There is a concept known as probabilistic thinking.

Here is how you can use it in work and life.

Probability means different things to different people.

Probabilistic thinking is essentially trying to estimate, using some tools of math and logic, the likelihood of any specific outcome coming to pass.

The core of probabilistic thinking is understanding that nearly infinite alternative outcomes could have taken place than did. This means nearly infinite possibilities are possible going forward, which doesn’t mean they are equally probable.

Probability is about more than the odds. It’s about how we weigh our knowledge, the methods in which we use to deal with our ignorance, and understanding that in the real world the range of outcomes is rarely finite.

Here are three lessons you can put to use today:

Lesson 1: Tiny errors compound. Over a long enough time period, even small imperfections overpower perfect assumptions. Change is constant. Just as success plants the seeds of failure, failure plants the seeds of success.

Lesson 2: Our knowledge is more uncertain than we’d like. We assign a much higher probability to our own opinions than warranted. Everything we see is filtered through the lens of wanting to be right.

Lesson 3: In the real world, probability never seems as simple as it does in the textbook. There is no six-sided die asking us to place a bet on the odds of rolling a 2. Small errors in our measurement of risk can cause massive errors in outcome magnitude.

Lesson 4: There is a difference between how likely something is to happen and its impact. Small odds can hide asymmetric impacts.

Lesson 5: The worst thing that has ever happened is not the worst thing that could happen.

More people talk about probability than use it to think and make decisions. Probability is full of nuance not the convenience of black and white thinking.

"The Great Mental Models" series reveals more ways to use probabilistic thinking in work and life.

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