The Stanford Business School Experiment

A fascinating study from Stanford Business School revealed how the most successful teams think differently about problem-solving. When given just $5 and asked to generate the highest return, most teams focused on the obvious—but the winning team discovered something far more valuable.


🎯 The Three Core Principles

1. Avoid the Distraction

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Principle: The most obvious solution is often a distraction that limits creativity and potential outcomes.

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The Learning: The $5 initial capital in the challenge was actually a trap. The winning group realized this and focused on identifying their most valuable assets instead of getting caught up in the obvious starting point.

2. Ask Foundational Questions

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Principle: To achieve non-linear rewards, question underlying assumptions and dig deeper into the true nature of the problem.

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The Learning: The winning group asked fundamental questions about what they actually had to work with. By questioning the premise, they identified that their presentation time to the class was actually their most valuable asset—not the $5.

3. Select the High Leverage Approach

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Principle: Evaluate all options carefully and choose the path that offers the greatest potential for outsized returns.

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The Learning: Instead of focusing on the $5, they sold their presentation slot to companies wanting to recruit Stanford students. This creative, high-leverage thinking generated significant returns that far exceeded what any $5-based strategy could achieve.


🔄 The Framework: How to Think Differently

Step 1: Identify and Ignore the Red Herrings

Don't get trapped by the most obvious elements of a challenge. Often, these are distractions designed to limit your thinking.

Step 2: Question Everything

Ask foundational questions that challenge core assumptions: