Definition

The ability to reason beyond the obvious. First-order thinking is surface-level observation and conclusion, whereas second-order thinking interrogates decisions, implications, and potential consequences.

In that sense, second-order thinking describes the act of going deeper and includes third, fourth, fifth, nth level thought. Simultaneously, it discourages accepting the most immediate choice and diminishes the resonance of its outcome.

Why Use It

Decisions made now have implications for the future. While it’s simpler to think concretely in near-term gains, a poor choice can lead to worse outcomes. Bias plays a role in limiting one’s ability to see clearly, and so an obvious choice can seem that much more enticing.

The idea is to push yourself out of your comfort zone, bias, and experiences that shape easily accessible thought patterns.

When to Use It

Don’t choose the first option without exploring the ramifications of your choices.

Imagine an unstable state undergoing a regime change, and a superpower delivers arms and resources to a specific group that seems trustworthy. The group comes into power as hoped, but the consequences for those living under the new regime end up being worse than before.

In that way, a seemingly good choice early on has catastrophic outcomes long term. Without weighing the negative implications, they choose the path of least resistance and ultimately pay the price.

Conversely, many choices in life have negative first-order consequences and subsequently are second-order positive. An excellent long-term choice may not have an immediate payoff.

When someone begins lifting weights, the results are not immediate. After investing time and making an effort, they build muscle.

In that sense, since many folks get stuck in first-order thinking, there’s less competition the deeper you think.

How to Use It

Second-order thinkers ask, “And then what?” when considering a choice.

They think about choices over time. What is the impact of your choice one hour later, one month later, one year later, and so on?

They think about systems, how they work, and the interactions between components, people, and processes.

Second-order thinking in practice is simple: jot down the first solution to a problem and note the immediate positive or adverse effects. Then assess the future outcomes of the first-order decision to the second, third, fourth-order, and so on. Write each of them down.

In each step, utilize these questions to frame the possible outcomes:

• What are likely future effects?
• What are the risks?
• How will your decision impact others?
• What do others think?
• What will your competitors do?
• What’s the probability you’re right?
• Is there a more straightforward solution?

Get specific and timely feedback on your decision’s effectiveness. Use that feedback loop to guide better decisions.

How to Misuse It

Incorrectly defining the problem and first-order outcomes will warp your thinking and give weight to the wrong future consequences. So, it’s essential to frame the problem and choice before digging into the results.

Next Step

Explore some mundane examples in your own life where a negative first-order solution results in a positive second-order outcome.

Where it Came From

Howard Marks, the co-founder of Oaktree Capital, first wrote about the concept in his 2011 book, “The Most Important Thing.”

While the book is about making smart investments, the concept of second-order thinking is widely applicable.