Mastering Strategic Decisions with Critical Thinking

Imagine your organization as a chessboard. Every move – a product launch, a new hire, a strategic shift – has complex consequences that ripple across the board. Without a keen understanding of strategy and foresight, your "game" is reduced to reactive moves and missed opportunities. Critical thinking is the grandmaster's skillset, allowing executives to anticipate threats, capitalize on opportunities, and ultimately win the game of business.

The Costly Culture of Guessing and Gut-Feelings

In our office, we have a life size chess set that we encourage associates and staff to play during downtime, because it activates the portion of the mind geared toward strategy and problem solving.  The game of chess is known to be a highly strategic game, often referred to as the game of kings. It also has statistical data supporting its ability to grow brain cells, improve math and language skills. The best trait is its ability to improve decision making. If there was one skill set that determines the outcomes of an executives future, it is most certainly decision making.  

In this article we will unpack why teams struggle to apply critical thinking associated with making great decisions, its effects, and how to avoid it in the future through engaging exercises.

In the high-stakes world of business, the pressure for quick decisions is unrelenting. However, a McKinsey survey revealed a startling truth: only 28% of executives feel their organizations consistently make high-quality decisions. Too often, decisions are based on intuition, past experience, or simply the most dominant voice in the room.

The consequences of this reliance on guesswork are far-reaching and costly.  In government, policies based on incomplete analysis or partisan bias can lead to ineffective legislation and social unrest. In economics, investment decisions driven by "hot tips" or market hype can create bubbles and recessions. In social issues, reactive solutions to complex problems like poverty or education, without deep understanding, often fail to address root causes. In families, financial choices based on emotional appeals or FOMO (fear of missing out) can lead to debt and instability. When it comes to enterprise, product launches based on flawed market research or internal groupthink can result in costly failures.

Small to mid-sized businesses (SMBs), the backbone of the economy, are particularly vulnerable. With fewer resources and less margin for error, poor decision-making can be devastating. It's no wonder that 90% of businesses fail within their first five years, with poor decision-making often playing a significant role.

The Principle of Truth and its Universal Intellectual Standards

To combat this crisis of decision-making, we turn to a framework for clear thinking: the Universal Intellectual Standards, developed by the Foundation for Critical Thinking. These standards offer a blueprint for evaluating the quality of reasoning and decision-making:

• Clarity: Are ideas presented clearly and understandably?

• Accuracy: Is the information free from errors and distortions?

• Precision: Is the information specific and relevant to the decision at hand?

• Relevance: Is the information directly related to the issue being considered?

• Depth: Does the analysis address the complexities and nuances of the problem?

• Breadth: Are diverse viewpoints and perspectives considered?

• Logic: Is the reasoning sound, consistent, and free from contradictions?

• Significance: Are the most important information and ideas given proper weight?

• Fairness: Is the thinking open-minded, impartial, and free from bias?

By applying these standards rigorously, leaders can uncover the truth beneath the noise and complexity of modern business.  These standards can be used as a guide for both self-assessment and the evaluation of others' thinking. They provide a framework for identifying strengths and weaknesses in reasoning, and for improving the overall quality of thinking. 

They all work together for the common good of establishing a critical principal of all success…Truth.  That’s right, if you want to guarantee success, focus on always abiding by the truth.  Not facts, political agendas, behavior, or cultural norms, just truth.  As leaders we should always be asking this question, “What is the truth?”  In doing so we never succumb to guessing or acting on half-baked ideas.

Practical Applications for Critical Thinking

So what is the difference between Guessing and Critical Thinking? The short answer is that they are both activating completely different parts of the brain. In addition, one form of decision making is easy and the other is hard.  In the section below we illuminate some key distinctions between the two in hope to make it easy to identify what may be transpiring in your culture.

Critical Thinking

• Prefrontal Cortex: This area is the brain's command center, responsible for higher-order thinking, planning, reasoning, and decision-making. It's heavily involved in analyzing information, evaluating evidence, and forming logical conclusions.

• Working Memory: This system temporarily holds information in the mind while it's being processed. During critical thinking, working memory helps us keep track of relevant details, compare different perspectives, and identify patterns or inconsistencies.

• Attentional Networks: These networks help us focus on specific aspects of a problem or situation, filtering out irrelevant distractions. They are crucial for sustained concentration and thoughtful analysis.

• Executive Functions: This set of cognitive skills includes things like inhibitory control (resisting impulsive responses), cognitive flexibility (shifting between different ideas or approaches), and self-monitoring (evaluating our own thinking). They play a vital role in critical thinking by allowing us to regulate our thought processes and avoid biases.

Guessing

• Intuitive Processing: Guessing often relies on intuition, a rapid and automatic form of thinking based on gut feelings, prior experiences, and unconscious associations.

• Pattern Recognition: The brain is constantly looking for patterns, and guessing can involve recognizing familiar patterns in a situation and making predictions based on those patterns.

• Emotional Centers: Emotions can influence our guesses, particularly when there's a sense of urgency or uncertainty. The limbic system, responsible for processing emotions, can be more active during guessing.

• Less Engagement of Prefrontal Cortex: While the prefrontal cortex is still active during guessing, it may be less engaged compared to critical thinking. This is because guessing relies more on quick heuristics and less on deliberate analysis.

Key Differences

• Speed: Guessing is often faster than critical thinking, as it relies on intuitive and automatic processes.

• Accuracy: Critical thinking is generally more accurate than guessing, as it involves a more thorough evaluation of evidence and logical reasoning.

• Cognitive Effort: Critical thinking requires more cognitive effort than guessing, as it involves sustained attention, working memory, and executive functions.

• Consciousness: Critical thinking is typically a more conscious process, whereas guessing can be more unconscious and automatic.

It's important to note that critical thinking and guessing are not mutually exclusive. We often use a combination of both in real-world situations. For example, we might start with a guess based on intuition, then use critical thinking to evaluate the validity of our guess and make a more informed decision.

Practical Applications for Critical Thinking

To embed critical thinking into daily operations here are a few components we recommend, and share with our clients at Marq Neasman Consulting:

• Structured Meetings: Utilize frameworks like the "6 Thinking Hats" to encourage multi-faceted analysis of problems. Employ DISC assessments to understand team communication styles and potential biases.

• Decision Journals: Create a documented history of key decisions, outlining the rationale, evidence, and potential risks. This promotes accountability and facilitates learning from past choices. The High-Performance Leadership Journal is our bias option.

• Innovation Labs: For larger organizations, establish dedicated spaces for vetting new ideas through controlled experiments, fostering a culture of innovation and calculated risk-taking.  Google provides a great example of this with their Area 120 project.

• Red Team Challenges: Assemble a team to rigorously challenge proposed solutions, acting as devil's advocates to identify potential flaws or oversights.  This is always fun and illuminates new solutions everytime.  We recommend doing this once a month at minimum.

• Root Cause Analysis: When problems arise, go beyond surface-level symptoms. Use tools like the "5 Whys" to uncover the underlying causes and implement effective solutions.

• Filtering Subjectivity: Encourage team members to explicitly acknowledge their personal biases and assumptions during discussions, promoting a more objective evaluation of information.  Bringing clarity between advice, opinions, judgement, and critiques are essential to finding truth in all that is presented.  It’s not just about information, it’s about insight. 

A Real-World Example: The Boeing Transformation

In the aftermath of the 737 MAX crises, Boeing faced a crisis of confidence, both internally and externally. The company recognized the need for a fundamental shift in its decision-making culture. To address this, Boeing embarked on a comprehensive transformation focused on enhancing critical thinking throughout the organization.

This initiative involved several key elements:

• Safety Culture Overhaul: Boeing prioritized safety over production pressures, encouraging employees at all levels to raise concerns without fear of reprisal.

• Enhanced Engineering Review: The company strengthened its engineering review processes, involving independent experts and diverse teams to challenge assumptions and identify potential flaws.

• Data-Driven Decision Making: Boeing invested in advanced analytics and simulation tools to better understand risks and potential consequences before making critical decisions.

• Leadership Development: The company implemented training programs to develop critical thinking skills among its leaders, fostering a culture of open inquiry and constructive debate.

The results of this transformation have been significant:

• Improved Safety Record: Boeing has made significant strides in improving its safety record, with enhanced scrutiny of new designs and a renewed focus on rigorous testing.

• Increased Transparency: The company has become more transparent about its decision-making processes, engaging with regulators and stakeholders more openly.

• Enhanced Innovation: By encouraging diverse perspectives and critical analysis, Boeing has fostered a more innovative environment, exploring new technologies and approaches.

• Restored Trust: While the road to full recovery is ongoing, Boeing has made progress in rebuilding trust with customers, regulators, and the public.

This case study demonstrates the tangible impact of prioritizing critical thinking within a large, complex organization. By embedding critical thinking principles and practices into its culture, Boeing has not only addressed its immediate challenges but also laid the foundation for long-term success.

In conclusion, critical thinking is not a luxury but a necessity for organizations navigating the turbulent waters of the modern world. By embracing critical thinking, executives can steer their ships with greater confidence, resilience, and ultimately, achieve sustainable success.

Power Thought

In summation, these standards are all at work for the sake of one primary purpose, the law of truth. They also create a culture that recognizes not all problems have easy answers. This same culture will value diverse perspectives, and encourage dissenting opinions.  By creating safe spaces for constructive debate, a wider range of viewpoints leads to richer analysis.

By acknowledging the limits of your own knowledge and being willing to learn from others, regardless of their position you can display intellectual humility to win further trust of employees and staff.  Make sure you are basing decisions on data, research, and expert analysis rather than anecdotes or personal biases. In other words, demand evidence.  Lastly, these standards are excellent for challenging the status quo.  Don't be afraid to question existing processes or beliefs. Innovation often comes from challenging conventional wisdom.

In the heart of High-Performance Leadership, share this article with a fellow executive you feel could benefit a sound framework for decision-making and critical thought. Remember, checkmates are never a coincidence.