What are "mental models"?

Mental models are the deeply held assumptions that guide our understanding and action.

When you meet someone, you quickly make a series of judgements based on simple information, such as what they look like, what they do or where they grew up. These judgements are the result of our mental models making sense of the world.

Mental models also apply to business. They drive assumptions about the status quo. Putting up new ideas requires overcoming existing mental models - expectations of “how things just are”.

But, mental models are not impossible to overturn. Once addressed, they can have a significant impact on corporate performance. Royal Dutch/Shell’s rise from a weaker to a major industry player has partly been put down to the discipline of challenging mental models.

“Arie de Geus, Shell’s Coordinator of Group Planning during the 80s, said that continuous adaptation and growth in a changing business environment depends on “institutional learning, which is the process whereby management teams change their shared mental models of the company, their markets, and their competitors.”

Peter M. Senge