Understanding Mindset: Trade-offs, Heuristics, and Navigating Change

Every choice we make has a trade-off.

When I decide to lace up my running shoes and log 4 miles before work, I’m trading another 45 minutes in bed for the energy I get from moving my body before I sit down at the computer. When I choose to knock off a couple of hours early from work, I’m trading the chance to check a few more items off my list for some self-directed time to improve my mental health.

Even if it seems like there’s a “correct” choice to make, it’s important to see that each option in a trade-off has benefits. Spending 45 more minutes in bed can be a good choice, especially if I’m sick or pushing myself too hard. Sticking to my usual working hours can be a good choice, especially if my mental health is wobbly because I’m feeling behind. When you can see the benefits of each choice, you are aware of the trade-off and can make the right decision for you at that moment in time.

Trade-offs like these are pretty easy to spot—even if the choices still seem difficult to make. But life and business are full of trade-offs that are significantly harder to see. It’s these invisible trade-offs that end up causing ongoing frustration and friction that seem to have no clear cause. One source of these invisible trade-offs is, you guessed it, our mindsets.

Our mindsets inform the choices we make.

And often, our mindsets are so entrenched within us that we fail to see we’re making a choice at all. We operate on a sort of default setting that makes choices for us in the background.

For instance, you might not even notice that you have a choice to raise your prices on existing clients if your mindset is telling you that the only reason you have those clients is that they can’t afford higher-priced services.

Your mindset is a collection of heuristics that you’ve developed to make moving through the world easier and more efficient.

A heuristic is a “mental shortcut.” We process our choices through these shortcuts all of the time. We develop our heuristics through experience: education, culture, family, work environment, class, trauma, oppression, poverty, harmful relationships, and illness, among others. Heuristics are generally helpful because they alleviate some of the effort and energy required to move through the world constantly making decisions.

Just like with choices, sometimes we’re knowingly using a heuristic (“a rule of thumb”) and sometimes we have no idea what’s going on. When our brains let the heuristic take over, we don’t have to work as hard which helps us focus on different needs.

Another way to think of this is “jumping to a conclusion.” 

Our brains use heuristics to leap from a piece of information to an inference about what it means or what caused it—without actually pausing to ascertain whether that’s true or not. Anne- Laure Cuff at Ness Labs writes, “The psychological term for jumping to conclusions is ‘inference-observation confusion,’ which is defined as when people make an inference but fail to label it as one, ignoring the risk involved.”

Ignoring the inference is fine—most of the time. It becomes a problem when we’re trying to make a change, such as developing new habits or growing our businesses. We end up declaring our intention to make the change or hit a new goal, but the heuristic just keeps processing information in the same way it always has. And that means we just keep making choices that lead us back to where we started.

The key to mindset change is a process of noticing the choices in front of us, the trade-offs for each option, and the heuristic at play. Then we can start to create a new heuristic—over time—and make different choices.

Let’s take a look at how this works in practice. 

We’ll start with the most over-diagnosed mindset shift: from scarcity to abundance.

Shifting away from a scarcity mindset is most often talked about in terms of money or competition. We try to replace questions of value and worth with a heuristic that tells us, “I’m worth it” or “It’s worth it.” And we try to replace a fear of competition with a heuristic that tells us, “There’s more than enough to go around.” While I might quibble with the lack of nuance in these common affirmations, there’s no doubt they’re helpful, at least in the short-term.

However, the scarcity mindset doesn’t just impact the choices we make about money or the fears we have about the competition. A scarcity mindset is also at play when we’re overworking and overcommitting ourselves. It’s functioning in the background when we’re experiencing the fear of missing out (FOMO). And there’s scarcity at work when we’re always rushing on to the next thing or the new thing.

A scarcity mindset is made up of all sorts of heuristics that cause us to make decisions that leave us panicked, agitated, and exhausted.

Using that last pattern as an example, let’s dig into why we’re always rushing on to the next or new thing. First, identify the choice. Maybe you’ve just released a new product or service package. You send an email to your list and you get a couple of takers. Initially, you’re excited; it’s working! But then, interest seems to drop off (never mind that you haven’t shared the offer again). Your brain immediately goes to, “Oh, it didn’t work after all.” So you start looking for the next thing you can try.

You have a choice when you notice the interest in your new offer level off. You can either declare that it didn’t work or you can get curious about why interest has leveled off and see what you can do to try to boost interest again. There are benefits to both of these choices.

The benefit to accepting the offer as a failure is that you don’t have to do the hard work of determining what’s happening and experiment with changing it. In print, that might not seem like much of a benefit but in practice, it’s quite enticing. The benefit of sticking with the offer you’ve just released is that there’s a very good chance you’ll identify what’s happening and you won’t have to start over again.

We can now start to identify the existing heuristic and find a new one to replace it with.

There isn’t one right answer here—so I’m going to use a personal one. Recently, I’ve been working with a heuristic that tells me to expect failure. My existing heuristic means that any time I notice something isn’t working as well as I’d like it to, I assume that it’s a failure. My brain processes that disappointment as a signal to choose to move on. I might not even notice that another option exists. Needless to say, this hasn’t been helpful.

When I figured out that this heuristic was causing me a lot more pain and angst than benefit, I decided to create a new one. I set a commitment to expect success instead of failure. I don’t want to make that sound easy—it hasn’t been. But by naming the commitment to expect success and actively looking for opportunities to practice it, I started to make different choices.

At first, changing the heuristic is a very active process that takes time and mental effort. 

But slowly, it starts to become more and more integrated so that it’s truly a heuristic—meaning that it’s a mental shortcut you’re probably not even aware of.

Expecting failure is a heuristic of a scarcity mindset. It causes me to behave in ways that leave me feeling stretched thin and out of resources. I make choices to try to claw my way out of that feeling but end up reinforcing them instead.

Expecting success is a heuristic of an abundance mindset. It allows me to spend more time making things better instead of constantly moving on to the new thing. It gives me a chance to feel supported and to know that there’s enough time or money (most of the time) to pursue quality over quantity.

That’s a pretty good trade-off!

Early on as I was developing my business, a scarcity mindset had a part to play (which is not to say that scarcity is a requisite of entrepreneurship) in my ability to pivot and try new things. It had some real benefits for a short time. But it quickly became a problem. As I’ve worked on identifying the trade-offs and reprogramming the heuristics, I’ve also worked on gratitude for my previous mindset and choices. They served me—in their own way—at one time. I don’t need to feel shame or embarrassment because I didn’t make better choices.

One last thing on the subject of trade-offs: 

A key benefit of many choices we make is self-preservation. Whether it’s because of past trauma, systems of oppression, lack of resources, or any of the other experiences that impact the way we operate in the world, we’ve developed many of our heuristics and the mindsets they make up to keep ourselves safe. Often, literally so. Pay close attention to how harmful relationship dynamics, racism, sexism, poverty, ableism, and mental illness have informed your choices and formed your mindsets.

Feel grateful that you’ve protected yourself and think critically about whether that kind of protection is still needed today—or what other forms of self-preservation you can adopt instead.

We can have gratitude for how our mind has kept us safe or made things easier for us even as we work to transform how we operate.

Cover of What Works book by Tara McMullin

Read More

What Type of Goal-Setter Are You?

What Type of Goal-Setter Are You?

I've explored goal-setting and planning with small business owners, creatives, and independent workers for over 12 years now. That means I've observed many different types of goal-setters. Some confidently choose a new goal and get to work. Others rebel against...

What Works offers in-depth, well-researched content that strips away the hype of the 21st-century economy. Whether you love the podcast, the articles, or the Instagram content, we’d love your support