[Content warning: discussion of exercise.]
Effectuation is a concept I recently discovered and I think it’s really interesting.
One way of creating plans is though causation. In this context, causation involves identifying a goal and then looking for the resources that will help you achieve it. For instance, you might identify that you want to run a five-minute mile. Then you would develop your training schedule, come up with a diet plan you can live with, pick out a kickass pair of running shoes, and so on. A lot of people I know are big fans of reasoning more through causation, which they call being agentic.
However, some research on successful entrepreneurs shows that they tend to use a different strategy, called effectuation. Effectuation involves identifying your resources and then choosing a goal that you can reach with your resources. For instance, effectuation is saying “well, I have this bench press and squat rack… I should start weightlifting!”
Now, you might be thinking “why the hell would I ever use effectuation? That’s ridiculous!” However, it turns out that effectuation tends to work better under conditions of uncertainty. If you’re founding a company, it can be genuinely difficult to know whether, say, a medical startup or a business-to-business startup is a better idea; there are a lot of unknowns and unknown unknowns, and even your best guess is going to be really uncertain. On the other hand, it’s very easy to figure out whether you, personally, are better at doing a medical startup or a business-to-business startup: maybe you have a medical degree or a lot of contacts in a particular industry. And since goals you already have the resources for are more likely to succeed than those you don’t , effectuation can help you choose a path that’s likely to succeed even when you’re uncertain.
One thing that didn’t come up in the research but that I do think is important is that your effectuation should be guided by some sort of broader meta-goal: for instance, you might want to get in shape, have a strong marriage, improve the world, be happy, or whatever. It’s quite obvious why that didn’t come up in the research: to a first approximation, every entrepreneur has the meta-goal ‘earn lots of money.’ However, within your extremely broad goal, I think in a lot of situations it makes sense not to ask yourself “what is the best way to reach this broad goal?” but instead to ask yourself “what resources do I have and how can I use them to achieve my broad goal?”