Critical Thinking: Cornerstone to Making Good Decisions?

Businesses succeed and fail over time based on the thinkeffectiveness of their decision making process. There are the over-night wonders that stumble into the right market with the right product at the right time. However, the ability to survive, grow and fend off competition becomes dependent upon making good decisions and not relying on another lucky break.

The cornerstone to making good decisions and solving problems for successful companies is their critical thinking process. Critical thinking removes much of the emotional components (feelings, biases, politics) around an issue and allows for facts to be collected to objectively make a logical decision.

A typical reaction to submitting a decision to a critical thinking process is that it is a waste of time. Those close to the decision feel they know what needs to be done and want to act immediately. Companies that have adopted a consistent critical thinking discipline to making decisions realize that it avoids hasty decisions that need to be corrected later. Correcting a hasty or poorly thought out decision costs more (money, time, resources) than taking the time to weigh all of the facts and come to an informed, decision thereby reducing the risk of making a wrong decision.

Critical Thinking Process
Definition
Critical thinking is a multi-faceted process, which begins with accurately defining or describing the decision that needs to be made. I have witnessed a number of bad decisions based upon an incomplete definition, and weak assumptions, of the problem needing attention.

Data Collection and Analysis
Understand the factors that will be affected by making or not making the decision. This may require the collection of quantitative and qualitative information to understand the dynamics of the decision, validate assumptions, identify risk or likelihood of failure, and potential impact on other business operations.

In many cases, where a lot of multi-variable data is involved, it would be wise to model the decision in a spreadsheet so that interrelationships, direct and indirect data elements, can be understood and evaluated. Modeling or simulation of events is particularly useful if the outcome of the decision is measured over time. The ability to analyze, distill complex data, and to interpret impact on the business can be fundamental to making the best decision.

Decision Review and Critique
Present the decision under consideration to two or more people to get their perspective on the factors critical to the decision. This can be viewed as fire proofing the decision by others unrelated to those affected by the decision. The more significant the decision, the larger the group selected to review it, which may involve several groups.

When the process is complete, and if the decision is made to proceed, the information used in arriving at the decision should be documented and saved for later review. A review of good and bad outcomes will be beneficial to the overall development of the critical thinking process in your business.

Post Decision Review
Some decisions such as product direction, marketing programs, capital equipment decisions should be reviewed to determine if objectives were met – profit, ROI, quality, market penetration, customer satisfaction, etc. When shortfalls occur, the decision process should be reviewed to understand what was overlooked and decide whether the critical thinking process was compliant with proper practices.

Setting the Tone for Critical Thinking
Encouraging people in your organization to think critically can be a challenge. Much of our culture today is driven by emotional decision-making impulses. Too many purchases, commercial and personal, are made based on what people want rather than what they absolutely need. New employee interviews should include critical thinking questions to determine the potential and adaptability of the candidate to using critical thinking concepts and principles in the position they are being considered for.

Many businesses find it necessary to train their employees in basic thinking processes such as:

  • Statistics
  • Logic
  • Reasoning

Effective use of these thinking processes can help employees see past their emotions when making choices.

Teams should be encouraged to think critically, which starts by asking them how they make their decisions.

  • Are decisions based on a gut feeling or concrete proof?
  • Is the decision beyond someone’s intuition?

As the leader of the group or company, how you personally make decisions will have a great influence in the strength of critical thinking in your organization. You need to lead by example; therefore, you cannot be prone to quick, thoughtless decisions. Your decisions need to take all of the stakeholders into account as a model for your business.

Summary
If you aspire to build a business that will be successful over time, evaluate your decision-making process.

  • Is your personal critical thinking decision-making practice a good model for your company?
  • Do you insist upon a structured approach to problem solving and decision making?
  • Do you provide critical thinking skills training?
  • Does your critical thinking process include reviews to determine the effectiveness of the decision making process?

Making good, critical thinking based decisions will result in:
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  • More productive employees.
  • Higher return on investment.
  • Correcting fewer bad decisions.
  • Improved morale due to eliminating arbitrary (emotional) decisions.
  • A more successful and profitable business.

Critical thinking is the cornerstone of making good decisions and operating a successful company.

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