CHECKLISTS
Helpful for achieving goals, making choices, solving problems,evaluating what is likely to be
true or false etc.
Use notions
- Use the big ideas that underlie reality
- Understand what something really means
- Simplify
- Use rules and filters
- Know what I want to achieve
- Find and evaluate alternatives
- Understand consequences and their consequences on the whole
- Quantify
- Search for and base things on evidence
- Think things through backward
- Remember that big effects come from large combinations of factors
- Evaluate the consequences ifI'm wrong
What is the issue?
- What's the question? What is this really about?
- What's the essence or nub of the issue? What is then the key question?
- Relevant? Solvable? Important? Knowable? Utility - applicability?
- Do I understand what the subject is all about? In order to have an opinion on a subject I need
some relevant data and basic knowledge about the subject, otherwise just say:"I don't know".
- Is my judgment here better than others?
- What must I predict here and is it predictable?
- Is a decision needed? What happens if I don't deal with this? Is this something I can do
anything about? Should "I" do this?
- Over what period of time am I considering this issue? Where am I at present?From whose
point ofview?
- Simplify by deciding big "no-brainer questions" first and beg infrom where I am.
Understand what it means
- Translate words and ideas in terms I understand. Do I understand what words and statements
really mean and imply? Does it mean anything? Will it help me make useful predictions on
what is likely to happen?
- Do I understand how and why something works and happens? What is it doing? Why does
it do that? What is happening? How and why is this happening? What is the consequence of
this (observation, finding, event, experience...)?
- Definitions and implications?
Filters and Rules
- Use filters incl. rules and default rules -what test(s) can I make?
- Adapt to my psychological nature, abilities, advantages, and limitations
- Consider values and preferences and therefore priorities and what I want toavoid
What do I specifically and measurable want to achieve and avoid and when and why?
- What future "value" do I want toachieve? Target numbers? Target effects? Time horizon?
- Assume I have already reached my target. What would this imply in numbers and effects?
What must then have been achieved? Is it (target) reasonable? Is it reasonable if I reverse
this to the present?
- Do I have ways to measure to what degree my goal is being achieved? Key variables or
components of yardstick?
- If I achieve this what will happen? Do I want that to happen?
- Can I break my goal into short-term goals with deadlines?
- What is my real reason for doing this? Is it because I want to or because I have to? Have I
stated my goal from internal and external realities or am I biased now or influenced by some
psychological forces?
- Can I express my goal in a way that makes it easier to see how it is going tobe achieved?
- Is this the true goal for what I want to achieve?
What is the cause of that?
- To achieve my goal I must understand what causes my goal to be achieved
- What is the equation for goal and what evidence do I have for that?
- What don't I want to achieve? What causes non-goal and what can I do to avoid that? What
must I not do or what must I avoid?
- What variables influence the system? What are the critical forces and variables, the ones
that account for the main outcome? What is the key unknown? What is the certainty with
which I can evaluate, optimize ... the different variables?
- Which variables are dependent on other variables (or situation, environment,context,
timing, behavior) and which ones act independently of each other?
- What force causes a variable to be achieved? What produces the force(s)? Are there short
and long-term forces? What is their relative strength? How do they combine and interact
and what are the effects? How can I get many forces to operate together in the same
direction? What lack of force would destroy the system? What produces this force? How
predictable are they? What can the forces in place rationally expect to cause?What forces
are temporary and which ones are permanent? How will the system change as the forces
that act on the variable change?
- How resistant is the system to a change in the variables and/or forces? What are the likely
wanted and unwanted short- and long-term consequences (on numbers and effects)of
changes (up/down) - scale, size or mass, strength, intensity, length, time horizon, environment,
participants etc. - in the variables or forces? What happens when a number of small causes
operate over a long time? What are the consequences if a force acts on the variable over a long
time? Which force could change it? What is needed to create a critical mass? What forces
when added can create a critical mass? How? Will something else happen
when I change a variable or force? What must happen for a force to change? Can a change
produce other consequences (observe that I am interested in effects on thewhole system and
the final outcome)? Does a change in one variable make a dramatic difference in
outcome? Will the properties also change? What are the consequences if the relation
between the variables changes? What is the change point? Barriers? Catalyst?Tipping
point? Inflection point? Break point? Limits? Is there a time lag before effects happen?
Feedback? What can speed up the cause? What are the critical points when the effects get
reversed? What can I change in the equation and what can others change? How?Who?
When? Which variables must I change to achieve goal? How can I measure the amount of
change? Degree of sensitivity if I change the assumptions? Effects on goal and path? What
will happen if I hold one variable constant? If I at the same time increase one variable and
decrease another? Net effect? If I change one variable or force at a time? What is it in the
environment that can change the situation? What other advantages and disadvantages can
I achieve if I optimize one of the variables? What must happen to cause a change in outcome?
Is it still a variable if I change the conditions?
- Are there exceptions to the equation and why? What conditions are required to achieve
goal? Has my goal different cause short-term and long-term? Is the cause time-dependent?
Can I deduce the cause by observing the effects? Have I looked upon the systemfrom
different angles and viewpoints? What does the measurement of the subject depend on?
- What is the major constraint that limits the goal from being achieved?
What available alternatives do I have to achieve my goal?
- Judge alternatives in terms of goal, subjectin question, rules and filters, cause and effect,
human behavior, evidence, counter evidence, simplicity and opportunity cost ofmoney,
time, other resources, effort, understanding, risk and mental stress.
- What evidence (incl. models) do I have that these alternatives are most likely to achieve
goal?
- Are they depending on time horizon or event?
- What are the likely consequences of each action? What possible outcomes canhappen?
Likelihood? How desirable is each consequence?
- Do I forego any future opportunities if I make a specific action now?
What are the consequences?
- Find out which alternative are most likely to achieve my goal by estimating their likely
consequences
- If I do this, what will happen? Why will this not happen?
- What are the likely (logical) wanted and unwanted (or unintended) consequences
(quantitative and qualitative) and consequences of consequences (immediate and over the
course of a long period) of each alternative!event (proposition) factoring in relevant variables?
- What are the different scenarios and outcomes that can happen? What is likelyto happen
short and long-term based on the evidence?
- What can help me make predictions on consequences or if something is likely to be true
or false?
- What must happen for the goal to be achieved? How likely is it that the necessary events
will happen and happen to me? What does the probabilities favor? What will happen if I
reverse the proposition?
- What are the uncertainties that can significantly influence the outcome? What unintended
consequences are there due to repeating effects, complications... ?Is the net effect positive?
Does the consequences predict anything else? What else does this mean?
- What are the consequences if this is true or false?
- Have I considered the whole system from different viewpoints? Have Iconsidered social,
financial, physical and emotional consequences? What are others likely to do?What are my
experiences of earlier behavior? What happens when others do the same?
Bias
- Is there any reason for bias due to self-interest or psychological influences that may cause
misjudgment?
- Is this a biased statement or a fact? What are factual judgments and what are value
judgments?
- How reliable is he? Is he competent enough to judge? Credentials? What is his purpose with
this? Does he have any motive to lie? How does he know that this is true?
The hypothesis
- Based on what I want to achieve; test statement implied by goal or statement for
consequences.
- For every alternative ask: Is this alternative likely to achieve my goal(true)? For proposition
ask: Is this proposition likely to be true?
- How can I test (testability) if this is true? Can I try to prove it is false before I try to see if
it's true?
- What do I need to know if! shall test this statement? I must first find out the equation for
what causes the statement to be true so I know what is the most important Ineed to know
the future true outcome of and then search for the evidence for and against that this will
be achieved. What is the statement that should be proved?
- What is the simplest hypothesis?
Look for evidence and judge the evidence
- How likely is it that the key cause (for goal,non-goal, and proposition) will be achieved?
- When evaluating statements or true/false, look for meaning, motives, causes,consequences
and evidence for and against.
- If this were true what would the consequences then imply? Are the consequences of it not
being true illogical or unbelievable? Does it have any predictability?
- How and where can I find the representative evidence if this is true?What is given? What
are unquestionable truths? Will the test or other ways of measure give the same results when
repeated (reliable)? Can I test for consequences (verifiable)? Is the evidencebased on what
is known and have I interpreted the data correct (valid)? What evidence do Ihave? Evidence
against? What grounds do I have for accepting that evidence? Weight of evidence?What is
the quality of the evidence? How credibleisthe evidence? Dependent on time,
environment? Too small sample? Does the statement agree with the available evidence?
Does it violate any scientific laws or laws of nature?
- What representative information do I have? What is happening by observation?Can I do an
experiment to confirm my guess? Does it agree with experiment?
- What is the track record (case rate, base rate frequency, variability,average rate, degree of
randomness, my own experiences, environment, players, and other relevant factors for the
case) on what happened (worked and not) in the past? Is there any reason to believe that
this record isn't representative for what is likely to happen in the future?What can make
the future a lot different than the past? What's been permanent and what hasn't?
- How long can this continue? What is the major cause(s) now? What force(s) can make it
continue, initiate a change, or stop it and why? Is it likely?
- If I get evidence that is the opposite of my previous convictions I must ask:How does this
happen? What is going on here? What evidence do I have? What grounds do I have for
accepting the evidence?
Disprove my (or others) conclusion by thinking like a prosecutor
- Consider causes for misjudgments
How can I test and prove that my idea and conclusion is wrong? What reasons arethere
why I might be wrong? Where can I find the evidence that suggest I am wrong? How
credible is my evidence? What facts and evidence disagree with my conclusion/idea?
What major assumptions have I built the case on? Are they built on reality? Are their
consequences logical? Has anyone proved that my assumptions are right? What are the
consequences if my beliefs and assumptions are wrong?
What have I ignored or overlooked? Better alternatives? Have I ignored evidence? Have I taken
into account the limitations when humans are involved? What factors are uncertain and
why? Have I just projected present trends? What have I misinterpreted? Have Iused the right
definitions? Did I consider and combined all the relevant factors? Have I used the
appropriate measure/yardstick? Did I go wrong in the measurement? Have I confused cause
and correlation? What about if my goal is shaped by what I believe is true butit isn't? Are there
random or systematic errors? What other causes can explain my results? Have I considered the
whole system and that interacting parts sometimes canvary in unexpected and unwanted
ways?
- Bias for my own ideas? Is my ego getting in the way ofmaking an intelligent decision? Will
I really beat the historical average/record? Have I looked for contrary effects?
- What do I not see? What is the significance of this? Does an inversion of the assumption
lead to a logical absurdity? Is the opposite more likely? Is there any contrary evidence? What
evidence can prove it is false (or not achieving goal)? What experimental (or experience,
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observation... ) evidence are there that it's false? More evidence infavor of that? What
causes it to be false?
- Meaning? Can I show that the consequences ofit being true are unbelievable?What is the
implied effect if! trace it out mathematically? Would the opposite of the statement be more
likely? If yes, the proposition is probably false.
What is the downside?
- How can I be hurt? What could possible gowrong? What can turn this into a mistake?
What would the consequences be?
- How often do things go wrong? Surprise factors? What can happen that will dramatically
change the outcome?
- What is the worst thing that could happen - the nightmare scenario? How likely is that?
What will I do if it does? What are the consequences if things go from bad to worse? And
what are then the consequences?
- What are the consequences if I get two or three forces acting in concert against me? Which
alternatives net effects are least worse?
- Execution risk?
- What do I least like? What am I least sure of?
- Can an advantage give me unwanted consequences? How do I lose an advantage?
- How can I structure the "system" to minimize the influence of negatives? Antidotes to what
I don't want happen? Do I have a backup plan for surprises? Can I correct it?What rules
can I install to achieve goal and avoid non-goal? Is there a built-in safety factor?
What are the consequences if I am wrong?
What key thing am I betting on? Do I risk whatis important for me for something of relative low
utility for me?
What is the cost (dollars, time, mental stress etc) of being wrong weighted against the
benefit or value of being right compared to the next best available opportunity?
If I do this because I believe the consequences are in my best interest/it'strue but I turn out
wrong/it is false, what are the short- and long-term consequences (actual loss and
opportunity cost loss) for my goal and can I handle them and/or reverse them?
If I don't do this because I believe the consequences is not in my best interest/it's false but
I turn out wrong/it's true, what are the short- and long-term consequences formy goal and
can I handle them and/or reverse them?
- If I don't take a decision at all now because I don't believe it is necessary but I am wrong,
what are the short-and long-term consequences for my goal and can I handle them and/or
reverse them?
What is the value?
- What is the utility or preference of each ofthese alternatives to me? Which alternative is
most likely to achieve my goal and ultimate objective? Is it really more attractive than the
other choices I have?
- What can I use as criteria to judge my alternatives against each other?
- What do I like best if I weigh the alternatives against each other by assigning their
characteristics numerical values?
- Will it make a difference? Make an impact? How willing am I to accept certain out comes?
What yardstick can be used to measure progress or to measure things against?
- What yardstick(s) do I use? What is the yardstick by which the decision is made?
- How can I easily measure to what degree my goal are being achieved? What indicators can
I track?
- Does the "system" give people an incentive to behave in away sothat my goal will be achieved?
Or does it work against the goal?
How act now?
- Can I execute? What specific action(s) do I have to do (must do) now? What do I need to
do first?
Who is going to do what, where, when, why and how?
Have I decided on where the critical points (time and effects) are?
Have I installed some kind of control stations and rules? Why is this the right rule? What
are the consequences if I don't install this rule (or change my way of doing something)?
What administrative and practical actions must I do due to the rule? How much time will
it take to follow the rule? Can I control how I follow the rule? Can I installa time-limited
rule? Where does the rules not work?
Have I made an active decision?
- AmI prepared to change the decision to reflect new information or new insights on what
works and not?
- Is another decision contingent on a specific event happening? Have Ievaluated the issue as
it exists today? Is the underlying rationale for the decision still there? What new evidence
is there that can change the likelihood? Does my way of measuring progress give any clue
of what is likely to happen in the future? Events - relevant or irrelevant? Does it make any
difference for my goal (independent of time horizon)?
Post mortem or learning from mistakes
- How well did it or didn't it work out? Did I act? Did I do what I said? What did I think at
the time? Original reasons compared to reality?
- Why did I go wrong? How? Where? Opportunity cost?
- How can I figure out if this is going to continue? Have I acted on mymistakes? How act
to not repeat? What should I have done and didn'tdo? What should I concentrate on? What
must I improve? What must I learn?ager
What exactly is the problem
- What do I want to achieve? Why don't I achievemy goal? What happen? How does it
happen? Where does it happen and not? When does it happen and not? Who's affected?
- What causes my goal? What interferes with the factors that cause my goal?Symptoms or
core cause? What is the single most important limiting factor for reaching mygoal? What
principles or assumptions do I base this on? What are the consequences if theyare wrong?
Assuming no limitations, what would be the best course of action? Other consequences?
WHAT ARE THE LIKELY CONSEQUENCES
WHAT ARE THE LIKELY CONSEQUENCES CONSIDERING HUMAN BEHAVIOR?
What is causing me to do this?
What are my present environment and my state of mind? What is rewarding for me to do/say
if I want to avoid pain? What do I perceivetobe the consequences for me? Are they painful
or pleasurable? What psychological tendencies will influence me? Are they likely to cause a
misjudgment?
What is the context?
What does the environment and participants(incl. size) look like? Who is the decision-maker
and what are his criteria for making decisions? Who benefits and who pay? Who is responsible
for outcome? Who and what are influencing the participant's perception ofreality?
Can I judge him?
Can I judge his character? What are hisexperiences? What temporary or permanent
characteristics influence him (age, cultural background, health, mood... )?What
environmental (present internal and external) or situational factors influence him? Does he
want tosell me something?
What is in his self-interest to do?
What is logical for him to do? What is rewarding for him to do if he want to avoid pain? What
does he perceive as painful? What does he fear and why? What does he want more of or what
does he not want to be taken away? What "resources" motivates him?His health, job, family,
position, reputation, status, power? What would give him an incentive ordisincentive? What
reward or penalty system causes his behavior? What is he rewarded (perceived)for doing?
What is he punished (perceived) for doing? How is he measured? How does heperceive the
consequences of non-goal? Is ittohis advantage/interest to believe (or not to believe)
something?
What are the psychological tendencies and shortcuts that influence him and can cause misjudgment?
What bias affects his conclusions? What external influences is there, that will likely influence
him? What temptations are there that appeal to his self-interest? What activates his behavior?
What are the consequences?
What are the consequences for me? Will my goal still be achieved? Is what is rewarding for
him also rewarding for me? Is the system set up so that the relevant participant's interest
coincides with my goal? Does it "pay him"tomake the wrong decision? Does he understand
the consequences of his behavior? What are the short-and long-term consequencesfor him?
What are the lines of responsibility? Does he have the responsibility for the consequences?
What happens when others do the same?
What system would I like to have if the roles were reversed?
How would I like to be treated if the roles were reversed? What would cause me to do the
things I want him to do? What are the behavioral tendencies I can use to change his behavior?
How shall I behave if! want to guarantee non-goal? Can I now turn around and avoid those?
Is this the right system?
Can I appeal to his self-interest? Can I appeal to fear of losing reputation, money, status,
family..? Can I change his present associations to pain? How can I organize the system to
minimize certain influences? Have I told him what I expect? Have I inspected what is done?
Have I supported things done well? Does he have the necessary skills, knowledge and the
relevant information? Does he know what is expected of him? Does he know the goal, how
he will reach it and why that is the best path? Can he measure his progress? Is it related to his
daily activities? Does he have the responsibility and the authority? Is his reward aligned with
the goal? What rules can I install that will consider human weaknesses? Can Iinstall a reverse
rule? What changes must be made? Who will call for them? How likely is that?What are his
values? His goals? What does he consider to be result? What is his perception of the
consequences if he behave like we want him to and if he doesn't?
BUSINESS EVALUATION
Filter 1 - Can I understand the business - predictability?
- Reasons for demand- How certain am I that (and can explain why) people are likely to
continue buy this type of product or service in the future? What has happened in the past
and what is likely to happen in the future? Cyclically in demand?Capacity versus demand?
- Return characteristics- Industry and company return characteristics and change over the
last ten years?
- Industry structure- No of competitors and size? Who dictate the termsin this industry?
What is needed to make money in this industry? Position within the industry? Do I know
who is going to make the money in this market and why?
- Real Customer-Who decides what to buy and what are hisdecision-criteria?
Filter 2 - Does it look like the business has some kind of sustainable competitive advantage?
- Competitive Advantage- How certain am I that (and can explain why) they are likely to
buy the product or service from the company rather than from someone else? Are the
reasons virtually unchanged from what they were ten years ago? Are these motivations
likely to be unchanged over the next ten years?
- Value- How strong and sustainable is this advantage? Have the advantages become
stronger and more durable over the years? What can destroy or reduce them?Barriers to
entry? Brand loyalty? Vulnerable to change in demand or prices? Easy to copy?Short
product life cycle? Customer cost and incentive to switch supplier? Annual cost differential
against competition? Capital investments needed? Bargaining power? Obsolescence risk?
New customer alternatives? Change in buying habits or power? Competitor potential to
undercut prices assuming same cost structure? What is needed to make sure the advantages
stay sustainable? Growth opportunities left? Is the demand for the productlikely to grow?
Untapped unit volume demand? Pricing power?
- Profitability-Can the advantage be translated into profitability and why? How does the
company make money? How much capital is needed to produce incremental revenues?
Financial characteristics - return on capital (operating margins and capital turnover), gross
margins, sales growth, cost- and capital structure and efficiency? Normalized free cash flow?
Advantages of scale? Critical variable?
Filter 3 - Able and honest management?
- Is the management composed of competent and honest people that understands and
focuses on creation ofvalue?
Filter 4 - Is the price right?
- Can I buy at a price that provides a good return with a huge margin of safety measured
against other available alternatives and with evidence from facts and figures?
Filter 5 – Disprove
- How can the business get killed? If the company could kill one of its competitors, who
would it be and why? If the company would go away for 5 years which competitor would
they bet on and why? How resistant is the business to adversity? Assume the company paid
out all its equity capital, would it still have any value? Could someone with the access to
billions of dollars and talent, successfully compete with the company? How much damage
could a competitor do if he doesn't care about returns? Recession sensitivity?Execution
risk? Will new technology help or hurt?
Filter 6 - What are the consequences if I'm wrong?