How to Use Mental Models for Business Success!

Business life can be so complicated, especially if you are the business owner. One of the best tools I use to turn stressful complexity into easy simplicity is the concept of mental models.

What are mental models? Wikipaedia defines them as “explanations of one’s thinking about how something works in the real world.”

I think of them as an image or picture in my mind. They describe a reduction in size, complexity, or both. The mental model makes things easily understood by me, and others.

As a boy, I used to make model aeroplanes. I still “see” the images of the model planes in my mind. Of course, a plastic model has nowhere near the complexity of real-world aircraft, but building it gave me a good idea of how a plane works: the wings, engine, flaps, undercarriage and so on.

The same is true in business. Years later, I used mental models as handy tools for managing my business “on the run”. Let’s look at a few:

1. The Income Model

Accountants look at businesses in terms of the Profit and Loss Report. This critical statement is a key part of a business tax return. This explains all the expenses, but not of income—reporting just gross income, cost of sales, and net income.

A consultant gave me this simple model to better describe gross income:

Number of clients x number of visits per year x $ per visit = gross income.

If 2264 clients visited my business each year, on average they made 6 visits per year, and on each visit, they spent $151, my gross income was 2264 x 6 x $151 = $2,051,184

Do you see how this simple model clarifies a single value? By following the numbers over time, I knew if my client base was growing or declining. I could gauge marketing effectiveness to both potential and existing clients. I had a simple handle on the value of the services and products we provided, and the effect of a price increase.

I carried this mental model around in my head every day. I knew our progress on the income side, and what areas needed attention.

2. The 5-Star Service Model

Like most business owners, I wanted my team to give great client service—a simple concept to state, but not so easy to inspire the team to go that extra mile. And what does great service mean?

I developed my 5-Star Service model. I asked each member of my team to imagine the service they would receive during an amazing meal at a five-star restaurant. That was the level of service I wanted and expected them to deliver to our clients.

The following image is a screenshot of our Facebook reviews after introducing my 5-Star Service Model—not one review below 5 Stars!

I introduced this model to both interviewees and new hires, so incoming team members knew exactly what I expected.

3. The Star Team Model

Again, like most business owners, I wanted my team to enjoy themselves at work, even while working hard. A happy team will outperform an unhappy or dysfunctional one any day!

I asked my team to imagine they were all key members of a star sporting team in one of the ballgame sports—basketball, football, softball, or so on. How do members of elite winning teams relate to each other, or take on board the coach’s instructions, or perform under pressure? What happens when one of them “drops the ball”?

Their answers to these questions formed the standards of behavior around teamwork.

Do you see how each mental model clarifies and simplifies complex concepts, both in my mind and in the minds of my team members?

Why are Mental Models a path to success?

The answer can be found in The Sixth Key. Mental Models wire your brain for success! Each model is a complex network of brain cells formed in your brain when you create them. The more you work at them, the greater the brain cell network’s strength and durability, and the better their ability to stand up under the pressure or stress of business life!

That leads to less stress and more success for you!

You can learn more about The Sixth Key in my new on-line course, Get Wired for Success.

What are your mental models?