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TODAY’S STORY
2 Jul
,
2022

The real cost isn’t always on the sticker.

One of our fellows at Stoa tweeted something recently on the lines of,

“First principles thinking and second-order thinking are the two best things you learn out of Stoa.”

Well, I’d like to add one more mental framework to that list:

Thinking in tradeoffs.

It is what separates the amateur from the professional.

The amateur thinks in ideas — in things we can do, while assuming potentially infinite scope and resources.

While the professional understands tradeoffs and constraints while discussing any solution to a problem.

In fact, this is one of the biggest markers of someone who can actually walk the walk versus someone who simply talks the talk but can’t walk the walk:

How often they mention constraints and tradeoffs while discussing problems and their solutions.

No decision in life is a free lunch.

Every decision is made in its own context and with its own set of tradeoffs.

That’s why professionals do not resort to criticizing harshly, because they can empathize better with all the tradeoffs the other person had to make in order to ship something.

The next time you're conducting an interview, (or are giving one yourself) notice that the one who has really done the work and has domain expertise will be clearly able to justify the decisions they made while solving a particular problem. They will tell you about the hard tradeoffs they needed to make and what principles they used in making those tradeoffs.

I recently wrote about how core values mean nothing unless you define the price you’re willing to uphold them.

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But many other things in life similarly don't mean anything until the tradeoffs and constraints are made clear.

You want to do X. But you're not willing to make the tradeoffs you need to make in order to do X. So you really don't want to do X. But you will only realise this once you make the tradeoffs clear in your mind and see that you're not willing to make those tradeoffs.

All clear prioritization is an exercise in tradeoffs.

People think focus is about the thing you’re focused on. But it’s actually about putting aside the big, shiny, and exciting things you could be working on. It is being clear about what matters — but the real hard work when it comes to focusing is in saying no along the way to the things that feel like they might matter.

All serious change is an exercise in tradeoffs.

You are trading off some ingrained and convenient past behaviours and habits for some difficult and not-so-convenient habits. But any long-lasting change can only happen when people are willing to make those tradeoffs and are fully supported in the process.

All good strategy is an exercise in tradeoffs.

If your strategy document does not mention all the things you will simply refuse to do, it is an incomplete document. Without knowing what price you're willing to pay for your strategy, no one in the team can follow it.

Tradeoffs exist because limits exist.

There is a limit to attention.
There is a limit to energy.
There is a limit to capital.
There is a limit to creative resources.
And ruling everything are physical laws: our biggest constraint.

Those who have gotten their hands dirty and worked in the physical world understand this deeply. Consequently, the way they think about problems is also way more nuanced than someone who hasn't gotten their hands dirty. They can foresee the prices of their decisions even when they are not very evident right now.

When you’re standing in a store, it’s easy to think that the only tradeoff is between money and quality. It’s hard to remember that “quality” has other long-term ramifications, and it is usually worthwhile to unpack them.

You might save a few hundred rupees on the spot, only to lose a dozen hours in the future; a dozen hours that might cost you in the thousands — or in the case of a flimsy stool — even lakhs in hospital bills.

The real cost isn’t always on the sticker. There are long-term costs to the decisions you make today. Being cognizant of them is what separates amateurs from professionals.

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