Decision-Making with Inversion: How to Identify Risks Before They Happen

A Return Journey from Paris

My training in Paris was over, and I was back at Gare du Nord, waiting to board my train home to London. After a quick snack in the lounge, I joined the queue with the other passengers and found my way to seat 38 in coach 8. The platform was its usual crowded self. I’ve always preferred trains to planes — flying tends to leave me tense rather than rested.

I found my seat by the window. A man about my age had been sitting on the aisle side, and he stood politely to let me through. Across from us sat another passenger — someone, I’d soon realize, he already knew.

As the train pulled out of the station and picked up speed across the French countryside, I opened my book.

Calculating the Worst Case

The book was a collection of lessons from an entrepreneur reflecting on his own career — how ventures actually get built, and what it takes to become one. One idea stood out from the rest: before starting anything, calculate the worst that could happen. He put it plainly:

“Calculate the worst that could happen, because if you can handle the worst-case scenario — if you can tolerate it — you can move forward. Your expenses will always remain expenses, but you can never be certain of your revenues.”

Two Conversations, Two Philosophies

I was still turning that line over when I picked up on the conversation beside me. The two men were entrepreneurs — founders who had built and scaled their own start-ups with outside investment — and their conversation was entirely about potential: how big the business could get, what it might become, what was still possible.

It struck me as the exact opposite of what I’d just read. The book, Baybars Altuntaş’s God Particle in Success published in Turkish argued that entrepreneurs tend to think only about the upside. And here it was, playing out a few feet away from me, almost word for word.

The Power of Inversion

The German mathematician Carl Jacobi built his career on a single instinct: “invert, always invert.” Rather than solving a problem head-on, he solved it backwards — and the method proved useful enough that it has since spread far beyond mathematics.

Applied to decision-making, inversion means solving a hard problem by studying how it fails. Instead of asking how a business or project will succeed, you ask the opposite: how would this fall apart completely? What would cause it to fail? Where are the vulnerabilities that could bring it down? Stoic philosophers were recommending this kind of thinking centuries ago, and in recent decades the investor Charlie Munger has made it one of his signature tools.

The Pre-Mortem Technique

In business, this backward approach has a name: the pre-mortem. Before a project launches, the team imagines it has already failed, then works backward to find every weak point that could have caused it — and fixes what it can before the risk becomes real.

It connects directly to something I wrote about in an earlier piece on the Ellsberg paradox, where I described the four-quadrant matrix of known knowns, known unknowns, unknown knowns, and unknown unknowns. That framework exists to help you sort the uncertainty you’re facing before you decide anything. A pre-mortem does something similar: it hunts for the unknown knowns — risks that are, in some sense, knowable in advance, if only someone stops to look for them.

None of this guarantees a clean outcome. Life still produces genuine surprises, threats no risk analysis could have flagged. The goal of inversion isn’t to eliminate uncertainty; it’s to prepare for it, and to build the kind of resilience that absorbs a shock instead of being broken by it.

Guarding Against Bias

Most decision-making advice starts from the goal: define what success looks like, then work toward it. That framing invites bias. I’ve written before about confirmation bias — one of the more dangerous distortions in decision-making, because it quietly filters out anything that contradicts what you already want to believe. Inversion works against this by design. By forcing people and teams to look for what could go wrong rather than confirming what could go right, it surfaces blind spots before they turn into costly mistakes.

An Ancient Practice

None of this is new. The Stoics were making the same argument two thousand years ago. Seneca and Marcus Aurelius both wrote about the value of rehearsing the worst case in advance — not as pessimism, but as preparation, a way to build resilience and expose the weak points in a plan before reality does it for you. Seneca’s Letters from a Stoic is a good place to see the idea in his own words.

“If, after some reflection, you feel that your earlier decision was wrong, let nothing stop you from changing it.”

Umar ibn al-Khattab (r.a.)

What the Research Shows

Modern research backs this up. In 2007, the cognitive psychologist Gary Klein published “Performing a Project Premortem” in Harvard Business Review, describing an exercise in which teams imagine, before launch, that the project has already failed completely. That single shift in framing lets people bypass their own confirmation bias and say out loud what they might otherwise keep to themselves. Daniel Kahneman went further in Thinking, Fast and Slow, calling the pre-mortem the single most effective technique available to organizations trying to correct for overconfidence, optimism bias, and confirmation bias.

Putting It Into Practice

So how do you actually run this exercise? Every situation carries its own dynamics — a business launch doesn’t fail the same way a hiring decision does, or a product launch, or a personal choice. The most useful way to learn the method is case by case, so let’s start with one and build from there.

Case Study: Founding B2B Software Company

Imagine you and a couple of friends decide to found a company that creates software solutions for the B2B space. I was in this exact situation years ago.

You want to build custom software solutions that companies need, tailored to their specific workflows. Because of the nature of the business, there’s no need for a large upfront investment. You and your team are highly experienced professionals who know how to develop and sell solutions. You believe this is a winning team. But pause for a moment — let’s apply inversion thinking.

Step 1: Bring the Team Together

The first step is to bring your team together for a meeting dedicated to inversion thinking. Entrepreneurs and intrapreneurs are naturally optimistic about their own projects — but it’s worth setting that aside and being pessimistic for just one hour.

Step 2: Brief the Project

Start by explaining what’s been done so far and why. Walk your teammates through what you’re planning and what you’re aiming for. Keep it brief — no more than ten minutes, backed by one or two pages at most.

Step 3: List the Reasons for Failure

Invite participants to think about how the project could fail. If they struggle, prompt them with two questions: what’s the single biggest reason this project could fail, and what are the smaller, secondary reasons? Hand out sticky notes and marker pens, and have everyone write down their reasons — one per note — then stick them to a wall or whiteboard. This step should take 30 to 45 minutes.

Step 4: Cluster the Reasons

Once the reasons are listed, cluster them. There will likely be duplicates — combine these, then group the rest by theme. Patterns emerge when a team sorts items by perceived similarity, surfacing commonalities that are real but not always obvious. This is how you draw fresh insight out of what initially looks like a pile of disconnected notes.

Step 5: Visualize the Vote

Give each participant three sticker dots and ask them to vote for the reasons they consider most important. The results will show you exactly which failure points to prioritize when you plan.

How to Apply This Tomorrow

Before your next decision a hire, a purchase, a new partnership, even a smaller call like which supplier to switch to — give yourself ten minutes and ask the opposite question.

• How could this fail?
• What’s the first sign we’d see if this were about to go wrong?
• What’s the one thing that, if it went wrong, would take the whole project down with it?
• Think of a similar project you’ve seen fail — yours or someone else’s. What was the actual cause?
• If this fails, who or what gets blamed first — and is that actually the real cause, or just the most visible one?

Don’t be afraid to think about failure. Start small but be consistent. Run this on a low-stakes decision this week — not the biggest bet you’re about to make — so the habit is already in place by the time a decision that actually matters shows up.

References

• Altuntaş, B. (2012). Başarıda Tanrı Parçacığı [The God particle in success]. Destek Yayınları.
• Kahneman, D. (2011). Thinking, fast and slow. Farrar, Straus and Giroux.
• Klein, G. (2007). Performing a project premortem. Harvard Business Review, 85(9), 18–19.
• Seneca. (1969). Letters from a Stoic (R. Campbell, Trans.). Penguin Books.

Disclaimer: The views and opinions expressed in this article are solely my own and do not reflect the official policy or position of any past, present, or future employer or affiliated organisation. This content is intended for informational and educational purposes only and does not constitute professional advice.