. because we think about them and we take a while to think about them. These aren't spur of the moment decisions that are lingering in our head. We're filtering information. We're thinking about permutations and combinations and what ifs. And so we generally get those decisions directionally correct because we know we're thinking. But there's these ordinary moments that tend to derail us. And you can pick the best partner. You can pick the best spouse. But if you don't go home and invest in that relationship, it's not going to work.

0:32You can pick the best career. But if you don't show up and work your butt off, you're going to get fired.

0:40Welcome to Secret Leaders. Today, I'm joined by Shane Parrish. Shane spent the early part of his career entirely classified as a cybersecurity expert, and that's about all we're allowed to know. Now, as a thought leader, author, podcast host, and entrepreneur, he's aiming to help others to upgrade themselves through rigorous self-improvement strategies, looking to move away from your run-of-the-mill self-help content. He's with us today to talk about his new book, Clear Thinking, which I've just finished, which is full of simple hands-on insights you can use to optimize your decision-making. Shane's helped thousands of executives, leaders, and managers around the world learn the repeatable behaviors that improve results.

1:20So I know he's going to have plenty to offer us all today. Shane, welcome to Secret Leaders. Thanks for having me, Dan. I'm excited to be here. Before we dive into the book, I want to just know So how Farnham Street actually started. Give us the quick life story to date. Yeah. So in August 28, 2001, I started working for an intelligence agency. And as we all know, two weeks later, the world forever changed. And everybody who was working there at the time sort of got thrust into these positions of responsibility and authority and power that they weren't, you know, quite prepared for. And we had to do our best to figure it out.

2:01And so I ended up at a young age making decisions that impacted not only my team, but my country, other countries, troops in theater. And they had these really, you know, wide-ranging ramifications. And nobody had ever taught me sort of how to make decisions. And so Farnham Street started as this side project when I went around and I was like, how do I get better at this? How do I learn how to make decisions? And how do I teach myself how to do this? Because I have a responsibility to my country and have a responsibility to all the military people who are putting their lives on the line for us.

2:34And I want to do the best that I can. So the best that I can doesn't look like holding a machine gun standing on the front line. The best that I can is can I improve my decision making? And if I can, how do I go about doing that? And that was the impetus for Farnham Street. Keep in mind, at the time, I wasn't allowed a public profile. I wasn't allowed anything. If you Google Shane Parrish, you got some soap opera star from Australia in the 1990s. He didn't exist. The website was 68131-1440.blogger.com, which don't go to today because somebody's stolen this from me. But that was the original website.

3:13And it was never meant to be read by other people. It was just me writing about my reflections. Because if you think about how we learn, we actually learn through reflection. We don't learn through experience alone. So think of learning as a loop. At 12 hand, you have an experience. At the three hand, you have a reflection. At the six hand, you have a compression or abstraction. And at the nine hand, you have an action. And the action leads to experience. So you have this loop of learning. Most of us leave out the reflection part, so the learning doesn't really cement. And the reflection is, I'm going to take all this data.

3:47If you think about it like a movie, before the movie's edited, you have maybe 300 terabytes of footage. But what goes into the final movie is more like four gigabytes. And so you take these 300 terabytes of raw unrecorded footage or raw recorded footage, and you compress that into a movie. And that's what we're doing with experiences. is we're taking all this data and all this input and we're reflecting on it to figure out what matters what doesn't why does it matter what will i do differently next time and that becomes our compression that we take with us that becomes an action and so farnham street was basically just me writing about my reflections a lot of the lessons that i got it's funny because the sort of framing of the book is sort of um you know reframing self-help but there were a bunch of principles in there I found very similar to self-help.

4:40And by the way, I do like self-help and upgrading and all of the things in between is my jam. But one of the things, for example, is journaling. It's a very common self-help tool and it's also a really helpful way to get clarity. So yeah. So a lot of people do journaling to sort of figure things out in their mind and organize things. And I call that making the invisible visible. So you start writing about things and then you get your thoughts on the paper. But what you're really doing that I thought was valuable that I haven't seen people connect before is that you're learning. The act of writing is reflecting and you're reflecting on the experiences that you've had and you're drawing compressions and sort of abstractions while you're writing.

5:23So writing is also about the means by which we recognize we don't know what we're talking about. We don't fully understand something. And it's also the means by which we have new ideas, which is really interesting when you think about a world of AI when AI can write for you, what implications will that have? You know, when I started, my current company is called Heights, and it started as a newsletter. And I was going from a tech company into a news space, which was mostly around mental health and gut health. Two areas I was having personal experience with, but not a medical doctor, not a scientist, nothing.

5:57I understood this idea that because I don't know anything about it now, and because I'm not going to get to that sort of PhD level doesn't mean I can't learn the things that I need to know about it. And so I thought, what is the most practical way that I can hold myself accountable to get this knowledge? And I decided to write a newsletter. We have 160 ,000 newsletter subscribers four years in to it and a company that's making products that's doing 10 million plus in revenue, but in the first 18 months was just a newsletter. And I used it as my personal accountability, my process was, I'm going to read PubMed and what science says about brain health, mental health, and gut health.

6:35And I'm going to translate that into my own words, in millennial speak, basically, but into my own words, so in a way that I think people will understand, because it will help me make sense of it. And in that process, I came across this term that you've probably heard too, which is, when you read something, you learn it once. And when you share it, you learn it twice, which is kind of a neuroscientific principle. And I found that to be the best way to learn. And that's neuroplasticity in action. It's committing to a process of documenting the thoughts. And hey, before you know it, I still don't know as much as any doctor, but I know a ton more than a lot of people because of the process I put myself into.

7:11Totally. 100%. So let's think about that through the learning loop. Like I just talked about, you're having an experience and your experience doesn't need to be physical experience. It can be this conversation is an experience. Reading a book is an experience. Reading PubMed is an experience, you're reflecting on that experience and you're putting compressions into your newsletter. So the people consuming your newsletter are reading your compressions. And why that's important is only the expert is doing the reflection. And you have to know when you're the expert and when you're not. You have to know your circle of competence or where you're playing a game where you have an edge and where other people have an edge.

7:44And so if you're learning the compressions, it's fun. It's like learning a recipe. And so if I go home and I take a recipe that's made by a chef and I cook it and everything works well, I get a great result. I don't know why it's a great result, but I get a great result. But if something goes wrong, the chef instantly knows what happened, why it happened. Oh, you know, your heat was too high. There's too much salt in here because they've done the reflections. And so in a lot of areas of your life, you really want to consume other people's compressions. And in a lot of areas, is you really want to create your own compressions.

8:19And picking and choosing those two things are super important because you can't compress everything. You can't just reflect on everything. That doesn't make a lot of sense. Sometimes you have to, but you can't confuse the two different types of knowledge, if that makes sense. Yeah, I'm actually trying to be really smart, thinking in my head, and I can't, so I'll ask you it. But that is essentially the tagline in Varnham Street, isn't it? It's like, you know, smart people have done their thinking. Yeah, mastering the best of what other people have already figured out. That's the tagline to my life.

8:47Yeah. Yeah, there we go. God, I'd have looked great if I could have just remembered that off the cuff, but I knew it was something in that direction. I'm going to share something just before we start, which is I thought it was interesting. This sort of goes back to the point I was making on the self-help. A couple of weeks ago, I went to see one of my favorite speakers, authors, people, Eckhart Tolle, who's like a spiritual teacher, wrote The Power of Now. And I reread it. And it was interesting because I reread it. I reread it every year. And I reread it just before I reread Clear Thinking and I found it really, I don't know if you've read it, by the way, but I found it very interesting how probably the world's most popular spiritual book, which is about presence and being in the now and how to separate your thoughts from the noise and the chatter.

9:33actually you should read it because I found it extremely interesting how completely different the context of what he's saying is and the insight was actually very very similar to what you're saying which is you know how to get to the best quality thoughts which then lead to the best quality decisions and what I love about it is know your audience you know he's speaking to a certain audience a certain ways, solving a certain problem, which is more the mental health side of chatter in your head and, you know, pain and anxiety and depression and all of that stuff. And you're coming at it from a point of view of, you know, well, how do we actually clear our heads and make great decisions?

10:15The stuff is not really up for debate. There is a process. The trick is in the mastery. And I think that's what was really great about your book was the examples of the mastery of how to get there. Oh, that's interesting. I'm going to go pick up this book on the way back to the hotel tonight. I'll send it to you. It's one of my favorite books to send to people because I think it's, yeah, but that was really surprising to me. And maybe it was coincidental, juxtaposed, you know, back to back. I read that and then yours. But I think this is a good intro and framing for the lessons in the book, which is clear thinkers.

10:48I mean, if I could summarize the message in your book. It's that clear thinkers make better decisions. So the question is, how do we do that? Well, there's three components to clear thinking if you think about it. And so the first is positioning. And your position determines whether you're playing on easy mode or hard mode. The second component is managing the urges or defaults that otherwise get us into trouble. And the third component is thinking independently. And you can't really think independently unless you've done the first two things. And so I think it's really important to think about decision making and break it up into positioning, which is everything that happens before the moment of decision.

11:27And then at the moment of decision, which is managing your defaults and making the best choices possible. But often we end up, and the reason the tagline for the book is turning ordinary moments into extraordinary results, is we often think about the big decisions, who to marry, where to live, what career. And because we think about them and we take a while to think about them, these aren't spur of the moment decisions. They're lingering in our head. We're filtering information. We're thinking about permutations and combinations and what ifs. And so we generally get those decisions directionally correct because we know we're thinking.

12:01But there's these ordinary moments that tend to derail us. And you can pick the best partner. You can pick the best spouse, whatever you want to call your significant other. But if you don't go home and invest in that relationship, it's not going to work. You can pick the best career, but if you don't show up and work your butt off, you're going to get fired. You can pick the best city to live in, but if you don't engage in the culture and the environment, then it just goes to zero. So all these ordinary moments that we don't think of as decisions have the power to multiply these things that we've been taught to focus on by zero.

12:36And what happens when you multiply any number by zero? It just goes to zero. I also, I came across a quote, it wasn't by you, but I wonder how you reflect on this, which I can't tell whether it completely agrees with what you're saying or says the opposite. So let's try it, which is something along the lines of, you cannot overstate the absolute insignificance of almost everything that happens in your life. oh that's interesting i'd have to reflect on that i think the ordinary moments determine your position and your position determines whether you're playing on easy or hard mode and you really want to make your position such that you're playing on easy mode as often as possible yeah so i suppose you know at the higher level it's like there are big moments that will happen in your life um and your reflection on a quote like that would be true but the little moments are the ones that position you for those big moments.

13:29Yeah. So you're going to get angry. You're going to make these big decisions. You're going to choose a partner. You're going to choose a career. That's not going to change. But everything that goes into before that really dictates things. And maybe an example will help solidify this for people about what I mean, what goes into before and what does positioning look like. One of my kids came home with a really bad mark. And for anybody who has teenagers, you know, they just sort of shrug their shoulders, toss it at you with that teenage attitude and is like, I did my best. And I was like, oh gosh, what do I say?

13:59And I remember playing sports as a kid and, you know, all the kids quit in the car ride on the way home. They never quit at practice. They never quit when it was hard. They never quit when they failed on the field. They always quit through that conversation. So I'm super cognizant of like how I handle this situation. So I let the emotions sort of like dissipate. Then I go back to him. And I'm like, what do you mean you did your best? Explain this to me. What does it mean to do your best? And I was like, walk me through in detail. And he's like, well, okay. My test started at 10. I sat down, I scanned all the questions.

14:31I figured out which ones were worth the most points. And then I allocated my time accordingly. And I was like, great. So you think about this like most adults think about this. You think about the moment of decision. Now I want to rewind 72 hours. We're just going to rewind three sort of days for you. Now tell me, what did you do over those three days? And he's like, what do you mean? I was like, did you study? He's like, not really. I was like, did you eat healthy? He's like, not really. Did you sleep? I went to bed late every night because I was playing video games. Were you cranky? Yes. Did you pick a fight with your brother?

15:10Yes. So the position you chose to be in, you chose. All of these things are 100 % within your control. The position you chose to be in when you wrote the test was hard mode. You didn't choose to be in easy mode because if you wanted to be in easy mode, you would have studied. You would have went to bed on time. You would have eaten healthy. You wouldn't have picked a fight with your brother. You do all these things that are within your control. And that doesn't change the fact that you have to take a test at 10 a.m., but it will dramatically change the results of that test or it'll change the ease at which those results come.

15:43I actually think it's a really great example. um so relatable to anyone not just with kids but everyone's been a kid and been in that situation too um and but you can apply this to being an adult too think about working for an organization right and you're thinking about oh i want a promotion in the future and most of us just passively wait and then the opportunity for promotion comes up and then we apply it's like how do i position myself so that that promotion is a done deal it's already done start thinking a year in advance, start thinking six months in advance. What experiences do I need? Who do I need to talk to?

16:18What connections do I need to make? There's always something you can do to improve your position for tomorrow. It reminds me a little bit, I mean, your line of question was much better than this, but I can't remember a guest was reflecting on this recently. I think it's a famous Henry Kissinger scenario where someone came up and asked him, you know, or gave him the work and was like, you know, is this the best? Is this the best you can do? And they're like, of course it's the best. And he's like, yeah, okay. If you think it's the best, he's like, Well, hold on a second. It's very one minute manager if you've ever read that as well, right?

16:44It's just like so simple. You just reflect back the question. And if you've got the right type of person, they're like, fuck, no, that wasn't my best. Well, so this tells you everything, right? So that anecdote appears in the book, Clear Thinking. And this came about because I was working with somebody who was smart, but had very low standards. Smart, but lazy, if you will. And, you know, I want smart people with high standards because high standards are going to carry you through and they're going to create different results. If you're smart but lazy, you're probably just going to get average results.

17:15And that might be what you want. As long as you're consciously choosing that, there's no judgment on my part. But I was working with somebody like that and I was like, I don't want to, he sent out this and everybody's probably worked in this scenario. Everybody can relate to this. He created this really crappy first draft of a presentation, sent it out to the entire team. And he's like, what do you think? And you know, there's not a lot of thought put into it. There's enough thought that you can sort of like finagle that there's thought put into it, but the standard's really low. And what do we do as people on the other end of this?

17:45We're like, oh, here's a mistake. Here's a mistake. Here's a mistake. So we tend to correct people without thinking. We just can't help ourselves, but to like do the work. And so I noticed everybody sort of like doing the work for him. And then I just replied and I was like, is this your best work? And I didn't say anything about having read it or not. And he said no. And then so he sent me another draft and I did the exact same thing. I'm like, is this your best work? Two days later, he comes back. Well, the final presentation that he did all by himself at that point, he had taken a little bit of input from other people, was remarkably better than before.

18:20And all I said from that point on is this is the quality of work that I expect from you every time. And then that sets the bar. It sets the standard. And I find when we have low standards about things, it's because we don't really care about them. If you think in your life about what you're passionate about, what you really care about, you have high standards, you have high expectations, and that's okay. You have high expectations for your partner, you have high expectations for the people you do business with, you have high expectations for all the things that you're passionate about and all the things that you care about, and that's okay.

18:53taking this idea of high standards um there was a part of your book that i really resonated with maybe more than anything else and the reason was because maybe the timing of the idea and the power actually of how to apply this with gpt4 which is the idea of exemplars so you talk in the book about exemplars um which is an ancient concept really it's essentially you know people that you look up to who have a certain standard and way of doing something and set a good example. I think that's a fair enough explanation of it. And so they provide the best teaching on a certain subject. And so if you want to, you know, learn history, you'll pick one person.

19:35If you want to learn, you know, French, you'll learn another person and you'll learn from another person. And that can be applied across every single micro level possible. I love the idea of this sort of like personal board of advisors that was based on exemplars who, thanks to GPT-4 as well, living or dead, you could actually probably create your own group of advisors and ask them how they would behave in any given situation and sense check that you yourself are setting the high standards of people that you admire. So that was what I took from that. I don't think you specifically called out GPT-4 in it, but my mind started racing on like, holy shit, this is an amazing idea.

20:15That's actually how I'm going to practically apply it personally. I'm going to be asking Marcus Aurelius every single day and he'll be like, chill the fuck out is the answer. It's not so bad. But yeah, I'd love you to explain your chapter on exemplars and what that's all about. Well, so let's put it in context and rewind and connect it to standards. So the standards that most of us grow up with are 100 % luck. They're the standards of our parents. We're taught to follow certain rules that are unwritten about life and certain expectations. And if those are the standards we grow up with, then at what point do we acquire higher standards?

20:51Well, there's two ways to do that. One, you can work with somebody who holds you to a higher standard. You work with a master, a master at anything, whether it's an extreme athlete or a master sort of entrepreneur or CEO or professional manager, however you want to look at that. Somebody who's clearly at the top of their game, they're not going to accept low quality work from you, and they're not going to accept low quality work from themselves. And that can be a bit jarring if you're going in having only low standards. And so you create this contrast. But at some point, you take control of your own life.

21:25Like what you were born into carries you only so far, but you take over your own trajectory about where you're going next. No matter if you're starting high or low, it doesn't matter. You're in control of improving that. And what do we do if we don't get to work with, we don't luck out, so we don't get the best parents, and we don't luck out, and we don't get to work for a master? Well, you can adopt the very best people in history and recruit them to work for you, and they work for you on a personal board of directors. You can create a personal board of directors with Warren Buffett and Charlie Munger and Marcus Aurelius, dead, alive, it doesn't matter.

22:02What you're doing is you're doing two things. One, you know the standards at which those people work, think, and believe, and execute. Well, now all of a sudden, if you're running all of your judgments through them, not only are you going to see things through a different perspective, which we'll come back to in a second, but you're going to have a different standard for the quality of work that you do. And why is it important to get a different perspective onto the problem? Well, we're like that kid standing in a train. I think we all learned this in grade nine physics. It's like you're holding a ball, you're standing on a train, the train is moving at 60 kilometers an hour.

22:37How fast is the ball moving? Well, relative to you standing on the train, the ball's not moving at all. But to somebody watching the train, the ball's moving at 60 kilometers an hour. Why is this important with decision making and thinking? Well, the source of all problems in decision making and thinking is blind spots. We can't see the full picture. If we had perfect information, we would know what to do every time. It's like playing poker. If I knew everybody's hand, I would know how to play my hand perfectly every time. It doesn't mean I'm going to win every time, but I'd never make a mistake.

23:09And I think that with life, we can get a shortcut to removing blind spots. We can never fully eliminate them because that is almost impossible. But the minute we start seeing the world through other people, through Warren Buffett's eyes or through Marcus Aurelius's eyes, well, now all of a sudden, we're removing ourselves from our own head, we're looking into the problem from a different direction. And now we see the problem more clearly than we did before. We see the situation with more clarity, and we've removed blind spots. That leads us to better decisions, which lead to better outcomes. So a friend of yours, Tim Urban, who's a guest on the show recently, you know, I loved his new book and big, enormous topic to be trying to cover in a book.