12 Ways to Get Smarter in One Infographic
View the high resolution version of today’s graphic by clicking here.
The level of a person’s raw intelligence, as measured by aptitude tests such as IQ scores, is generally pretty stable for most people during adulthood.
While it’s true that there are things you can do to fine tune your natural capabilities, such as doing brain exercises, puzzle solving, and getting optimal sleep – the amount of raw brainpower you have is difficult to increase in any meaningful or permanent way.
For those of us who constantly strive to be high-performers in our fields, this seems like bad news. If we can’t increase our processing power, then how can we solve life’s bigger problems as we move up the ladder?
The Key is Mental Models
The good news is that while raw cognitive abilities matter, it’s how you use and harness those abilities that really makes the difference.
The world’s most successful people, from Ray Dalio to Warren Buffett, are not necessarily leagues above the rest of us in raw intelligence – they have simply developed and applied better mental models of how the world works, and they use these principles to filter their thoughts, decisions, strategies, and execution.
Today’s infographic comes from best-selling author and entrepreneur Michael Simmons, who has collected over 650 mental models through his work. The infographic, in a similar style to one we previously published on cognitive biases, synthesizes these models down to the most useful and universal mental models that people should learn to master first.
Concepts such as the 80/20 rule (Pareto’s principle), compound interest, and network effects are summarized in the visualization, and their major components are broken down further within the circle.
Mental Model Example
In a recent Medium post by Simmons, he highlights a well-known mental model that is the perfect bread crumb to start with.
The 80/20 rule (Pareto’s principle) is named after Italian economist Vilfredo Pareto, who was likely the first person to note the 80/20 connection in an 1896 paper.
In short, it shows that 20% of inputs (work, time, effort) often leads to 80% of outputs (performance, sales, revenue, etc.), creating an extremely vivid mental framework for making prioritization decisions.
The 80/20 rule represents a power law distribution that has been empirically shown to exist throughout nature, and it also has huge implications on business.
If you focus your effort on these 20% of tasks first, and get the most out of them, you will be able to drive results much more efficiently than wasting time on the 80% “long-tail” shown below.
This is just one example of how a powerful mental model can be effective in making you work smarter.
If you want to be a top performer, it’s worth looking into other mental models out there as well. They can help you better frame reality, so that you can harness your intelligence and effort in the most effective way possible – and it’ll allow you to deliver results along the way.
How to Take the First Steps in Scaling Your Business
What are the roadblocks to achieving scale? We look at these growing pains, as well as the steps needed to get past them in scaling your business.
How to Take the First Steps in Scaling Your Business
Most entrepreneurs are hungry to bring their company to the next level.
Whether they operate a family-run business or a rapidly evolving tech startup, there is always another milestone in sight. Business owners want to their companies to make an impact with their customers and communities, and they want to keep honing their craft.
But with 27.9 million small businesses in the United States alone, there is no shortage of competition for the same pieces of the pie.
How can you take steps in scaling your business, and do what your competitors are not willing to do?
Roadblocks to Scale
Today’s infographic comes to us from Brunner Consulting, and it breaks down common roadblocks to scaling as well as potential solutions to the problem of decision fatigue.
To begin, we’ll look at a poll of U.S. small business owners, which gives perspective on the challenges most often faced by companies with fewer than 10 employees:
- Profitability (50%)
- Hiring new employees (48%)
- Growing revenue (41%)
- Cash flow (38%)
Unless a business has deep pocketbooks or is venture-backed, there are several obstacles here that may prevent companies from scaling successfully.
A lack of profitability is an obvious limitation, but it’s also clear that revenue growth, cash flow, and adding new employees can be growing pains that may derail any long-term plans.
Why is scaling your business so challenging?
It’s because most types of businesses are not really scalable to begin with. The only sustainable way to scale for most companies is to grow revenue while decreasing operating costs, and for many traditional small businesses (i.e. bakeries, restaurants, hardware stores, consulting, etc.) this can be incredibly difficult.
Even if you come up with a scalable business model, there is yet another obstacle that can prevent your from growing the right way: decision fatigue.
In a growing and evolving company, entrepreneurs can’t do everything – and when they try to make every big and small decision, it affects the quality of those decisions. It can lead to being unnecessarily risk averse, maintaining the status quo, or even avoiding decisions altogether.
Scaling Your Business: First Steps
For a business to grow, there has to be more than one decision-maker.
There are two main routes to this:
1. Delegate Responsibility
In a typical small business, employees find and diagnose problems, while owners focus on solving them. However, by delegating these day-to-day decisions to employees, it frees up owners to work on the big picture items that can fuel growth.
2. Play to Your Strengths
Entrepreneurs can’t do it all, so it’s best to play to your strengths. To do this, outsource business departments that are outside of your wheelhouse. Often those may include things like bookkeeping, marketing, customer service, or website design.
Decentralizing decision-making is one of the first steps in scaling your business – and no matter how you do this, it frees you to focus on the big problems.
The World’s Best and Worst Places for Ease of Doing Business
In some countries, launching a business is easy. In others? It’s a hassle that is littered with bureaucracy, corruption, and a lack of basic services.
The Best and Worst Places for Ease of Doing Business
The Chart of the Week is a weekly Visual Capitalist feature on Fridays.
When it comes to supporting new businesses, not all jurisdictions are created equal.
Whether it’s the basics, like hooking up electricity and registering the business, or more complex regulatory hurdles, your location can impact the success of your venture in a big way. What makes a country business-friendly, and where are the most hassle-free places to open up shop?
The Ease of Doing Business ranking, by World Bank, breaks countries’ complex regulatory ecosystems down into quantifiable components. The resulting index and ranking system is a global look at who’s making it easy to do business, and which countries are struggling.
A Global View of Doing Business
The visualization below looks at the score (0-100) of 190 economies around the world, as well as a spread between high and low scoring factors in the subindices. While two countries may have the same score, one might have a much wider “spread” which points to outlaying successes or serious challenges in their regulatory framework.
Luxembourg, for example, ranked number one in the Trading Across Borders factor, but 173rd in Getting Credit.
Note: click the graphic below of the full list to expand to a higher resolution.
View a high resolution version of this graphic.
Of the 190 economies covered in the report, New Zealand comes out on top for the third year in a row. Singapore and Denmark round out the top three.
The United States, whose ranking has been slipping in recent years, came in at 8th spot.
This ranking offers up some surprises, such as Macedonia and Georgia, which are both in the top 10. Georgia makes it easy to start a new business, and has the lowest number of procedures to get the process going.
Afghanistan had the biggest year-over-year score increase after making big strides in enhancing the legal framework for businesses.
Rwanda is ranked at a very respectable 29th place – the only low-income economy to crack the top 50.
Building the Index
The data for the ranking is compiled from over 12,500 expert contributors in 190 countries who deal with business regulations on a daily basis. The final score is based on the average of 11 factors:
- Starting a business – Procedures, time, cost, and minimum capital to open a new business
- Dealing with construction permits – Procedures, time, and cost to build a warehouse
- Access to electricity – Procedures, time, and cost required to obtain an electricity connection for a new warehouse
- Registering property – Procedures, time, and cost to register commercial real estate
- Procuring credit – Strength of legal rights index, depth of credit information index
- Protecting investors – Indices on the extent of disclosure, extent of director liability and ease of shareholder suits
- Paying taxes – Number of taxes paid, total tax payable as share of gross profit, and hours per year spent preparing tax returns
- Trading across borders – Number of documents, cost, and time necessary to import and export
- Enforcing contracts – Procedures, time, and cost to enforce a debt contract
- Resolving insolvency – The time, cost, and recovery rate (%) under bankruptcy proceeding
- Labor market regulation – Flexibility in employment regulation and aspects of job quality
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