Good leadership goes beyond experience and education. Decision making should not be influenced by what other major players in the industry are doing.
For some, this is easier said than done. But that’s not the case for influential business leaders Elon Musk and Jeff Bezos. These entrepreneurs apply the ancient “first principles” approach to all decision making. Read on to learn what this approach entails, and how leaders can leverage it to better connect with their teams.
FIRST PRINCIPLES – HISTORY
The “first principle” was conceptualised by Aristotle over 2,300 years ago. He described the principle as the “first basis from which a thing is known”. In other words, a first principle is a basic assumption that cannot be deduced from any other assumptions. Sounds a bit abstract, right? So let’s look at a couple of modern business examples.
For Elon Musk, the first principle approach involves “boiling things down to their fundamental truths and reasoning up from there”.
As humans, we most often reason with an analogy. When we reason with an analogy, we do things in a way that it has already been done before. In other words, if I want to launch something into space, I go shopping for rockets already on the market. However, first principles invite us to examine and eliminate the biases that lead us to think in this way.
Thus, Musk applied first principles when estimating how much the SpaceX rockets would cost. Rather than looking for the available products on the market, his team instead determined the necessary parts of a rocket and the cost of the raw materials. As a result, they built a rocket for about 2% of the typical price. In doing so, along with other applications of this principle, they have revolutionised the economics of travel to outer space.