Second-Order-Thinking / Second-Level-Thinking

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Second-Order-Thinking / Second-Level-Thinking

Approach to second-order thinking / second-level thinking

Approach second-order thinking / second-level thinking

  1. First, write down the decision you would make initially. This makes it clear to everyone involved what the starting point is.
  2. You then determine the immediate implications of that decision. This is also called First Order Thinking.
  3. With each impact, ask yourself, “And then what follows?”. This is the key question to achieve second order thinking.
  4. Finally, outline the long-term consequences of the planned decision. In principle, you ask yourself the question “And what are the consequences in the long term?”. This question is also part of second-order thinking.
  5. Finally, taking into account the medium and long-term consequences, you make the final and, if necessary, adjusted decision.

Description of second-order thinking / second-level thinking

Alternatively, second-order thinking is also referred to as second-level thinking, a German term is not usually used for it. It’s a good way to consider the long-term consequences of your actions before you actually make a decision. Decisions are usually quick and easy to make when it comes to short-term results. In doing so, they only solve the immediate problem without considering the consequences and without supporting sustainable action. Second-order thinking, on the other hand, looks at the medium to long-term consequences and reactions of those involved by always aiming at the question “And what then?”.

This method was developed by Shane Parrish.

Thematic classification

Second-order thinking / second-level thinking is a methodology for making decisions with a long-term perspective.

Who benefits from this method?

  • Management
  • Entrepreneurs
  • Teams and employees

Limits of Application

The second order thinking method requires more time than just making spontaneous decisions. It also takes courage and the willingness to deal with the long-term effects of your actions. Managers who want to make long-term decisions should be aware of the economic and political pressure that often occurs, which in many cases forces short-term decisions.

Alternative methods:

SWOT analysis

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SWOT Template Digital

SWOT analysis as a digital template from ConWISE

Approach

  1. First, you define the topic or subject you want to analyze. This can be an organizational unit, but also a product, service or process.
  2. It is recommended to start with strengths and weaknesses. Always evaluate them in relation to the object under consideration (internal factors).
  3. After that, capture the opportunities and threats that are influenced by outside factors.
  4. Finally, sort the points in the order of their importance and influence (descending from top to bottom).

Description

With the help of the SWOT analysis, you have the opportunity to find out the strengths and weaknesses of your company, your department or your products. Furthermore, the method compares the opportunities and risks in relation to the environment and the competition. The SWOT analysis is one of the best-known and most frequently used methods in management. The abbreviation SWOT stands for

Strengths, Weaknesses, Opportunities, and Threats.

Thematic classification

Internal and external factors are analyzed using the SWOT method. In this respect, it is part of strategic management.

Who benefits from this method?

  • Management
  • Organizations
  • Companies
  • Departments
  • Projects
  • Product manager

Practical tips

  • It can be helpful to first get an overview of the external factors.
  • The ConWISE platform also offers the PESTEL method for an environmental analysis. This includes political, economic, social, technological, ecological and legal factors.

Limits of Application

The SWOT analysis is intended as a starting point for discussions. On its own, it gives no direct indication of improvement. Only the consideration of combinations of the individual results brings further insights.

Alternative methods:

TOWS Matrix

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From SWOT Analysis to TOWS Matrix

From SWOT to TOWS

Application of the TOWS Matrix

  1. First, you define the topic or subject you want to analyze. This can be an organizational unit, but also a product, service or process.
  2. After that, do a SWOT analysis .
  3. They then combine the results of two SWOT analysis fields. This results in 4 combinations that form a matrix. For each combination, there is a special question to consider:
    • Strengths & Opportunities: How can you use your strengths to seize opportunities?
    • Weaknesses & Opportunities: How can you address your weaknesses to take advantage of opportunities?
    • Strengths & Threats: How can you use your strengths to defend against threats?
    • Weaknesses & Threats: How can you eliminate vulnerabilities to counteract threats?

Description of the TOWS Matrix

The TOWS Matrix is based on the classic SWOT analysis. The results of the company’s strengths and weaknesses and the resulting opportunities and risks are compared in a matrix. Each combination of SWOT fields results in a specific strategic thrust for each matrix field:

  • Strengths & Opportunities: Focus on maximum success
  • Weaknesses & Opportunities: catching up on the competition
  • Strengths & Threats: Defending Success
  • Weaknesses & Threats: Securing existence

Thematic classification

With the help of the TOWS matrix, the consequences of the analysis results come to the fore. In this respect, it is part of strategic management.

Who benefits from this method?

  • Management
  • Organizations
  • Companies
  • Departments
  • Projects
  • Product manager

Alternative methods: