Clear Horizons | A Dialogue with Shane Parrish

0:00Look, as a manager of people, as an employer, as an entrepreneur, and as even an investor in startups, I can tell you the most important thing for your business is the quality of the quality of the quality of people. just looking at random people. You're able to see the people who your friends and trusted peers and colleagues, who they trust and who they've hired in the past and who they recommend. And hiring doesn't have to be complicated. Realistically, when you have a business to run, you don't want to spend hours on hiring. You want to hire the right person as quickly as possible. That's why LinkedIn Jobs AI Assistant suggests immediately 25 great fit candidates daily so you can invite them to apply and keep things moving.

1:01Hire right the first time. Post your job for free at linkedin.com slash altature, then promote it to use LinkedIn Jobs' new AI assistant, making it easier and faster to find the top candidates. That's linkedin.com slash altature. Post your job for free. Terms and conditions apply.

1:24I have been following this guy, I feel like forever. Like he started his blog before I was blogging. It's Farnham Street, FS.blog of Shane Parrish. And his book, Clear Thinking, Turning Ordinary Moments into Extraordinary Results really is the best distillation of how to think clearly that I have read. It talks everything from mental models to what stops you from thinking clearly. You know, he's got these various little meditations or think exercises on how to find your way to the best decision. Well, I'll let him describe. He's also got a lot of great stories. He's worked for a three-letter intelligence agency.

2:05And here is Shane Parrish.

2:12this isn't your average business podcast and he's not your average host this is the james altucher show i'm excited to talk to you man long time fan i mean we talked a few years ago i don't even know if you remember that over email. I think it was like five or six years ago. Was it? Let me, let me just check because I feel like I've been reading you forever. Like when, when did you start your blog? It was at least like 15 years ago. Oh yeah. It was like 20, 2008, I think in one way or another, 2009. Yeah. And we talked a long time ago. I remember I was going to look it up actually. I just didn't have time, but I remember talking to you.

2:57Well, I've been a huge fan for forever and you have a new book out clear thinking but what got you start so clear thinking is all about decision making and examples from your life from the lives of others and you give a lot of uh criteria for clear thinking which i want to ask you about but what got you started on this path what i'm so glad we could talk like what what got you started doing your blog because you had one of the first blogs that really stood out for me well i started working at an intelligence agency in 2001. And, you know, everything changed after September 11. Nobody had really taught me how to make decisions.

3:32And yet I was thrust into sort of these positions of authority and responsibility as a necessity. It wasn't like I was, I was competent and, you know, people identified that it was like, Oh my God, we have to do all this stuff here. You're doing this now. And I felt so blindsided by this. And I felt a big sense of responsibility to not only, you know, my country and my team, but also to the troops in theater and everybody who is putting their lives on the line. And so I wanted to get better at decision making. And there's no real way to get better at decision making when you think about it. It's not like one skill.

4:07It's all these disparate little skills that you put together. So I started studying what other people were doing and how they were going about it. and I started this website and the website was anonymous because I can't have a profile at that point in time because I was working for a three-letter agency. They would have frowned upon that. I didn't have a Facebook page, no LinkedIn, nothing like that. You Google me, I didn't exist. I was some soap opera star in Australia. And I just started like dissecting what I was learning and trying to put it into practice. And the blog became sort of my scrapbook of reflecting on all these concepts that I was learning and integrating them and synthesizing them and putting them to use in real life in order to make better decisions.

4:52And can I ask, like, how did you get to the three-letter agency? Like, it's very hard to get one of those types of jobs for various reasons. I know this. And they check out a lot of things about you. Oh, yeah. I mean, at the time, the security process, it's changed a bit now. But I mean, they showed up, they interviewed my neighbors. They sort of talk to my teachers, my professors, my references. Like they go really deep on you because they want to make sure that you're, you know, you're a good person and you're trustworthy. You're trusted with national secrets and these secrets can mean the life or death to other people.

5:26And so it's really important that they go deep in that. I was either going to work there or go back into my MBA. I had no interest in really doing anything else. And this is like the hay of the dot-com bubble, right? Now I had no interest in working for any of these big companies. I really just wanted to work there because I thought it was so cool. You know, I grew up with two military parents and I had the sense of patriotism that, you know, I want to give back to my country. I want to make the world a better place. And there's an obligation. I'm so lucky to sort of be born here and get all the advantages of living here.

5:58And part of me wants to give back. And this was my way of giving back. And anybody who knows me knows that I'm not going to stand on the front lines in a conflict, firing a machine gun. That would be like dangerous to everybody. But I can give back in this way that it mixes sort of my passion and, you know, my desires and something I'm really interested in. And these problems are hard. I really like hard problems that are basically unsolvable. Yeah. And, you know, you talk a lot about, and this is throughout the history of your blog, but you really provide a concise summaries or kind of this distillation of all your thoughts in this book.

6:32But you talk a lot about mental models. You talk a lot about learning. What I find when people, there's always a lot of discussion about cognitive biases and mental models, you know, dating from Kahneman and his work and just everybody now has some opinion or thoughts on mental models. But even knowing the mental models, like that you have certain cognitive biases, doesn't protect you from them. It doesn't protect you from those biases, according to Kahneman. Like he always believed that you can't avoid them, even if you understand. Like what's a use case of knowing about mental models that's actually helped you?

7:05Well, so that's a really important point, right? And that was one thing that stuck out to me. So here's Daniel Kahneman and he spent 65 years studying cognitive biases. And at the end of it, he basically concludes, these are really useful at explaining why we do bad things or why we make mistakes, why we have blind spots, but they're not really useful at preventing them in the future. So knowledge of them does not in and of itself make for better outcomes. And so with the mental models that we've put together, these are just different lenses to see the world on. And so we have this series of books called The Great Metal Models.

7:40And the idea behind that was like create an Encyclopedia Britannica sort of type work for these things that are taught in university. If you were to sort of go to the 101 classes and you put them into use outside of their discipline. So a great example of one that I use all the time, I use it with my kids, I use it with the people I work with is, and then what? And so this is just a thinking tool that helps you think to the next step. So you're solving this problem. Well, tell me what the world looks like at this point of view. Okay. So we've solved this problem. What new problems have we created?

8:13What opportunity cost are we giving up? How do we think through this problem so that we know that we're actually making a dent in terms of what we're trying to do and we're moving towards our destination? So often we just think about solving the immediate problem. We don't think about the new problems we're creating. We don't think about the cost to solving those problems. A great example of that is most people listening to this probably work for a large company. You know, they have a software program they really hate. There's one thing about it that drives everybody insane. They replace that software program with something new and they don't ask themselves and then what?

8:45So they end up with all these new problems, new integration problems, new training problems. But we didn't think down the line before we made that choice. So it's about consciously sort of understanding what does the world look like now? And is that a better place for us? That's a really great example. I mean, a lot of times you see companies, for instance, redesigning their website just because, oh, we should be with the times or whatever, but they don't understand that they don't ask the questions you just said, like, are we really going to move forward towards whatever our corporate goal is?

9:14You know, there's a saying, if it ain't broke, don't fix it. So are they really, do they really need to redesign? They don't really question around the question. and I think a lot of that happens when relationships too like the typical problem in marriages often is that people have kids because they think that will improve the marriage and this is a huge example of what's actually the real problem that you say to yourself we need to actually create another human being in order to solve some other problem and it creates more problems in the process as you were sort of saying redesigning the website so often organizations are focused on speed and not velocity so they're focused on doing things but I mean I can go fast running around in a circle but that doesn't mean I'm getting anywhere with all that energy and so it's about applying that energy towards a direction towards a goal but how do you know what the right goal should be like a lot of people I mean this is a I'm sure you get this a lot based on the content of your blog which is someone comes up to you and says I don't know how to figure out my goal yeah I think that that's a really important question, but the problem is you have to figure it out, right?

10:20So we're often looking to other people. And when other people tell us the goal, we sort of, the way that I relate this in the book is like, we end up like Scrooge, right? Ebenezer Scrooge. And so we've read this story, Charles Dickens, we've all heard this. And what did he want? He wanted to be the wealthiest, most famous, most well-respected person in his community. And he ended up getting all of those things. But at the end of his life, what did he want? He just wanted a do-over because those things he realized, well, not only those things don't matter, but the way that he was achieving those things were mutually exclusive from living a life of meaning.

10:55And so what I advocate for people to do is sort of, you can work backwards here and let your future hindsight become your current foresight. And the way to do that is to envision yourself, close your eyes, envision yourself, you're sort of at the end of your life, you're lying in a hospital and you know it's the end. You can't see, but you can hear and you can't talk. You're in a coma, but you can hear what everybody's saying. You're surrounded by the people in your life who are close to you. And what is it they're saying about you and what do you want them to say about you? And they're not talking about the number of Twitter followers you have or how much money you have in your bank account.

11:32They're talking about whether you showed up, right? Whether you loved, whether you played life by your own terms, or you just sort of like followed what everybody else was doing. And so often we get to these ages, you know, it really dawns on people at 60, 70, that they just didn't, they weren't themselves. And there's a great book by Carl Pilmer, which is Lessons for the Living. And what he did was brilliant strategy, just went around to all these people who are close to death and say, what lessons can you teach us about living today? How do we take your hindsight and make it our foresight? And I think the way to do that is just to be conscious about those things.

12:09And that doesn't mean that it's going to be static. What you want at 20 is not going to be what you want at 50. But the process is that you think about those things annually to make sure that you're going in the right direction. But that direction has to be set by you consciously. If not, it's going to be set by everybody else. And you're just unconsciously going to be walking this path. And then at the end, hopefully you've walked the right one. But more often than not, you end up with regrets. And let's say you're listening to this and you're 65 years old and you're thinking to yourself, oh my gosh, he's right.

12:41You do this little meditation that you just said and then you have regrets. What should you do now? Well, it's never too late to improve your position, right? And so that's the thing is like, okay, well, all of that's happened. You can't go back and change the past, but you can start operating in a way that is more conducive to the things that you want. You can start making time for the things that you value. And this is one thing I do with people all the time, which is like, don't tell me your priorities. Show me your calendar. And what we say and what we do don't often match up. So if you tell me your priority is your family, well, then I should be able to see that.

13:17Are you home for dinner? Are you there for breakfast? Are you there when they need you? Do you go to the kids' soccer games? Do you have a date night with your partner or spouse? Are you putting in the effort? And that effort will show up every day. And so I think it's about matching. what do I say I want? How am I spending my time? Making sure those things align and being conscious about the things that you say that are valuable to you, making sure that you're picking them and not somebody else. So even if you're 65, you can sort of pause right now, take an hour, think about this, go for a walk, and then you can change things going forward, right?

13:52Like, I really want to apologize to this person. I, you know, maybe I've worked with a lot of CEOs who sort of work their way up the corporate ladder in a way that is mutually exclusive from developing relationships with people. It's all transactional. And often they come to realize that sort of towards the end. And it's still not too late to repair those things. And it's not too late to do something about them. I like these little meditation exercises you have, like for instance, the one you just said, where imagine, you know, close your eyes, imagine you're on your deathbed and go a little farther.

14:25Like imagine you're in a coma, but you could still hear everybody talking around you. And you have another one in the book where this lady is up for essentially the job of CEO and her rival for the job has essentially a better solution for the company than she does. And she's asking you about this. And you provide her with this mini meditation, which is imagine you own 100 % of the company and you cannot sell for 100 years, which solution would you do? And that one little insight or basically meditation exercise gave her the insight that allowed her to get the job, which is that the other person did in fact have a better solution.

15:09She acknowledged it. And her lack of ego in this and acknowledging it convinced the board that she was the right choice for CEO. and I like these little meditations because whether or not you understand all the mental models and the confusions about the puzzling aspects of learning and solving these issues, doing these meditations are helpful no matter what. So two thoughts come to mind there. One, the meditations, why they work and why they're so effective is they allow you to assume a different perspective into your problem. And by looking at the problem through a different lens, you start to see things that you missed before.

15:47Doesn't mean you get a full picture, but now you get more of the picture than you did before. So when you step outside of yourself and you imagine yourself, your future self, well, all of a sudden you're not seeing the things you see today. You're positioning yourself in the future. And this comes from physics, right? We all learn how important framing is and relativity when we're in grade nine physics. I think the example that you still use in the textbooks today is imagine you're on a train and you're holding a ball and the train is moving at 60 miles an hour and all the blinds are down. Well, how fast is the ball moving?

16:19You would look down and say, it's not moving at all. But to somebody watching the train go by, it's moving at 60 miles an hour. And so really what we're trying to do is step outside of that train and see into what's happening from a different lens. The same thing applies today. You're sitting at your desk, I'm sitting at my desk. But if we were standing on the sun, we're moving at like 18 ,000 miles an hour or something, right? So how you look into these problems matters because the source of all bad decisions and all bad outcomes is really blind spots, right? Otherwise, we would have perfect information.

16:52We would make perfect decisions. And so how do we acquire better information? And one way we do that is through these little meditations or thought experiments, however you want to think of that.

17:14look as a manager of people as an employer as an entrepreneur and as even an investor in startups i can tell you the most important thing for your business is the quality of the people you hire the best part is that great candidates are already on LinkedIn. Employees hired through LinkedIn are 30 % more likely to stick around for at least a year compared to those hired through the leading competitor. And I will tell you that the great thing about LinkedIn is that you're not just looking at random people. You're able to see the people who your friends and trusted peers and colleagues who they trust and who they've hired in the past and who they recommend.

17:57And hiring doesn't have to be complicated. Realistically, when you have a business to run, you don't want to spend hours on hiring. You want to hire the right person as quickly as possible. That's why LinkedIn Jobs AI Assistant suggests immediately 25 great fit candidates daily so you can invite them to apply and keep things moving. Hire right the first time. Post your job for free at linkedin.com slash altature. then promote it to use LinkedIn Jobs' new AI assistant, making it easier and faster to find the top candidates. That's linkedin.com slash Altachirk. Post your job for free. Terms and conditions apply.

18:33This message comes from Capital One. With the Spark Cash Plus card from Capital One, you earn unlimited 2 % cash back on every purchase and get big purchasing power so your business can spend more and earn more. Steven, Brandon, and Bruno, the business owners of SandCloud, reinvested their 2 % cash back to help build the company's retail presence. Capital One, what's in your wallet? Find out more at CapitalOne.com slash Spark Cash Plus Terms Supply. What's another good useful meditation that you found? And by the way, I'll mention one from your book. You quote Charlie Munger as saying, I need to be able to, when I'm going to argue something, I need to be able to explain it better than the person arguing the other side.

19:21I need to explain their side better than they can explain their side. Yeah, that's the one that immediately came to mind when you asked that question. Another one is sort of like, what will I regret, right? In terms of what am I doing today that I'm going to regret later on? And how do I figure that out? It's sort of like, if I were to continue down this path, is it sustainable? Is it making me the person that I want to be? am I showing up in the ways that I want to show up? And you can use that to sort of quit your job or take on a new project or start a side hustle or because not starting these things is going to be this sort of constant regret.

19:57And it's like fast forward five years. Are you going to wish you had written that book? Are you going to wish you had started that podcast or started that business or switch jobs or done these things? And I think that that's really important to think about. The other one that I like to use with my kids is how do I position myself for success? and that's about sort of like seeing the future, but you're using your own mind to sort of meditate into the future or thought experiment. Like I have a test coming up. How do I position myself so that when I show up, that test is on easy mode and not on hard mode?

20:29I like that. Or, you know, I have a bunch of kids. You could say, I'm imagining now what I will say to them based on this conversation. I could say, okay, imagine 10 years from now, you are who you are 10 years from now. What are you going to regret not doing today, 10 years from now? Yeah, that's a great one, right? And the way that I came up with this with the kids is, you know, I don't know if you have teenagers, but I have two of them. And one of them, you know, came in the door a couple months ago, storming, you know, with his shoulders down and hands me this test because I need to sign them.

21:02And it's like this terrible grade. And he's like, I did my best. And, you know, stomps by me and like slouches on the furniture. chair and I'm like, okay, I'm not going to talk to you right now. But later on that night, I was like, okay, let's talk about what does it mean to do your best, right? And explain this to me, because you told me you did your best. And this is like such an easy way out of these conversations. And so he sits down and he's like, well, you know, at 10 o 'clock when the test started, I read all the questions, I added up all the points, I focused on the questions. Like he sort of went through his little algorithm for taking tests.

21:35And then I was like, oh, I understand what you're thinking about. We do this with decision making too, right? We think about the moment of the decision and making the best decision possible. But let's rewind 72 hours. Did you study? No. Were you up late the night before cramming? Yes. Did you have a good breakfast? No. Did you argue with your brother? Yes. Were you rushed on the day of the test? Yes. So when you showed up, you were playing on hard mode, not on easy mode. Like you made it hard. You made that decision hard and you've set the circumstances by which you sat down. So yes, you did your best from 10 to 11, but doing your best is actually the position that you're in at the time you take the test.

22:15And so that's the thought experiment that you can use going forward too. If you're up for a promotion at work or anything like that, how do I position myself for success here? And that's like a forward future thought experiment that can change you. I need to acquire these skills. I need to volunteer for these projects. I need to make a closer relationship with this person because that's how we get promoted at work. Well, now I can start thinking and being proactive about the things that I'm doing instead of reactive. Yeah, in the book, you use the example of Tetris, which was a great example. So in the video game Tetris, depending on how you play, there's always a solution when the block comes down.

22:51There's always some place you could fit it, but depending on how you play it in like the one, two, or five minutes prior, it's either gonna be very easy for you because there's lots of options where you could put the falling piece or it could be very hard for you because there's going to be few options and the pile of pieces is way up high and you're going to mess up. Exactly. And that's the one thing that a lot of people miss about decision-making. It's sort of like counterintuitive having studied, if you will, like the blueprints of the people who consistently make really good decisions. I don't think that they're any smarter than the rest of us.

23:25I think that they position themselves so that almost all of their options are always good. And I know, you know, you're an investor. Look at Warren Buffett, right? He's got 150 billion in cash on the balance sheet right now. And so if the stock market goes up, he wins. And if it goes down, he wins. And if it stays the same, he wins. No matter what happens, he's in a position of strength. He's never going to be forced by circumstances into doing something he doesn't want to do. So you can also think of positioning as like the greatest aid to judgment that exists in decision making. And I like how with your kid, you said that you argue with your brother.