When faced with critical decisions, are you equipped to think critically?

What is critical thinking and how is it helping leaders make better decisions?

Leaders make decisions every day based on explicit assumptions and non-emotive, rational processes.

Or do they?

The latest economic crises 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 both technical and cognitive tools to guard against making poor decisions. One such tool is critical thinking, an indispensable management aid right up there with 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 lead to sound decision-making. It is thinking about thinking. The critical thinking process involves 3 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. Over 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 multibillion-dollar industry because how an object is presented affects its desirability. How a problem is framed or presented has been shown to have far reaching consequences on our conclusions as well.

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 presented numerically, which makes you think in 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 and 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 De Bono’s Six Thinking Hats or Systems Thinking help to avoid falling into such framing traps. However, decision makers should acknowledge that their initial frame of mind may not be the only one nor 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 own 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 really challenge their decisions.

Have you ever signed up for a gym membership or timeshare and used it less than you expected, or used a new credit card more than you promised yourself you would? 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 critical 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 2 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 will 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 one to make unpopular decisions, but for a critical thinker popularity is not more important than sound judgment.

3. Using reflective thinking regularly

When children fail, we comfort them with the time-tested phrase; “It’s okay 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 successes is as important as learning from 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 not only avoid 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. Whilst 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 practice that we begin the process of improving our thinking, our decision making and hence the quality of our professional and personal lives.

Case Study

History is littered with disastrous decision-making. The build-up of the dotcom bubble in the late 1990s showed symptoms of confirmation bias and herd behaviour. Many investors ignored information showing an impending downturn in stock valuations as these contradicted their own blue-sky assessments. In the build up to the war on terror, George Bush seemed to seek out evidence only in support of his theory on Iraq. Critical thinking could have changed the course of history in both cases.

A stunning success of critical thinking comes from a construction materials company in Watsonville, California; Graniterock. They craved a reputation for delighting their customers and in one smart strategy they changed the frame within which their clients perceived them, reduced overconfidence from sales and management staff, challenged conventional wisdom and forced immediate calibration on their entire organisation. How? The following was printed on their invoices: “If you are not satisfied for any reason, don’t pay us for it. Simply scratch out the line item, write a brief note about the problem, and return a copy of this invoice along with your check for the balance.”

This was a radical and extremely successful policy that has changed over time, but its premise still underlies their customer strategy today.

About the Author

Prof Tremaine du Preez is an Adjunct Professor for Critical Thinking at SP Jain School of Global Management and the author of ‘Think Smart, Work Smarter’ published by Marshall Cavendish 2011. She is also an international keynote speaker and author on both critical thinking and leadership.

Make an Enquiry

SP Jain in the News

From Classroom to Corporate: Gaining Real-World Supply Chain Insights through Global MBA

What is an Executive MBA and How It Can Help You Boost Your Career

Divya Raj, EMBA 2016, Conquers Everest Base Camp

Global MBA Insights: Jaiveer Singh Khera’s Learning Journey Through Cultural Immersion

How an MGB Degree Can Launch Your Global Career

Building Awfis from Inception to IPO: SPJ Alumni Spotlight with Sumit Lakhani

Success Knows No Borders: Jiaqi’s Journey from China to Global Leadership

From Boardrooms to Base Camp: Leadership Lessons on the Path to Everest

Journey of growth and transformation of a GMBA Alumni

Reflecting on a Financial Career and the Impact of SP Jain Global’s Professional Excellence Award

ELO Technology Reinventing Classroom Learning for EMBA Students

A Journey to Marketing Excellence: Insights from a Young Alumnus of the Year Award Winner

Beyond the Cuisine: A Journey Through Emirati Culture

Brand Ambassador Award Winner Yogesh’s Journey from IT Specialist to Chief Data Scientist

A Journey of Excellence and Impact: Celebrating Piyush Garg’s Recognition- Social Impact Award winner

A story of growth across SP Jain Global, Microsoft and Academia: Conversation with Mai Nguyen

From Factory Floor to Executive Suite: My Journey with SP Jain Global’s Executive MBA

Revolutionizing Global Logistics: The Power of Supply Chain Management Education

The Compass of Compassion

Bridging Ancient Wisdom with Modern Wellness: SPJ Alumni Spotlight with Dr Rekha Radhamony (EMBA 2018)

What Makes S P Jain’s Global MBA, ‘Global’?

How have we evolved our Executive MBA approach to meet the educational needs of the working professional?

Navigating Your Career Path: The Continuous Journey of Reskilling and Upskilling

Building Strong Foundational Skills in Data Science – Joshua Benzon’s BDS Journey of Passion and Resilience

Managerial Experience: Is It Essential to Have Before Applying for an Executive MBA?

Master Your Executive MBA Journey Through Effective Study Strategies

The story of India’s first super app – Abhisyant Anasapurapu (BBA 2020)

Life Inside & Outside SP Jain Global

What is Machine Learning in Data Science?

My Journey at SP Jain: The one I’ll Always Cherish

The Global Advantage: How Siddharth Menon is Thriving in the New Business World

Navigating Rapid Technological Advances in the Banking Sector – SP Jain Global Alumni Spotlight with Suresh Lalwani (EMBA 2007)

Mastering Your GMBA Finances: Comprehensive Guide to Costs and Funding Options

The Journey Itself Was So Beautiful – Reflections From My Doctoral Research at SP Jain Global

Navigating the Luxury Industry: My Journey from SP Jain Global to LVMH

Leading a Sustainable Future in the Energy Sector – SP Jain Global Alumni Spotlight with Azhar Othman (EMBA 2014)

‘How is sustainability transforming the business landscape?’ – Prof. Shrinivas Shikaripurkar

Gaining Knowledge, Network, and Resilience through the Global MBA – Insights from Ernst & Young’s Dhaerya Grover

How I Landed My Dream Role at EY

How my GMBA helped me become an Oil Operator at Trafigura

Exploring Boundless Possibilities in the World of Data – Devashish Upadhyay’s BDS Journey

How can an EMBA Help you Advance in your Career?

Converting an Internship into a Full-Time Role: Insights from Chahak Jain (MGB 2023)

What I Learnt About Revolutionising the Future of Work from Reliance Retail’s Anil Kumar Misra

The Road Ahead in the Automotive Industry – SPJ Alumni Spotlight with Aastha Sinha (MGB 2015)

Nurturing Professional Growth in the Ever-Evolving Business Landscape: Anuj Bhowmick’s DBA Journey

How My Global MBA Prepared Me for a Strategic Role at Hindustan Coca-Cola Beverages

Beyond Engineering: A Year of Discovery and Adventure Through My Global MBA

Elevate Learning with Generative AI: A Game Changer for Education

Securing a Dream Job At ClickUp – Atharva Kamtekar’s (BBA 2023) SP Jain Global Journey

Posts by Tag

When faced with critical decisions, are you equipped to think critically?

RELATED EVENTS