A mental model is simply a representation of how something works. We cannot keep all of the details of the world in our brains, so we use models to simplify the complex into understandable and organizable chunks whether we realize it or not. We then use these models every day to think, decide and understand our world.
Better models mean better thinking. The degree to which our models accurately explain reality is the degree to which they improve our thinking. Understanding reality is the name of the game. Understanding not only helps us decide which actions to take but helps us remove or avoid actions that have a big downside that we would otherwise not be aware of. Not only do we understand the immediate problem with more accuracy, but we can begin to see the second-, third-, and higher-order consequences. This understanding helps us eliminate avoidable errors. Sometimes making good decisions boils down to avoiding bad ones.
The quality of our thinking is largely influenced by the mental models in our heads. While we want accurate models, we also want a wide variety of models to uncover what’s really happening. The key here is variety. Most of us study something specific and don’t get exposure to the big ideas of other disciplines. We don’t develop the multidisciplinary mindset that we need to accurately see a problem. And because we don’t have the right models to understand the situation, we overuse the models we do have and use them even when they don’t belong.