This thinking strategy is used by most billionaires to analyze how they can fail.

Wondering how to succeed? Then, there are many ways to get your business running the right direction. But if you want to take the same route as billionaire Charles Munger, you have to adapt a thinking strategy he calls ‘Inversion.’ This strategy is not about getting things done right, but thinking about all things that could go wrong. Yes, that’s it.

Related media: How To Use Inversion Thinking To Innovate

Things Don’t Just Fall Apart 

Charles Munger is the business partner of Warren Buffett, and Deputy Chairman of Berkshire Hathaway. He has an estimated net worth of nearly 2 billion dollars. That’s not bad for an investor of his caliber, but money isn’t the only means of success.

The billionaire himself once said, “All I want to know is where I’m going to die, so I’ll never go there.”

This is a really weird sentiment, but what he actually meant was that, if something bad was going to happen, the best option is to try and avoid it as much as you can. This is called inversion.

This is the deal: Consider your goals to be accomplished, then consider the negative side. Focus on all the possible means that could happen and make your goals a failure. You then take counter actions to prevent the negative side from happening. This technique of counterattacking the negative outcomes of your goals was from German mathematician Carl Gustav Jacob Jacobi.

He once said, “invert, always invert,” as he always advised, “many hard problems are best solved when they are addressed backwards.”

Avoiding The Wrong Turn

What Jacobi is trying to tell us is, this strategy of avoiding the negative, can be applied to more situations. Do you have a problem? Tackle the possible negative outcomes and then try to avoid them. Joshua Kaufmann’s book, ‘The First 20 Hours,’ made reference to this strategy. In which he provides a great relatable approach to help people practice inversion thinking.

Analyzing the negative outcomes of what could happen to your goals, you will discover the components that could lead to the failure of your goals. For instance, if you plan on starting up a business. What would you like to know about what could happen to cause the startup bankrupt? That’s what you need to be tackling.

Counterattacking The Enemy 

This is inversion: How do you think everything could go wrong?

  • You’d invest too much or less of your capital, which would lead to bankruptcy or low returns.
  • You’d run the business ineffectively, which would lead to low productivity.
  • You’d hire unprofessional staff, which would lead to improper management.
  • You’d not plan a budget, which would lead to financial losses.
  • You’d not schedule your time, which would lead to time mismanagement.

If you happen to do all these things mentioned, then your startup would fail. Knowing how you would fail is what Charles Munger suggests is the best way to avoid failing. Analyzing what could happen and making your business fail is really crucial. By tackling these situations and avoiding them would rather not make the startup a failure, but a successful one.

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Counterintuitively, focusing on what you could do to avoid the failure is what’s important.

  • Learn to invest not too much or less of your capital, but invest an adequate amount.
  • Learn to adapt an effective working strategy which would yield productivity.
  • Learn to assign tasks to skilled and qualified personnel which would ensure efficient management.
  • Learn to work with a budget which would account for your expenditure.
  • Learn to schedule your time.

So there you have it, the means you could fail against the means you could succeed. It might sound pessimistic, but analyzing all the ways your plan could fail might be the best way to ensure its success.

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Written by: Nana Kwadwo, Mon, Dec 24, 2018.



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