Shane Parrish wrote an article on Farnam Street titled Second-Order Thinking: What Smart People Use to Outperform.
« Things are not always as they appear. Often when we solve one problem, we end up unintentionally creating another one that’s even worse. The best way to examine the long-term consequences of our decisions is to use second-order thinking. »
« In his exceptional book, The Most Important Thing, Howard Marks explains the concept of second-order thinking, which he calls second-level thinking. »
« First-level thinking is simplistic and superficial… It happens when we look for something that only solves the immediate problem without considering the consequences. »
« Second-order thinking is more deliberate. It is thinking in terms of interactions and time, understanding that despite our intentions our interventions often cause harm. Second order thinkers ask themselves the question “And then what?” … Second-order thinking takes a lot of work. It’s not easy to think in terms of systems, interactions, and time. However, doing so is a smart way to separate yourself from the masses. »
« The road to out-thinking people can’t come from first-order thinking. It must come from second-order thinking. Extraordinary performance comes from seeing things that other people can’t see. »
« If you’re using this to think about business decisions, ask yourself how important parts of the ecosystem are likely to respond. How will employees deal with this? What will my competitors likely do? What about my suppliers? What about the regulators? Often the answer will be little to no impact, but you want to understand the immediate and second-order consequences before you make the decision. »