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CRITICAL THINKING FOR BUSINESS

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Introduction

The formalized process for directing problem solving is core to the academic process. Can business decisions be improved with a more disciplined approach to evaluating new information?

What is critical thinking?

“Critical thinking is that mode of thinking – about any subject, content, or problem – in which the thinker improves the quality of his or her thinking by skillfully taking charge of the structures inherent in thinking and imposing intellectual standards upon them.”

from Critical Thinking by Richard Paul and Linda Elder. 1

According to the The Foundation for Critical Thinking, a well-cultivated critical thinker: 2

  • raises vital questions and problems, formulating them clearly and precisely
  • gathers and assesses relevant information, using abstract ideas to interpret it
    effectively
  • comes to well-reasoned conclusions and solutions, testing them against
    relevant criteria and standards
  • thinks open-mindedly within alternative systems of thought, recognizing
    and assessing, as need be, their assumptions, implications, and practical
    consequences
  • communicates effectively with others in figuring out solutions to complex problems

Benefits of Critical Thinking

Dan and Chip Heath performed an extensive evaluation of the available research on business decision making. The findings of which were presented in their 2013 book, Decisive.

In it, they listed the “Four Villains of Decision Making” 3

  • Narrow Framing
  • Confirmation Bias
  • Short term emotion
  • Overconfidence

Critical thinking provides a formalized approach to address each area. When attempting to solve a difficult or ambiguous business problem, it helps to utilize a systematic approach.

Example: Applying This Standard to Business Information

Problem Definition
Have you explicitly stated the business question or problem to solve in a clear, precise manner? Could it be understood by someone from outside your industry or organization without additional explanation?
Information Quality
Have you conducted a thorough search for relevant information? Does it include data obtained from direct observation? Does it include data from conflicting or opposing arguments? Is the source information publicly viewable with clear organization and references?
Well-Reasoned Solutions
Does the proposed solution follow a logical path from the understanding presented in the problem exploration?
Appropriately tested
Academic or “scientific” labels are used to give validity and authority to an idea regardless of whether the research or theory has been developed or validated according to that standard. If presented as academic or scientific, has the theory been appropriately reviewed, tested, and verified?
Accounts for competing solutions
Have alternative or competing solutions been recognized and assessed? Specifically, their assumptions, implications, and practical consequences.
Effective Issue communication
Are the findings and recommendations communicated in a clear manner?

Conclusion

The quality of a business decision reflects the quality of the underlying decision process. The application of critical thinking techniques helps to identify and avoid bad solutions that reflect a poor understanding of the underlying problem, are supported by misleading information, or exhibit sloppy reasoning.

Resources

PDF: Mini Guide to Critical Thinking

References

  1. http://goo.gl/bdirZm
  2. http://www.criticalthinking.org/files/Concepts_Tools.pdf
  3. Heath, Chip; Heath, Dan (2013-03-26). Decisive: How to Make Better Choices in Life and Work (Kindle Locations 194-196). Crown Publishing Group. Kindle Edition. “