The latest economic crisis highlighted a plethora of bad decisions, made by well-educated leaders using the best tools and data available. As these decisions are analysed and criticised, an alternative school of thought is becoming mainstream. Both behavioural economics and neuroscience confer that decision-making is, in fact, emotional, irrational and based on tacit assumptions.

Savvy decision makers are now turning to technical and cognitive tools to guard against making poor decisions. One such tool is critical thinking, an indispensable management aid that is as important as emotional intelligence.

Critical thinking is neither creative nor strategic thinking. It is a way of striving for the highest level of reasoning and judgment that leads to sound decision-making. It is thinking about thinking. The critical thinking process involves three  main actions:

1. Become aware that mental biases exist

A mental bias is a distortion in the way we perceive reality and process information. We should all know how they affect our thinking in order to avoid them and their consequences. More than 100 mental biases have been documented. Psychologists Amos Tversky and Daniel Kahneman first introduced the idea of mental biases – or mistakes – in 1972, and the latter was awarded a Nobel Prize in 2002 for this work. Here are three common mental biases:

Framing effects: Packaging is a multi-billion-dollar industry because how an object is presented affects its desirability. How a problem is framed or presented has also been shown to have far-reaching consequences on our conclusions.

Have a look at this sequence of numbers 5-4-9-1-7-10-3-2. 6 and 8 have been omitted. Can you see where they belong? Tricky, isn’t it?

This problem is presented numerically, which makes you think numbers. In fact, these numbers are in alphabetical order, which is hard to see if you are in a numeric frame of mind.

Those trained in creative subjects or are critical thinkers are capable of purposefully changing their frame or perspective on a problem to come up with better solutions, faster.

Decision-making tools that encourage different points of view, such as Edward de Bono’s Six Thinking Hats or Systems Thinking, help avoid falling into such framing traps. However, decision makers should acknowledge that their initial frame of mind may not be the only one, or the best, with which to tackle a problem.

Confirmation bias is a systematic error where we look for, recall or interpret information so that it confirms our point of view. Perhaps you have your heart set on a certain product that you research on the internet before buying. You may notice that you gather more positive than negative reviews.

This bias can lead to disastrous decisions, especially in organisational, military and political contexts where leaders tend to surround themselves with like-minded people rather than those who challenge their decisions.

Have you ever signed for a gym membership or timeshare and used it less than you expected or used a new credit card more than you intended? Have you ever been dead sure of an answer only to be surprised by an unexpected outcome?

Our inbuilt overconfidence allows us to triumph over many of life’s setbacks, but can have an adverse impact on the quality of our decision-making. We can be overconfident in our abilities and fall in love with our decisions when our ego is left unchecked.

2. Reduce biases that lead to suboptimal outcomes

Admitting that each of us makes mental mistakes is the first and most important step in the critical thinking process. Thereafter, the quality of our decision-making can be significantly boosted with some simple steps:

• Look for evidence that tests your ideas, not merely confirms them.

• Before dismissing negative feedback, try to defend it.

• Actively seek out at least two contrary opinions, if they aren’t forthcoming.

• Calibration is an effective way to keep overconfidence in check. To calibrate your decision-making prowess, track the results of every professional decision that you take. You will soon detect behavioural patterns in both successes and failures.

These steps are surprisingly hard to do. However,
if you want to make the best possible decisions, you need to take the necessary steps to avoid mental biases.

Conventional wisdom also leads to all sorts of decision-making evils. If the status quo or other conventional thinking is an input in decision-making, it is seldom challenged because it’s widely accepted. Rooting out any given facts in a problem and challenging the assumptions underlying them may change the dynamics and conclusions of the problem. Questioning popular thinking is uncomfortable and requires you to make unpopular decisions. But for a critical thinker, sound judgment is more important than popularity.

3. Using reflective thinking regularly

When children fail, we comfort them with the time-tested phrase: “It’s OK to make a mistake, but learn from it so that you don’t repeat it.” When we succeed at something no one says: “That’s awesome, what did you learn from your success?”

Learning from our successes is as important as learning from our failures. Reflecting on and learning from our successes helps us identify areas of positive deviance. This shows what worked and what we should do – and avoid the next time.

Learning from other’s mistakes and successes is a risk-free way of becoming a better thinker.

However, we seldom explore other people’s foibles as they usually happen in a context different to our own. Can a CEO in manufacturing learn from the mistakes of a stockbroker or a politician?

Yes. While the outcome of the error is indeed irrelevant for the CEO, the thought process and mental mistakes involved are applicable in various decision-making contexts.

Becoming a critical thinker is much like learning a new language. We can read about it extensively, but it’s only when we practise that we begin the process of improving our thinking and decision-making, and hence the quality of our professional and personal lives.

 

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