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How to develop critical thinking skills in finance & accounting

Stephen Moir

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When it comes to finance and accounting roles, employers are increasingly looking for problem solvers, not a number-crunchers. Over recent years, we have seen an increasing demand for people who can analyse and interpret data and think critically.

What is critical thinking.

A critical thinker is a problem solver. They are able to evaluate complex situations, weigh-up different options and reach logical (and often quite creative) conclusions.

Critical thinkers are highly-valued by employers as they innovate and make improvements, without taking unnecessary risks. Chartered Accountants Australia and New Zealand recently identified that it was in the top 10 attributes that will help you get noticed in the job market.

Why are critical thinking skills important?

Once you have learnt how to develop critical thinking skills you will be better able to add value to data, interpret trends within the business, understand how people and performance intersect and take-on broader commercial outlook that benefits the business.

How to develop critical thinking skills

Critical thinking comes naturally to some people, but it is also a skill than can be practiced. Here are some tips for how to develop your own critical thinking skills :

• Examine: Self-awareness is the foundation of critical thinking. It allows you to play to your strengths and address your weaknesses. Question how and why you do things the way you do.
• Analyse: Look for opportunities to grow and improve. Consider alternative solutions to the problems you encounter in your work.
• Explain:  Clear communication is key. Get into the habit of talking through your reasoning and conclusions with colleagues.
• Innovate: Develop an independent mind-set. Find ways to think outside the box and challenge the status quo. Make sure your decisions are well-thought out. A critical thinker is logical as well as creative.
• Learn: Keep an open and well-oiled mind. Brush-up on your problem-solving skills by doing brain-teasers or trying to solve problems backwards. Keep up-to-date with professional learning opportunities . You may also need to unlearn past mindsets in order to grow and move forward.

How to apply critical thinking skills in your current role

Could you implement a new process or procedure that enhances performance or profitability? You might also consider volunteering for a new project or responsibility that gives you the opportunity to innovate and take on a new challenge. It’s a great way to broaden your skillset and gain exposure to other parts of the business.

Surround yourself with other critical thinkers in the organisation and work together towards achieving a problem-solving culture. Ask questions, and always look for opportunities for continual learning.

Changing roles to develop critical thinking skills 

At Moir Group, we are passionate about finding the right cultural fit between people and the organisations they work with. If you are a critical thinker, it’s worth looking for a stimulating work environment that encourages innovation and non-conformist thinking when considering your next role.

How to demonstrate critical thinking skills at an interview

During an interview, use examples from your past experiences to demonstrate your problem-solving abilities. Show that you can be analytical, weigh-up pros and cons, consider other view points and be creative in your solutions. Clearly articulating your thought process is key.

Sometimes an interviewer will ask you to simplify the complex as a way of determining your clarity of thought. For example: “How would you explain the state of the economy to a kindergarten child?” In instances like these, the focus will be on how you explain your reasoning, rather than achieving a ‘right’ answer. Learn more here.

If you’re looking to take that next step in your career, we can help. Get in touch with us here .

2 Responses to “How to develop critical thinking skills in finance & accounting”

Hi Stephen,

The above is very useful and very valuable for employers. However my understanding of critical thinking is slightly different from above. I recently listened to a course in critical thinking by Professor Steven Novella of Yale School of Medicine. To keep it simple it is to do with assessing the veracity of views and statements made by oneself, others and media being constantly aware of the many biases, the flaws and fabrications of memory, half truths, unspoken truths, and even lies. So it becomes key to adopt an inquisitive mindset, to look for external evidence that supports argument and not just wishful or hopeful thinking.

Just wanting to add to the debate as this is a really important area.

Hi Richard,

We are pleased that found this article useful. Thanks for your sharing your thoughts about critical thinking.

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Improving Critical Thinking Skills

November 01, 2021

By: Sonja Pippin , Ph.D., CPA ; Brett Rixom , Ph.D., CPA ; Jeffrey Wong , Ph.D., CPA

Whether working with financial statements, analyzing operational and nonfinancial information, implementing machine learning and AI processes, or carrying out many of their other varied responsibilities, accounting and finance professionals need to apply critical thinking skills to interpret the story behind the numbers.

Critical thinking is needed to evaluate complex situations and arrive at logical, sometimes creative, answers to questions. Informed judgments incorporating the ever-increasing amount of data available are essential for decision making and strategic planning.

Thus, creatively thinking about problems is a core competency for accounting and finance professionals—and one that can be enhanced through effective training. One such approach is through metacognition. Training that employs a combination of both creative problem solving (divergent thinking) and convergence on a single solution (convergent thinking) can lead financial professionals to create and choose the best interpretations for phenomena observed and how to best utilize the information going forward. Employees at any level in the organization, from newly hired staff to those in the executive ranks, can use metacognition to improve their critical assessment of results when analyzing data.

THINKING ABOUT THINKING

Metacognition refers to individuals’ ability to be aware, understand, and purposefully guide how to think about a problem (see “What Is Metacognition?”). It’s also been described as “thinking about thinking” or “knowing about knowing” and can lead to a more careful and focused analysis of information. Metacognition can be thought about broadly as a way to improve critical thinking and problem solving.

In their article “Training Auditors to Perform Analytical Procedures Using Metacognitive Skills,” R. David Plumlee, Brett Rixom, and Andrew Rosman evaluated how different types of thinking can be applied to a variety of problems, such as the results of analytical procedures, and how those types of thinking can help auditors arrive at the correct explanation for unexpected results that were found ( The Accounting Review , January 2015). The training methods they describe in their study, based on the psychological research examining metacognition, focus on applying divergent and convergent thinking.

While they employed settings most commonly encountered by staff in an audit firm, their approach didn’t focus on methods used solely by public accountants. Therefore, the results can be generalized to professionals who work with all types of financial and nonfinancial data. It’s particularly helpful for those conducting data analysis.

Their approach involved a sequential process of divergent thinking followed by convergent thinking. Divergent thinking refers to creating multiple reasons about what could be causing the surprising or unusual patterns encountered when analyzing data before a definitive rationale is used to inform what actions to take or strategy to use. Here’s an example of divergent thinking:

The customer satisfaction metric employed by RNO Company has increased steadily for the quarter, yet its sales numbers and revenue have declined steadily for the same period. Jill, a senior accountant, conducted ratio and trend analyses and found some of the results to be unusual. To apply divergent thinking, Jill would think of multiple potential reasons for this surprising result before removing any reason from consideration.

Convergent thinking is the process of finding the best explanation for the surprising results so that potential actions can be explored accordingly. The process consists of narrowing down the different reasons by ensuring the only reasons that are kept for consideration are ones that explain all of the surprising patterns seen in the results without explaining more than what is needed. In this way, actions can be taken to address the heart of any problems found instead of just the symptoms. On the other hand, if the surprising result is beneficial to an organization, it can make it easier to take the correct actions to replicate the benefit in other aspects of the business. Here’s an example of convergent thinking:

Washoe, Inc.’s customer satisfaction metric has increased steadily for the quarter, yet sales numbers and revenue have steadily declined for the same period. Roberto found this result to be surprising. After employing divergent thinking to identify 10 potential reasons for this result, such as “the reason that customers seem more satisfied is that the price of goods has been reduced, which also explains the reduction in sales revenue.” To apply convergent thinking, Roberto reviewed each reason that best fit. If the reason doesn’t explain the unusual results satisfactorily, then it will either be modified or discarded. For example, the reduced price of goods doesn’t explain all of the results—specifically, the decrease in units sold—so it needs to either be eliminated as a possible explanation or modified until it does explain all the results.

Exploring strategic or corrective actions based on reasons that completely explain the unusual results increases the chance of correctly addressing the actual issue behind the surprising result. Also, by making sure that the reason doesn’t contain extraneous details, unneeded actions can be avoided.

It’s important to note that a sequential process is required for these types of thinking to be most effective. When encountering a surprising or unexpected result during data analysis, accounting professionals must first focus strictly on divergent thinking—thinking about potential reasons—before using convergent thinking to choose a reason that best explains the surprising result. If convergent thinking is used before divergent thinking is completed, it can lead to reasons being picked simply because they came to mind right away.

LEARNING THE PROCESS

Improving divergent and convergent thinking can benefit employees at any level of an organization. Newer professionals who don’t have as much technical knowledge and experience to draw upon may be more likely to focus on the first explanation that comes to mind (“premature convergent thinking”) without fully considering all of the potential reasons for the surprising results. Experienced individuals such as CFOs and controllers have more technical knowledge and practical experience to rely on, but it’s possible these seasoned employees fall into habits and follow past patterns of thought without fully exploring potential causes for surprising results.

Instructing all accounting professionals on how to think about surprising results can help them have a more complete understanding of the issues at hand that will help guide actions taken in the future. It can lead to a more creative approach when analyzing information and ultimately to better problem solving.

When teaching employees to use divergent and convergent thinking, the goal is to get them to focus on what should be done once they identify information that suggests a surprising result has occurred. The first step is to learn how to properly use divergent thinking to create a set of plausible explanations more likely to contain the actual reason for the surprising results. There’s a three-step method that individuals can follow (see Table 1):

• Ask a broad question that reflects the goal you have: For instance, what is it about the current information that suggests a potential surprising event? Or what led to this event that can help predict future occurrences?
• Answer that question with a complete sentence: Be sure the answer includes a description of the information that suggests a potential surprising event.
• Turn the broad question into a creative challenge: Identify the plausible reasons that could have led to the indications of a surprising event.

Once employees have a good grasp of how to use divergent thinking, the next step is to instruct them in the proper use of convergent thinking, which involves choosing the best possible reason from the ones identified during the divergent thinking process. Potential reasons need to be narrowed down by removing or modifying those that either don’t fully explain the surprising results or that overexplain the results.

Two simple questions can help individuals screen each of the possible explanations generated in the divergent thinking process (see Table 2):

• Can I think of transactions or events that would be considered expected but are accounted for by my ­explanation?
• Can I think of transactions or events that aren’t accounted for by my explanation but are unusual?

The first question is designed for an individual to think about whether there are other events outside of the current issue that fit the explanation: “Does the explanation also address phenomena that aren’t related to or outside the scope of the surprising result that’s being studied?” If the answer is “yes,” then this is a case of overexplanation. Consider, for example, a scenario involving an increase in bad debts. Relaxing credit requirements may explain the increase, but they would also explain a growth in sales and falling employee morale due to working massive amounts of overtime to make products for sale.

The second question is designed to think about whether an explanation only accounts for part of the phenomenon being observed: “Does the explanation address only part of what’s being observed while leaving other important details unexplained?” If the answer is “yes,” then it’s an under-explanation. For example, consider a decline in sales. An economic downturn at the same time as the decline may be a possible explanation, but it might only be part of the problem. A drop in product quality or a drop in demand due to obsolescence could also be causing sales to decline.

If the answer to either screening question is “yes,” then the explanation needs to be discarded from consideration or modified to better address the concern. In the case of over-explanation, the reason is too general and may lead to action areas where none is needed while still not addressing the actual issue. For underexplanation, the reason is incomplete because it accounts for only a portion of the phenomenon observed, thus action may only address a symptom and not the actual root problem.

If the answer to both questions is “no,” then the explanation is viable. The chosen reason neither overexplains nor underexplains the issue at hand, making it more likely that the recommended solution or plan of action based on that reason will be more successful at addressing the actual cause of the issue.

Divergent and convergent thinking are two distinct processes that work in conjunction with each other to arrive at potential reasons for the results they observe. Yet, as previously noted, the two ways of thinking must be conducted separately and sequentially in order to obtain optimal results. Divergent thinking must be applied first in order to achieve a diverse set of potential reasons. This will maximize the probability of generating a feasible reason that explains the results correctly. After the set of potential reasons has been generated using the divergent thinking approach, convergent thinking should be used to methodically remove or modify the reasons that don’t fit with the surprising results.

If both divergent thinking and convergent thinking are done simultaneously, premature convergence can lead to a less-than-optimal reason being chosen, which may lead to taking the wrong course of action. Thus, it’s important with training to instruct employees in the use of both divergent thinking and convergent thinking and to use the types of thinking sequentially.

ORGANIZATIONAL TRAINING

Learning to apply divergent and convergent thinking can require a substantial time commitment. The process we’ve described here is designed to enhance critical thinking and problem-solving skills. It outlines a general approach that doesn’t provide specific guidance on the best methods to analyze data or complete a task but rather focuses on successful methods to think of a diverse set of reasons for any surprising results and then how to choose the best explanation for that result in order to be able to recommend the most appropriate actions or solutions.

Individuals can practice the approach we’ve described on their own, but each organization will likely have its own preferred way to approach the analyses. Plumlee, et al., used training modules in their study that could be employed in a concerted effort by a company, with supervisors training their employees. We estimate that a basic training session would take about two hours. Complete training with practice and feedback would require about four hours—which could grow longer with even more for intensive training.

One area where this training could be very effective in helping employees is data analytics. In the past decade, an increasing amount of accounting and financial work involves or relies on data analysis. Data availability has increased exponentially, and companies use or have developed software that generates sophisticated analytical results.

Typical data analysis procedures accounting professionals might be called on to perform include things such as ratio and trend analyses, which compare financial and nonfinancial data over time and against industry information to examine whether results achieved are in line with expectations for strategic actions. Additionally, analyses are forward-looking when performance measures examined are leading indicators.

In order to perform data analytics effectively, accounting professionals must exercise sufficient judgment to critically assess the implications of any surprising results that are found. The quality of judgments and understanding the best ways to conduct and interpret the information uncovered by data analytics have typically been a function of time spent on the job along with training. At the same time, however, it’s commonplace that many of these analyses are performed by newer professionals.

Training in metacognition will help these employees more effectively and creatively reach conclusions about what they’ve observed in their analysis. Since the method discussed provides general instruction, each organization can customize the approach to best fit its own operations, strategies, and goals. Implementing a training program can be worth the investment given the importance of critical thinking throughout the process of evaluating operating results. Avoiding potential failures with interpreting results that could be prevented would seem to warrant the consideration of metacognitive training.

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Critical thinking for accounting and finance.

No skill is more important in business today than the ability to understand, analyze, and act on information effectively and responsibly. Finance and Accounting professionals who are also savvy, sharp critical thinkers can cut through ambiguity and information overload to quickly zero in on what is really important. This session shares cognitive techniques and critical thinking tools to enhance decision-making under pressure and strengthen your impact.

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Examine cognitive techniques and critical thinking tools to enhance decision-making under pressure and strengthen your impact

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• Cognitive techniques
• Critical thinking tools
• Decision making under pressure

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Leaders in an organization who want to improve their communication and critical thinking skills

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Catch These Benefits! 13 Examples of Critical Thinking in the Workplace

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Your team is dealing with a sudden decrease in sales, and you’re not sure why.

When this happens, do you quickly make random changes and hope they work? Or do you pause, bring your team together , and analyze the problem using critical thinking?

In the pages ahead, we’ll share examples of critical thinking in the workplace to show how critical thinking can help you build a successful team and business.

Ready to make critical thinking a part of your office culture?

Let’s dive in!

What Is Critical Thinking? A Quick Definition

Critical thinking is the systematic approach of being a sharp-minded analyst. It involves asking questions, verifying facts, and using your intellect to make decisions and solve problems.

The process of thinking critically is built upon a foundation of six major steps:

• Comprehension
• Application
• Creation/Action

First, you gather “knowledge” by learning about something and understanding it. After that, you put what you’ve learned into action, known as “application.” When you start looking closely at the details, you do the “analysis.”

After analyzing, you put all those details together to create something new, which we call “synthesis.” Finally, you take action based on all your thinking, and that’s the “creation” or “action” step.

Examples of Critical Thinking in the Workplace

Even if the tasks are repetitive, or even if employees are required to follow strict rules, critical thinking is still important. It helps to deal with unexpected challenges and improve processes.

Let’s delve into 13 real examples to see how critical thinking works in practice.

1. Evaluating the pros and cons of each option

Are you unsure which choice is the best? Critical thinking helps you look at the good and bad sides of each option. This ensures that you make decisions based on facts and not just guesses.

Product development : For example, a product development team is deciding whether to launch a new product . They must evaluate the pros and cons of various features, production methods, and marketing strategies to make an informed decision. Obviously, the more complete their evaluation is, the better decisions they can make.

2. Breaking down complex problems into smaller, manageable parts

In the face of complex problems, critical thinkers are able to make the problem easier to solve. How? They create a step-by-step process to address each component separately.

Product deliveries and customer support . Imagine you work in a customer service department, and there has been a sudden increase in customer complaints about delayed deliveries. You need to figure out the root causes and come up with a solution.

So, you break down the problem into pieces – the shipping process, warehouse operations, delivery routes, customer communication, and product availability. This helps you find out the major causes, which are:

• insufficient staff in the packaging department, and
• high volume of orders during specific weeks in a year.

So, when you focus on smaller parts, you can understand and address each aspect better. As a result, you can find practical solutions to the larger issue of delayed deliveries.

3. Finding, evaluating and using information effectively

In today’s world, information is power. Using it wisely can help you and your team succeed. And critical thinkers know where to find the right information and how to check if it’s reliable.

Market research : Let’s say a marketing team is conducting market research to launch a new product. They must find, assess, and use market data to understand customer needs, competitor tactics, and market trends. Only with this information at hand can they create an effective marketing plan.

4. Paying attention to details while also seeing the bigger picture

Are you great at noticing small things? But can you also see how they fit into the larger picture? Critical thinking helps you do both. It’s like zooming in and out with a camera. Why is it essential? It helps you see the full story and avoid tunnel vision.

Strategic planning . For instance, during strategic planning, executives must pay attention to the details of the company’s financial data, market changes, and internal potential. At the same time, they must consider the bigger picture of long-term goals and growth strategies.

5. Making informed decisions by considering all available information

Ever made a choice without thinking it through? Critical thinkers gather all the facts before they decide. It ensures your decisions are smart and well-informed.

Data analysis . For example, data analysts have to examine large datasets to discover trends and patterns. They use critical thinking to understand the significance of these findings, get useful insights, and provide recommendations for improvement.

6. Recognizing biases and assumptions

Too many workplaces suffer from unfair and biased decisions. Make sure yours isn’t on this list. Critical thinkers are self-aware and can spot their own biases. Obviously, this allows them to make more objective decisions.

Conflict resolution . Suppose a manager needs to mediate a conflict between two team members. Critical thinking is essential to understand the underlying causes, evaluate the validity of each person’s opinion, and find a fair solution.

Hiring decisions . Here’s another example. When hiring new employees, HR professionals need to critically assess candidates’ qualifications, experience, and cultural fit. At the same time, they have to “silence” their own assumptions to make unbiased hiring decisions.

7. Optimizing processes for efficiency

Critical thinking examples in the workplace clearly show how teams can improve their processes.

Customer service . Imagine a company that sells gadgets. When customers have problems, the customer service team reads their feedback. For example, if many people struggle to use a gadget, they think about why that’s happening. Maybe the instructions aren’t clear, or the gadget is too tricky to set up.

So, they work together to make things better. They make a new, easier guide and improve the gadget’s instructions. As a result, fewer customers complain, and everyone is happier with the products and service.

8. Analyzing gaps and filling them in

Discovering problems in your company isn’t always obvious. Sometimes, you need to find what’s not working well to help your team do better. That’s where critical thinking comes in.

Training and development . HR professionals, for instance, critically analyze skill gaps within the organization to design training programs. Without deep analysis, they can’t address specific needs and upskill their employees .

9. Contributing effectively to team discussions

In a workplace, everyone needs to join meetings by saying what they think and listening to everyone else. Effective participation, in fact, depends on critical thinking because it’s the best shortcut to reach collective decisions.

Team meetings . In a brainstorming session, you and your colleagues are like puzzle pieces, each with a unique idea. To succeed, you listen to each other’s thoughts, mix and match those ideas, and together, you create the perfect picture – the best plan for your project.

10. Contributing effectively to problem-solving

Effective problem-solving typically involves critical thinking, with team members offering valuable insights and solutions based on their analysis of the situation.

Innovative SaaS product development . Let’s say a cross-functional team faces a challenging innovation problem. So, they use critical thinking to brainstorm creative solutions and evaluate the feasibility of each idea. Afterwards, they select the most promising one for further development.

11. Making accurate forecasts

Understanding critical thinking examples is essential in another aspect, too. In fact, critical thinking allows companies to prepare for what’s coming, reducing unexpected problems.

Financial forecasting . For example, finance professionals critically assess financial data, economic indicators, and market trends to make accurate forecasts. This data helps to make financial decisions, such as budget planning or investment strategies.

12. Assessing potential risks and recommending adjustments

Without effective risk management , you’ll constantly face issues when it’s too late to tackle them. But when your team has smart thinkers who can spot problems and figure out how they might affect you, you’ll have no need to worry.

Compliance review . Compliance officers review company policies and practices to ensure they align with relevant laws and regulations. They want to make sure everything we do follows the law. If they find anything that could get us into trouble, they’ll suggest changes to keep us on the right side of the law.

13. Managing the crisis

Who else wants to minimize damage and protect their business? During a crisis, leaders need to think critically to assess the situation, make rapid decisions, and allocate resources effectively.

Security breach in a big IT company . Suppose you’ve just discovered a major security breach. This is a crisis because sensitive customer data might be at risk, and it could damage your company’s reputation.

To manage this crisis, you need to think critically. First, you must assess the situation. You investigate how the breach happened, what data might be compromised, and how it could affect your customers and your business. Next, you have to make decisions. You might decide to shut down the affected systems to prevent further damage. By taking quick, well-planned actions, you can minimize the damage and protect your business.

Encouraging Critical Thinking in Your Team: A Brief Manager’s Guide

According to Payscale’s survey, 60% of managers believe that critical thinking is the top soft skill that new graduates lack. Why should you care? Well, among these graduates, there’s a good chance that one could eventually become a part of your team down the road.

So, how do you create a workplace where critical thinking is encouraged and cultivated? Let’s find out.

Step 1: Make Your Expectations Clear

First things first, make sure your employees know why critical thinking is important. If they don’t know how critical it is, it’s time to tell them. Explain why it’s essential for their growth and the company’s success.

Step 2: Encourage Curiosity

Do your employees ask questions freely? Encourage them to! A workplace where questions are welcomed is a breeding ground for critical thinking. And remember, don’t shut down questions with a “That’s not important.” Every question counts.

Step 3: Keep Learning Alive

Encourage your team to keep growing. Learning new stuff helps them become better thinkers. So, don’t let them settle for “I already know enough.” Provide your team with inspiring examples of critical thinking in the workplace. Let them get inspired and reach new heights.

Step 4: Challenge, Don’t Spoon-Feed

Rethink your management methods, if you hand your employees everything on a silver platter. Instead, challenge them with tasks that make them think. It might be tough, but don’t worry. A little struggle can be a good thing.

Step 5: Embrace Different Ideas

Do you only like ideas that match your own? Well, that’s a no-no. Encourage different ideas, even if they sound strange. Sometimes, the craziest ideas lead to the best solutions.

Step 6: Learn from Mistakes

Mistakes happen. So, instead of pointing fingers, ask your employees what they learned from the mistake. Don’t let them just say, “It’s not my fault.”

Step 7: Lead the Way

Are you a critical thinker yourself? Show your employees how it’s done. Lead by example. Don’t just say, “Do as I say!”

Wrapping It Up!

As we’ve seen, examples of critical thinking in the workplace are numerous. Critical thinking shows itself in various scenarios, from evaluating pros and cons to breaking down complex problems and recognizing biases.

The good news is that critical thinking isn’t something you’re born with but a skill you can nurture and strengthen. It’s a journey of growth, and managers are key players in this adventure. They can create a space where critical thinking thrives by encouraging continuous learning.

Remember, teams that cultivate critical thinking will be pioneers of adaptation and innovation. They’ll be well-prepared to meet the challenges of tomorrow’s workplace with confidence and competence.

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How to Improve Your Critical Thinking Skills as a VP of Finance

Master critical thinking as a finance VP. Strengthen decision making, risk management & strategy formulation with these expert tips.

As the VP of Finance for your organization, you have a crucial role to play in driving growth and ensuring financial stability. To achieve these goals, it is essential to possess strong critical thinking skills that can help you make sound financial decisions and navigate complex financial landscapes. In this article, we will explore how you can improve your critical thinking skills and become a more effective leader in the world of finance.

Understanding the Importance of Critical Thinking in Finance

Critical thinking is an essential skill for anyone working in finance. It involves the ability to analyze information objectively, evaluate different perspectives, and make informed decisions. As a VP of Finance, you are responsible for monitoring financial performance, identifying risks, and ensuring that financial goals are met. To achieve these objectives, you need to be able to think critically about financial information and make sound financial decisions.

The role of critical thinking in financial decision-making

When it comes to financial decision-making, critical thinking can make all the difference. It helps you evaluate different options and assess their potential impacts on your organization. By considering various scenarios and weighing the pros and cons of different decisions, you can make informed choices that promote financial success.

For example, let's say you're considering investing in a new product line. Critical thinking would require you to analyze the potential market demand for the product, the costs associated with production and marketing, and the potential revenue it could generate. By weighing these factors, you can make an informed decision about whether or not to invest in the product line.

How critical thinking skills can enhance your financial strategies

Critical thinking skills can also help you develop more effective financial strategies. By analyzing financial data, identifying trends, and anticipating potential risks, you can develop strategies that take advantage of financial opportunities while mitigating potential risks. This can help your organization achieve long-term financial stability and growth.

For instance, let's say you're developing a budget for the upcoming fiscal year. Critical thinking skills would require you to analyze past financial data, identify potential areas of cost savings, and anticipate any potential financial risks. By doing so, you can develop a budget that is realistic, achievable, and aligned with your organization's financial goals.

In conclusion, critical thinking is a crucial skill for anyone working in finance. By developing your critical thinking skills, you can make informed financial decisions, evaluate different options, and develop effective financial strategies that promote long-term financial success.

Assessing Your Current Critical Thinking Abilities

Before you can improve your critical thinking skills, it's important to assess where you stand. By identifying your strengths and weaknesses, you can develop a roadmap for improvement that is tailored to your individual needs.

One way to assess your critical thinking abilities is to evaluate your problem-solving skills. Are you able to identify the root cause of a problem and develop effective solutions? Do you consider all possible options before making a decision?

Another important aspect of critical thinking is the ability to analyze information and make informed judgments. Are you able to identify relevant information and separate it from irrelevant data? Do you consider the reliability and credibility of your sources?

Identifying your strengths and weaknesses

Start by taking a close look at your critical thinking abilities. Identify areas where you excel, such as analyzing financial data or assessing risks. On the other hand, identify areas where you may need improvement, such as evaluating different perspectives or identifying biases.

It's important to remember that everyone has strengths and weaknesses when it comes to critical thinking. By identifying your areas of weakness, you can focus on improving those skills and becoming a more well-rounded critical thinker.

Seeking feedback from colleagues and mentors

It's also important to seek feedback from colleagues and mentors. By getting an outside perspective, you can gain valuable insights into your strengths and weaknesses and identify areas for improvement. Be open to constructive criticism and use it as an opportunity to grow and develop as a leader.

Additionally, seeking feedback from a diverse group of individuals can help you identify blind spots and biases that you may not have been aware of. This can help you become a more objective and effective critical thinker.

Remember, critical thinking is a skill that can be developed and improved over time. By assessing your current abilities, identifying areas for improvement, and seeking feedback from others, you can become a more effective and successful leader.

Developing a Growth Mindset for Continuous Improvement

Improving your critical thinking skills requires a growth mindset, where you are open to learning, growth, and development. Embrace challenges and view them as opportunities to learn and develop your skills.

One way to embrace challenges is to set goals for yourself. Whether it's a personal or professional goal, having a clear objective in mind can help motivate you to push yourself beyond your comfort zone. Additionally, breaking down your goals into smaller, achievable steps can make them feel less daunting and more manageable.

Embracing challenges and learning from failures

Don't be afraid to take on new challenges and stretch yourself beyond your comfort zone. By embracing challenges, you can gain new knowledge and experience and develop new critical thinking skills. However, it's important to also recognize that failure is a natural part of the learning process. When you encounter setbacks or challenges, take the time to reflect on what went wrong and what you can do differently in the future.

It's also important to seek out feedback from others, whether it's from a mentor, colleague, or friend. Feedback can help you identify blind spots in your thinking and provide valuable insights for improvement.

Cultivating curiosity and a desire for knowledge

Cultivating curiosity and a desire for knowledge is another essential aspect of developing strong critical thinking skills. Stay up to date with the latest financial trends, learn new financial analysis techniques, and seek out new opportunities for growth and development.

One way to cultivate curiosity is to read widely and diversely. Don't limit yourself to just one subject or genre - explore a variety of topics and perspectives. You can also attend conferences, webinars, or workshops to learn from experts in your field.

Finally, don't be afraid to ask questions. Curiosity often starts with a simple question, and asking questions can help you gain a deeper understanding of a topic or issue.

Enhancing Your Analytical and Problem-Solving Skills

Strong analytical and problem-solving skills are essential for effective critical thinking in finance. By enhancing these skills, you can make sound financial decisions and drive growth and success for your organization.

One way to enhance your analytical and problem-solving skills is to practice breaking down complex financial problems. When faced with a complex financial problem, it can be overwhelming to try to solve it all at once. By breaking it down into smaller, more manageable components, you can analyze each component individually and consider its potential impact on the larger problem. This approach allows you to develop a more comprehensive understanding of the issue and identify potential solutions.

Another effective tool for enhancing your analytical and problem-solving skills is to utilize financial models and simulations. These tools can help you gain insights into potential financial outcomes, identify potential risks, and evaluate different financial strategies. By using financial models and simulations, you can test different scenarios and make more informed decisions about the best course of action.

In addition to financial models and simulations, leveraging data-driven insights can also be a powerful tool for enhancing your analytical and problem-solving skills. By analyzing financial data, identifying trends, and anticipating potential risks, you can develop sound financial strategies that promote financial success for your organization. Data-driven insights can help you make more informed decisions and avoid potential pitfalls.

Breaking down complex financial problems

Breaking down complex financial problems can be a daunting task, but it is an essential skill for effective critical thinking in finance. When faced with a complex financial problem, it can be helpful to start by identifying the key components of the problem. This might involve analyzing financial statements, reviewing contracts, or conducting research on industry trends.

Once you have identified the key components of the problem, you can begin to analyze each component individually. This might involve calculating financial ratios, conducting a SWOT analysis, or evaluating the potential impact of different scenarios. By breaking down the problem into smaller components, you can develop a more comprehensive understanding of the issue and identify potential solutions.

Utilizing financial models and simulations

Financial models and simulations are powerful tools for enhancing your analytical and problem-solving skills. These tools allow you to test different scenarios and evaluate the potential outcomes of different financial strategies. By using financial models and simulations, you can gain insights into potential risks and identify opportunities for growth.

There are many different types of financial models and simulations, including cash flow models, Monte Carlo simulations, and decision trees. Each of these tools has its own strengths and weaknesses, and it is important to choose the right tool for the job. By using financial models and simulations effectively, you can make more informed decisions and drive growth and success for your organization.

Leveraging data-driven insights

Data-driven insights are an increasingly important tool for enhancing your analytical and problem-solving skills. By analyzing financial data, identifying trends, and anticipating potential risks, you can develop sound financial strategies that promote financial success for your organization.

There are many different sources of financial data, including financial statements, market research reports, and industry benchmarks. By analyzing this data, you can identify patterns and trends that can help you make more informed decisions. For example, you might identify a trend of declining sales in a particular product line, which could prompt you to develop a new marketing strategy or explore new product offerings.

In addition to analyzing financial data, it is important to anticipate potential risks and challenges. This might involve conducting a SWOT analysis, evaluating the competitive landscape, or assessing the impact of regulatory changes. By anticipating potential risks, you can develop contingency plans and make more informed decisions.

Building Strong Communication and Collaboration Skills

Effective communication and collaboration are key components of success in the modern business world. In order to achieve financial success, it is important for individuals and teams to build and cultivate these skills. By doing so, you can more effectively share financial insights, coordinate financial activities, and drive growth and success for your organization.

Effectively presenting financial data and insights

One of the most important aspects of effective communication is presenting financial data and insights in a way that is clear, concise, and easy to understand. Utilizing visual aids, such as graphs and charts, can be a great way to make financial information more accessible and engaging. It is also important to tailor your communication style to your audience, whether it's senior leaders or front-line employees. By doing so, you can ensure that your message is received and understood by all.

Another important aspect of effective communication is being able to explain financial data and insights in a way that is relevant to your audience. For example, if you are presenting financial data to a marketing team, you may want to focus on metrics that are relevant to their work, such as customer acquisition costs or return on investment for advertising campaigns.

Encouraging open dialogue and diverse perspectives

Collaboration is all about encouraging open dialogue and diverse perspectives. By creating an environment where individuals feel comfortable sharing their thoughts and ideas, you can foster a culture of collaboration and innovation. It is important to be open to feedback from your colleagues and to encourage them to share their thoughts and ideas. Engaging in active listening is also key to understanding and appreciating different perspectives.

Another way to encourage collaboration is to create cross-functional teams that bring together individuals with different backgrounds and areas of expertise. By doing so, you can leverage the strengths and knowledge of each team member to drive success for your organization.

Fostering a culture of critical thinking within your team

Finally, fostering a culture of critical thinking within your team is essential for achieving financial success. Encouraging your team members to develop their critical thinking skills can help them make better decisions and solve problems more effectively. Providing opportunities for growth and development, such as training programs or mentorship, can also help your team members build their skills and increase their value to the organization.

Recognizing and celebrating the achievements of your team members is also important for fostering a culture of critical thinking. By acknowledging and rewarding individuals who demonstrate exceptional critical thinking skills, you can encourage others to follow their lead.

In conclusion, building strong communication and collaboration skills is essential for achieving financial success in the modern business world. By effectively presenting financial data and insights, encouraging open dialogue and diverse perspectives, and fostering a culture of critical thinking within your team, you can help your organization drive growth and success.

Improving your critical thinking skills as a VP of Finance is essential for driving financial success and growth for your organization. By understanding the importance of critical thinking in finance, assessing your current critical thinking abilities, developing a growth mindset, enhancing your analytical and problem-solving skills, and building strong communication and collaboration skills, you can become a more effective leader in the world of finance.

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• Q1: Why are critical thinking skills important for a VP of Finance? A1: Critical thinking skills are essential for a VP of Finance as they help in analyzing information objectively, evaluating different perspectives, and making informed decisions to ensure financial stability and drive growth.
• Q2: What is the role of critical thinking in financial decision-making? A2: Critical thinking helps in evaluating different options and assessing their potential impacts on an organization. It helps to make informed choices and promote financial success.
• Q3: How can critical thinking skills enhance financial strategies? A3: Critical thinking helps in analyzing financial data, identifying trends, and anticipating potential risks, which help in developing effective financial strategies that promote long-term financial stability and growth.
• Q4: How can one assess their current critical thinking abilities? A4: One can assess their critical thinking abilities by evaluating their problem-solving skills, analyzing information, and seeking feedback from colleagues and mentors.
• Q5: How can one improve their communication and collaboration skills? A5: One can improve their communication and collaboration skills by presenting financial data and insights effectively, encouraging open dialogue and diverse perspectives, and fostering a culture of critical thinking within their team. It also involves creating an environment where individuals feel comfortable sharing their thoughts and ideas.

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Why Critical Thinking Matters in Your Business

Critical thinking should become a second-nature skill for leaders and employees across your organization.

Table of Contents

Using critical thinking skills in business can guide your organization toward success. To make the most beneficial decisions for your business, it’s crucial to develop and teach critical thinking skills to those involved in the day-to-day of your brand. Here’s how critical thinking skills matter in business — and how to teach them to employees to improve decision-making and problem-solving. 

What is critical thinking?

Jen Lawrence, co-author of Engage the Fox: A Business Fable About Thinking Critically and Motivating Your Team, defines critical thinking as “the ability to solve problems effectively by systematically gathering information about an issue, generating further ideas involving a variety of perspectives, evaluating the information using logic, and making sure everyone involved is on board.”

This is a complex definition for a challenging concept. Though critical thinking might seem as straightforward as stepping back and using a formal thinking process instead of reacting instinctively to conflicts or problems, it is actually a much more challenging task.

Critical thinking’s ultimate goal is ensuring you have the best answer to a problem with maximum buy-in from all parties involved – an outcome that will ultimately save your business time, money and stress.

Why is critical thinking essential in business?

A World Economic Forum report revealed that critical thinking is one of the most in-demand career skills employers seek when trying to attract and retain the best employees – and employers believe critical thinking skills will become even more necessary in the coming years. 

Critical thinking in business guarantees objective and efficient problem-solving, ultimately reducing costly errors and ensuring that your organization’s resources are used wisely. Team members employing critical thinking can connect ideas, spot errors and inconsistencies, and make the best decisions most often. 

Employees with critical thinking are also more likely to accomplish the following:

• Analyzing information
• Thinking outside the box
• Coming up with creative solutions to sudden problems
• Devising thought-through, systematic plans
• Requiring less supervision

What are critical thinking skills?

Critical thinking is a soft skill that comprises multiple interpersonal and analytical abilities and attributes. Here are some essential critical thinking skills that can support workforce success.

• Observation : Employees with critical thinking can easily sense and identify an existing problem – and even predict potential issues – based on their experience and sharp perception. They’re willing to embrace multiple points of view and look at the big picture. 
• Analytical thinking : Analytical thinkers collect data from multiple sources, reject bias, and ask thoughtful questions. When approaching a problem, they gather and double-check facts, assess independent research, and sift through information to determine what’s accurate and what can help resolve the problem. 
• Open-mindedness : Employees who demonstrate critical thinking are open-minded – not afraid to consider opinions and information that differ from their beliefs and assumptions. They listen to colleagues; they can let go of personal biases and recognize that a problem’s solution can come from unexpected sources. 
• Problem-solving attitude : Critical thinkers possess a positive attitude toward problem-solving and look for optimal solutions to issues they’ve identified and analyzed. They are usually proactive and willing to offer suggestions based on all the information they receive. [Related article: How to Develop a Positive Attitude in the Workplace ]
• Communication : When managers make a decision, they must share it with the rest of the team and other stakeholders. Critical thinkers demonstrate excellent communication skills and can provide supporting arguments and evidence that substantiate the decision to ensure the entire team is on the same page. 

What are the benefits of critical thinking in business?

Many businesses operate at a frantic tempo that reinforces hasty thinking and rushed business decisions, resulting in costly mistakes and blunders. When employees are trained in critical thinking, they learn to slow the pace and gather crucial information before making decisions that might impact the organization. 

Along with reducing costly errors, critical thinking in business brings the following benefits: 

• Critical thinking improves communication . When employees think more clearly and aren’t swayed by emotion, they communicate better. “If you can think more clearly and better articulate your positions, you can better engage in discussions and make a much more meaningful contribution in your job,” said David Welton, managing partner at Grove Critical Thinking.
• Critical thinking boosts emotional intelligence . It might seem counterintuitive to associate analytical rationality with emotional intelligence . However, team members who possess critical thinking skills are less prone to rash, emotion-driven decisions. Instead, they take time to analyze the situation and make the most informed decision while being mindful and respectful of the emotional and ethical implications. 
• Critical thinking encourages creativity . Critical thinkers are open to new ideas and perspectives and accumulate a significant amount of information when facing decisions. Because of this, they’re more likely to come up with creative solutions . They are also curious and don’t shy away from asking open-ended questions. 
• Critical thinking saves time and money . By encouraging critical thinking in the workplace, you minimize the need for supervision, catch potential problems early, promote independence and initiative, and free managers to focus on other duties. All this helps your company save valuable time and resources. 

How do you teach critical thinking in business?

Experts agree that critical thinking is a teachable skill. Both Lawrence and Welton recommend exploring critical thinking training programs and methods to improve your workplace’s critical thinking proficiency. Here’s a breakdown of how to teach critical thinking in the workplace: 

• Identify problem areas . Executives and managers should assess workplace areas most lacking in critical thinking. If mistakes are consistently made, determine whether the issue is a lack of critical thinking or an inherent issue with a team or process. After identifying areas that lack critical thinking, research the type of training best suited to your organization. 
• Start small . Employees newly embracing critical thinking might have trouble tackling large issues immediately. Instead, present them with smaller challenges. “Start practicing critical thinking as a skill with smaller problems as examples, and then work your way up to larger problems,” Lawrence said.
• Act preemptively . Teaching and implementing critical thinking training and methodology takes time and patience. Lawrence emphasized that critical thinking skills are best acquired during a time of calm. It might feel urgent to seek critical thinking during a crisis, but critical thinking is a challenging skill to learn amid panic and stress. Critical thinking training is best done preemptively so that when a crisis hits, employees will be prepared and critical thinking will come naturally.
• Allow sufficient time . From a managerial perspective, giving employees extra time on projects or problems might feel stressful in the middle of deadlines and executive pressures. But if you want those working for you to engage in critical thinking processes, it’s imperative to give them ample time. Allowing employees sufficient time to work through their critical thinking process can save the company time and money in the long run.

How do you identify successful critical thinking?

Successful critical thinking happens during a crisis, not after.

Lawrence provided an example involving restaurants and waitstaff: If a customer has a bad experience at a restaurant, a server using critical thinking skills will be more likely to figure out a solution to save the interaction, such as offering a free appetizer or discount. “This can save the hard-earned customer relationship you spent a lot of marketing dollars to create,” Lawrence said. This concept is applicable across many business and organizational structures. 

You should also be aware of signs of a lack of critical thinking. Lawrence pointed out that companies that change strategy rapidly, moving from one thing to the next, are likely not engaging in critical thinking. This is also the case at companies that seem to have good ideas but have trouble executing them.

As with many issues in business, company leadership determines how the rest of the organization acts. If leaders have excellent ideas but don’t follow critical thinking processes, their team will not buy into those ideas, and the company will suffer. This is why critical thinking skills often accompany positive communication skills.

“Critical thinking doesn’t just help you arrive at the best answer, but at a solution most people embrace,” Lawrence said. Modeling critical thinking at the top will help the skill trickle down to the rest of the organization, no matter your company’s type or size.

Critical thinking is the key to your business success

When critical thinking is actively implemented in an organization, mistakes are minimized, and operations run more seamlessly. With training, time and patience, critical thinking can become a second-nature skill for employees at all levels of experience and seniority. The money, time and conflict you’ll save in the long run are worth the extra effort of implementing critical thinking in your workplace.

Sammi Caramela and Rebecka Green contributed to this article. Source interviews were conducted for a previous version of this article.

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Financial knowledge and decision-making skills

Financial knowledge and decision-making skills help people make informed financial decisions through problem-solving, critical thinking, and an understanding of key financial facts and concepts.

Building financial knowledge and decision-making skills

How do we learn to make good financial choices? Learn more about the financial knowledge and decision-making skills building block and how it can help young people make the right decisions for their situation.

Importance of financial knowledge and decision-making skills

Strong financial knowledge and decision-making skills help people weigh options and make informed choices for their financial situations, such as deciding how and when to save and spend, comparing costs before a big purchase, and planning for retirement or other long-term savings.

Development of this building block

Financial knowledge and decision-making skills typically don’t develop until adolescence and young adulthood. During these years, they become more relevant, especially for youth who start to earn money, buy things on their own, manage a bank account, or borrow for education.

The tables that follow show what this building block looks like at three stages of development and how the skills and abilities relate to adult behavior associated with financial well-being.

Early childhood (ages 3–5)

Middle childhood (ages 6–12)

Adolescence and early adulthood (ages 13–21)

Teaching this building block

Schools can provide opportunities for youth to practice financial behaviors, make financial decisions, and reflect on the outcomes and consequences of those decisions. Across the curriculum, teachers can provide opportunities for students to learn how to find and recognize reliable financial information, compare financial products, and do purposeful financial research in order to analyze options and make decisions.

Instructional strategies

Research shows that the following strategies can be effective to help people develop financial knowledge and decision-making skills.

• Competency-based learning: Student-centered learning that encourages students to progress toward well-defined benchmarks to give them a sense of mastery and ownership over the skills and knowledge they are learning
• Direct instruction: A structured, straightforward, teacher-directed approach that focuses on an explicit skill and typically includes a lecture, demonstration, or discussion
• Personalized instruction: Teacher assesses each student’s needs, then tailors instruction to the individual student, including focusing and differentiating resources, strategies, supports, and pacing on that student’s needs to individualize learning
• Project-based learning: A hands-on strategy in which students actively explore real-world challenges, answer meaningful questions, and accomplish relevant tasks and, in doing so, are encouraged to make their own decisions, perform their own research, overcome obstacles, and present their work to others
• Simulation: Hands-on learning activities that use real-world scenarios to promote critical thinking and application of learning

Learning activities

Learning activities that nurture financial knowledge and decision making should support young people’s acquisition of factual knowledge, research and analysis skills, and deliberate financial decision-making. The types of activities that support these skills include the following.

• Financial coaching and mentoring: Adults engage and encourage students (individually and in small groups) to develop financial capability and work toward financial goals
• Financial simulations: Educational tools or activities that replicate real-world financial management situations and allow students to develop skills such as budgeting, comparison shopping, and investing by making mock decisions that result in realistic consequences
• Real-world case studies: Stories that present realistic situations involving a dilemma, conflict, or problem to be negotiated or resolved by analyzing and evaluating a range of information and weighing the consequences of different decisions

Resources for teaching financial knowledge and decision-making skills

• Search for classroom activities to nurture the development of financial knowledge and decision-making skills
• Explore all strategies and learning activities for nurturing the building blocks

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Everything You Need to Know About Critical Thinking Skills for Business Leaders

9 Min Read | Oct 3, 2023

We all have moments of bad decision-making. (Like that time you hired your best friend’s cousin’s neighbor without interviewing them. Wrong move.) But consistently making decisions by the seat of your pants is no way to live your life—or build your business. What you can build your company on is the momentum that comes from critical thinking, aka making smart decisions and solving tough problems like it’s your job. Because if you’re a leader, it is.

Now, don’t get tripped up on the word critical . We’re not talking about overthinking every little thing and never really deciding on anything. And we’re also not talking about being critical or judgmental of your team. Both suck the life out teams and businesses. Critical thinking is really just about asking great questions, analyzing possible solutions, and taking action.

Let’s explore what critical thinking is, why it matters to you as a business leader, and how to apply how to apply critical-thinking skills examples to your work.           

What Is Critical Thinking?

One scholarly explanation of critical thinking goes something like: a system of thought incorporated in scientific, mathematical, historical, anthropological, moral, philosophical and economic thinking. Yeah, that definition’s a 0 out of 10 on the helpfulness scale. Critical thinking is more than knowing about something. It’s actively exploring facts and making discoveries. It’s getting to the bottom of problems by asking smart questions so you can make a good judgment based on facts—not feelings.

You already use critical thinking in your everyday decisions without realizing it. As a leader, you probably have 50 “great” ideas before you get to work in the morning. But do you act on all of them? Of course not. Because after you take a closer look at your priorities and available time and resources, you realize some of those ideas aren’t worth pursuing, at least right now. That’s critical thought.

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When you use critical thinking, you don’t just take things at face value or go with your initial gut reaction. You weigh, measure and challenge information carefully, with the goal to improve what and how you think. One quick note though. Don’t mistake critical thinking for memorizing facts and figures. That’s what you do when you’re prepping for your fifth-grade multiplication test. It’s not how you make new discoveries.

If you want to solve problems and find better ways of doing things like the great leader you’re meant to be , you will rely on a combination of data, facts, research, wise counsel, and assumptions from your knowledge and experience.

Pro tip: Being wishy washy can paralyze your team, your business and your mission. That’s what’s called indecisive leadership, and that’s an oxymoron. Don’t do that. Once you think through your information and options, make up your mind.

Why Is Critical Thinking Important to Leaders?

As if paralyzing your team isn’t bad enough, indecision also costs your business time and money. You give life permission to make decisions for you when you don’t move. Yuk! But when you think and move your way through obstacles, you hold the reins and can overcome challenges when others just give up.

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Are you losing steam with your current ad strategy? Critical thinking can lead you to new advertising ideas and marketing streams—and create even more business traffic. Stressed out by supply chain issues? Critical thinking can help you find new vendors and ways of doing business. When you think boldly and keep control of the situation, you impose your will (and good sense) on the world around you.

Here’s one more example of why critical thinking is important: Say you notice a dip in sales one month. You could blow it off as a fluke and charge ahead blindly. Or you could panic, treat it as the beginning of the end, and pressure your sales team to turn the ship before you’re forced to close your doors. Which one is right? Probably neither. But you won’t know how to respond until you carefully look at your business trends, analyze market conditions, and talk with some other smart, experienced leaders.

Your team and your business are just as good as your reasoning and decision-making skills.

Critical thinking helps you:

• Keep emotions and chaos in check as you approach problems with facts, not feelings
• Understand the importance and relevance of ideas
• Know when to challenge information and when to stop overthinking
• See how ideas are linked and call out inconsistencies and mistakes
• Appreciate different perspectives
• Consider others’ needs and show respect

Ask yourself how much you prioritize running your business with clarity, fairness, accuracy, and relevance. Your answer will give you a good picture of how much you value critical thinking.

Related article: What is Transformational Leadership?

Critical thinking has plenty of enemies though. Beware of these traits and behaviors that can lead to bad thinking and bad business:

• Self-interest
• Blind acceptance of what’s “normal”

Have you ever heard the phrase, “ready, fire, aim”? Probably not—but that’s what it looks like to act before you get a clear picture of the situation. Things run smoother the less you shoot from the hip and the more you carefully consider your decisions.

Examples of Critical Thinking Skills in Business

Here are some examples leaders in different lines of work who use critical thinking to solve everyday business problems:

• A funeral home director who considers a grieving family’s budget and wishes and guides them to the best choices
• A home health care manager who analyzes their cases and matches team members with clients based on their needs and schedule preferences
• A home contractor who weighs out which subcontractors are the right fit for the job
• A customer service leader who uses feedback forms to decide on training needs for their team
• A landscaper who evaluates the risk versus the potential revenue growth of adding team members

The Critical Thinking Process

We’ve looked at why and when to put some extra thought into your business decisions, but let’s be real. Not every decision requires deep-level thinking. The amount of time and energy you spend deciding should be based on the size of the decision’s impact on your business.

If it’s your job to choose whether your company’s Christmas card envelope is white or red, for the love of holiday cheer, just decide. But if you’re about to make a major purchase or new hire, you’ve got some big investments on the line. Pause to think over the details before you advance.

Related article : Product Launch: 10 Questions to Ask Before You Launch a New Product

Also, as you prepare to solve a tricky problem, ask yourself these questions:

• What’s the real issue?
• Why does this problem or challenge exist?
• What information do I need to gather to understand more?
• How should I keep my notes organized?

Let’s say, for example, that your business issue is consistently unhappy customers. On the surface, it looks like your team members serve customers too slowly. Since both team members and customers are involved, you need to get perspective from both sides to learn why the problem exists. So, you gather details from them on when and where the issue shows up and how they think it is or isn’t being handled. As for how to keep track of the information you learn, you could simply take notes on your phone or computer to review later. Or, you might need to put them in a shared document so your key leaders can see them as you work on a solution together.

After doing some high-level digging, you may find that your team members really are slow, but why ? That’s the next thing you need to discover. Are they poorly trained? Working in a role they’re not good at? Using faulty equipment?

Following these steps of deeper-level critical thinking will help you uncover root issues—so you can fix any problems:

• Observe: Look at the issue from different angles and ask questions about it.
• Analyze: Test how true your information is.
• Reason: Come up with your top theories for why there’s a problem, then list possible conclusions and solutions. (We’ve already established that you’re an idea machine. That’s great!  Keep those possible solutions flowing.)
• Communicate: Talk with people who are smarter and further ahead in their career than you for deeper insight. That doesn’t mean to just ask anyone with an opinion—find someone with experience.
• Solve: Decide and act.

Now for an important reminder: Thinking critically means you’re always discovering, changing and improving. Afterall, the one thing thriving businesses count on is change . That means you might solve a customer concern one way today but find better ways to solve it in the future. The same is true in any situation where you use critical thinking steps. The more you want to grow, the more you challenge your ideas and ways of doing things to get the positive change!

How to Think More Critically

We get it. You’re reading this because you’re serious about taking new ground and winning in business. You’re serious about going the extra mile to raise your critical thinking game even more. Here are four practical ways to build stronger critical thinking skills:

• Take a course or play video and board games that challenge your brain.
• Volunteer to solve problems at work and home for practice.
• Talk to others who are really good at thinking critically.
• Expand your job knowledge and skills so you can see problems more clearly.

Related article :  Mastermind Groups: What Are They, and How Can They Help You Grow Your Business?

What’s Next: Decision Time

Great leaders are people of action. They’re neither knee-jerk and emotional or passive and indecisive. They get the facts, think them through, then make the call. Of course, your personality style will influence whether you naturally make decisions quickly or need more time—and that’s okay. But, when it’s go time, leaders lead. Those who don’t end up like the squirrel in the middle of the road looking back and forth, then moving in circles or not at all. We all know what happens to that squirrel.

One way to stretch your critical thinking skills is to learn from today’s top voices in business and leadership through The EntreLeadership Podcast . You’ll hear practical decision-making insights that help you lead with confidence, solve big problems and grow your business.

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Ramsey Solutions has been committed to helping people regain control of their money, build wealth, grow their leadership skills, and enhance their lives through personal development since 1992. Millions of people have used our financial advice through 22 books (including 12 national bestsellers) published by Ramsey Press, as well as two syndicated radio shows and 10 podcasts, which have over 17 million weekly listeners. Learn More.

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How to develop critical thinking skills

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What are critical thinking skills?

How to develop critical thinking skills: 12 tips, how to practice critical thinking skills at work, become your own best critic.

A client requests a tight deadline on an intense project. Your childcare provider calls in sick on a day full of meetings. Payment from a contract gig is a month behind. 

Your day-to-day will always have challenges, big and small. And no matter the size and urgency, they all ask you to use critical thinking to analyze the situation and arrive at the right solution. 

Critical thinking includes a wide set of soft skills that encourage continuous learning, resilience , and self-reflection. The more you add to your professional toolbelt, the more equipped you’ll be to tackle whatever challenge presents itself. Here’s how to develop critical thinking, with examples explaining how to use it.

Critical thinking skills are the skills you use to analyze information, imagine scenarios holistically, and create rational solutions. It’s a type of emotional intelligence that stimulates effective problem-solving and decision-making . 

When you fine-tune your critical thinking skills, you seek beyond face-value observations and knee-jerk reactions. Instead, you harvest deeper insights and string together ideas and concepts in logical, sometimes out-of-the-box , ways. 

Imagine a team working on a marketing strategy for a new set of services. That team might use critical thinking to balance goals and key performance indicators , like new customer acquisition costs, average monthly sales, and net profit margins. They understand the connections between overlapping factors to build a strategy that stays within budget and attracts new sales. 

Looking for ways to improve critical thinking skills? Start by brushing up on the following soft skills that fall under this umbrella: 

• Analytical thinking: Approaching problems with an analytical eye includes breaking down complex issues into small chunks and examining their significance. An example could be organizing customer feedback to identify trends and improve your product offerings. 
• Open-mindedness: Push past cognitive biases and be receptive to different points of view and constructive feedback . Managers and team members who keep an open mind position themselves to hear new ideas that foster innovation . 
• Creative thinking: With creative thinking , you can develop several ideas to address a single problem, like brainstorming more efficient workflow best practices to boost productivity and employee morale . 
• Self-reflection: Self-reflection lets you examine your thinking and assumptions to stimulate healthier collaboration and thought processes. Maybe a bad first impression created a negative anchoring bias with a new coworker. Reflecting on your own behavior stirs up empathy and improves the relationship. 
• Evaluation: With evaluation skills, you tackle the pros and cons of a situation based on logic rather than emotion. When prioritizing tasks , you might be tempted to do the fun or easy ones first, but evaluating their urgency and importance can help you make better decisions. 

There’s no magic method to change your thinking processes. Improvement happens with small, intentional changes to your everyday habits until a more critical approach to thinking is automatic. 

Here are 12 tips for building stronger self-awareness and learning how to improve critical thinking: 

1. Be cautious

There’s nothing wrong with a little bit of skepticism. One of the core principles of critical thinking is asking questions and dissecting the available information. You might surprise yourself at what you find when you stop to think before taking action. 

Before making a decision, use evidence, logic, and deductive reasoning to support your own opinions or challenge ideas. It helps you and your team avoid falling prey to bad information or resistance to change .

2. Ask open-ended questions

“Yes” or “no” questions invite agreement rather than reflection. Instead, ask open-ended questions that force you to engage in analysis and rumination. Digging deeper can help you identify potential biases, uncover assumptions, and arrive at new hypotheses and possible solutions. 

3. Do your research

No matter your proficiency, you can always learn more. Turning to different points of view and information is a great way to develop a comprehensive understanding of a topic and make informed decisions. You’ll prioritize reliable information rather than fall into emotional or automatic decision-making. 

4. Consider several opinions

You might spend so much time on your work that it’s easy to get stuck in your own perspective, especially if you work independently on a remote team . Make an effort to reach out to colleagues to hear different ideas and thought patterns. Their input might surprise you.

If or when you disagree, remember that you and your team share a common goal. Divergent opinions are constructive, so shift the focus to finding solutions rather than defending disagreements. 

5. Learn to be quiet

Active listening is the intentional practice of concentrating on a conversation partner instead of your own thoughts. It’s about paying attention to detail and letting people know you value their opinions, which can open your mind to new perspectives and thought processes.

If you’re brainstorming with your team or having a 1:1 with a coworker , listen, ask clarifying questions, and work to understand other peoples’ viewpoints. Listening to your team will help you find fallacies in arguments to improve possible solutions.

6. Schedule reflection

Whether waking up at 5 am or using a procrastination hack, scheduling time to think puts you in a growth mindset . Your mind has natural cognitive biases to help you simplify decision-making, but squashing them is key to thinking critically and finding new solutions besides the ones you might gravitate toward. Creating time and calm space in your day gives you the chance to step back and visualize the biases that impact your decision-making. 

7. Cultivate curiosity

With so many demands and job responsibilities, it’s easy to seek solace in routine. But getting out of your comfort zone helps spark critical thinking and find more solutions than you usually might.

If curiosity doesn’t come naturally to you, cultivate a thirst for knowledge by reskilling and upskilling . Not only will you add a new skill to your resume , but expanding the limits of your professional knowledge might motivate you to ask more questions. 

You don’t have to develop critical thinking skills exclusively in the office. Whether on your break or finding a hobby to do after work, playing strategic games or filling out crosswords can prime your brain for problem-solving. 

9. Write it down

Recording your thoughts with pen and paper can lead to stronger brain activity than typing them out on a keyboard. If you’re stuck and want to think more critically about a problem, writing your ideas can help you process information more deeply.

The act of recording ideas on paper can also improve your memory . Ideas are more likely to linger in the background of your mind, leading to deeper thinking that informs your decision-making process. 

10. Speak up

Take opportunities to share your opinion, even if it intimidates you. Whether at a networking event with new people or a meeting with close colleagues, try to engage with people who challenge or help you develop your ideas. Having conversations that force you to support your position encourages you to refine your argument and think critically. 

11. Stay humble

Ideas and concepts aren’t the same as real-life actions. There may be such a thing as negative outcomes, but there’s no such thing as a bad idea. At the brainstorming stage , don’t be afraid to make mistakes.

Sometimes the best solutions come from off-the-wall, unorthodox decisions. Sit in your creativity , let ideas flow, and don’t be afraid to share them with your colleagues. Putting yourself in a creative mindset helps you see situations from new perspectives and arrive at innovative conclusions. 

12. Embrace discomfort

Get comfortable feeling uncomfortable . It isn’t easy when others challenge your ideas, but sometimes, it’s the only way to see new perspectives and think critically.

By willingly stepping into unfamiliar territory, you foster the resilience and flexibility you need to become a better thinker. You’ll learn how to pick yourself up from failure and approach problems from fresh angles. 

Thinking critically is easier said than done. To help you understand its impact (and how to use it), here are two scenarios that require critical thinking skills and provide teachable moments. 

Scenario #1: Unexpected delays and budget

Imagine your team is working on producing an event. Unexpectedly, a vendor explains they’ll be a week behind on delivering materials. Then another vendor sends a quote that’s more than you can afford. Unless you develop a creative solution, the team will have to push back deadlines and go over budget, potentially costing the client’s trust. 

Here’s how you could approach the situation with creative thinking:

• Analyze the situation holistically: Determine how the delayed materials and over-budget quote will impact the rest of your timeline and financial resources . That way, you can identify whether you need to build an entirely new plan with new vendors, or if it’s worth it to readjust time and resources. 
• Identify your alternative options: With careful assessment, your team decides that another vendor can’t provide the same materials in a quicker time frame. You’ll need to rearrange assignment schedules to complete everything on time. 
• Collaborate and adapt: Your team has an emergency meeting to rearrange your project schedule. You write down each deliverable and determine which ones you can and can’t complete by the deadline. To compensate for lost time, you rearrange your task schedule to complete everything that doesn’t need the delayed materials first, then advance as far as you can on the tasks that do. 
• Check different resources: In the meantime, you scour through your contact sheet to find alternative vendors that fit your budget. Accounting helps by providing old invoices to determine which vendors have quoted less for previous jobs. After pulling all your sources, you find a vendor that fits your budget. 
• Maintain open communication: You create a special Slack channel to keep everyone up to date on changes, challenges, and additional delays. Keeping an open line encourages transparency on the team’s progress and boosts everyone’s confidence. 

Scenario #2: Differing opinions 

A conflict arises between two team members on the best approach for a new strategy for a gaming app. One believes that small tweaks to the current content are necessary to maintain user engagement and stay within budget. The other believes a bold revamp is needed to encourage new followers and stronger sales revenue. 

Here’s how critical thinking could help this conflict:

• Listen actively: Give both team members the opportunity to present their ideas free of interruption. Encourage the entire team to ask open-ended questions to more fully understand and develop each argument. 
• Flex your analytical skills: After learning more about both ideas, everyone should objectively assess the benefits and drawbacks of each approach. Analyze each idea's risk, merits, and feasibility based on available data and the app’s goals and objectives. 
• Identify common ground: The team discusses similarities between each approach and brainstorms ways to integrate both idea s, like making small but eye-catching modifications to existing content or using the same visual design in new media formats. 
• Test new strategy: To test out the potential of a bolder strategy, the team decides to A/B test both approaches. You create a set of criteria to evenly distribute users by different demographics to analyze engagement, revenue, and customer turnover. 
• Monitor and adapt: After implementing the A/B test, the team closely monitors the results of each strategy. You regroup and optimize the changes that provide stronger results after the testing. That way, all team members understand why you’re making the changes you decide to make.

You can’t think your problems away. But you can equip yourself with skills that help you move through your biggest challenges and find innovative solutions. Learning how to develop critical thinking is the start of honing an adaptable growth mindset. 

Now that you have resources to increase critical thinking skills in your professional development, you can identify whether you embrace change or routine, are open or resistant to feedback, or turn to research or emotion will build self-awareness. From there, tweak and incorporate techniques to be a critical thinker when life presents you with a problem.

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Elizabeth Perry is a Coach Community Manager at BetterUp. She uses strategic engagement strategies to cultivate a learning community across a global network of Coaches through in-person and virtual experiences, technology-enabled platforms, and strategic coaching industry partnerships. With over 3 years of coaching experience and a certification in transformative leadership and life coaching from Sofia University, Elizabeth leverages transpersonal psychology expertise to help coaches and clients gain awareness of their behavioral and thought patterns, discover their purpose and passions, and elevate their potential. She is a lifelong student of psychology, personal growth, and human potential as well as an ICF-certified ACC transpersonal life and leadership Coach.

How divergent thinking can drive your creativity

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Critical thinking: what is it and how can you develop this skill.

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Founder and Head of the international IT recruitment company Lucky Hunter .

I have already raised the issue of the importance of developing emotional intelligence in previous pieces, and today I would like to talk about why critical thinking also matters for employees—especially top managers of companies.

First of all, let's define what critical thinking is. In general, it is the ability to objectively analyze events, incoming information and arguments; approach an issue from different sides; and form conclusions based on the analysis. Developing critical thinking is relevant not only for work but also for life—today we're inundated with huge amounts of information every day, and in order to be able to analyze this information and determine our position based on balanced facts, it is important to look at situations critically.

Critical thinking allows you to always soberly assess the situations taking place in your work, give an objective assessment, including your own actions and the actions of others, effectively negotiate and find the best way out of ambiguous situations. That is why large companies, when hiring employees, pay close attention to the soft skills of a candidate, especially if they are applying for top positions.

So, how can you develop critical thinking?

Practice analyzing.

Turn the events happening around you into facts. Learn to separate them from emotions. Emotions often prevent us from thinking critically, because they reduce everything to the emotional component, which cannot be relied on. Study different points of view on a specific topic. Read more, broaden your horizons and work with information—the more you “dissect” any information material, the more chances you have to get to the bottom of it.

Pay attention to self-criticism.

There should always be a certain amount of healthy self-criticism in your actions and behavior. The keyword here is healthy because it is important to maintain balance and not slip into self-flagellation. Learn to adequately evaluate yourself and your actions, and determine your strengths and growth areas. I work in recruiting, so I will give an example from my practice: In the work of a recruiter, self-criticism is vital for an objective assessment of a candidate, because, in order to evaluate others, you must first be able to objectively evaluate yourself.

Build productive communication.

If you conduct a dialogue calmly and kindly, without insults and rudeness, truly listening and hearing the interlocutor, you thereby increase the chances of getting some useful insight into the process of interaction. It can give you the opportunity to look at the situation from a new angle and come to a conclusion that you would not have come to otherwise. Therefore, the ability to conduct effective, productive communication also affects the development of critical thinking.

Develop your forecasting skills.

This point is quite closely related to the first one. Analyze information and build forecasts based on the analysis, think over the likely development of events and try to answer for yourself why it will be exactly like this. Such forecasting, again, allows you to study a specific situation from different sides, get certain insights into the process and come to an objective conclusion.

Today, it's crucial for employees and managers to develop the skill of thinking critically—all you need to do is start. The result could have a positive impact on all fields of your life, both personal and professional, because a high level of critical thinking has a good effect on communication (including business). It allows you to form objective conclusions and cut off the excess of information garbage, focusing on facts and analyzing them.

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Critical Thinking Is About Asking Better Questions

• John Coleman

Six practices to sharpen your inquiry.

Critical thinking is the ability to analyze and effectively break down an issue in order to make a decision or find a solution. At the heart of critical thinking is the ability to formulate deep, different, and effective questions. For effective questioning, start by holding your hypotheses loosely. Be willing to fundamentally reconsider your initial conclusions — and do so without defensiveness. Second, listen more than you talk through active listening. Third, leave your queries open-ended, and avoid yes-or-no questions. Fourth, consider the counterintuitive to avoid falling into groupthink. Fifth, take the time to stew in a problem, rather than making decisions unnecessarily quickly. Last, ask thoughtful, even difficult, follow-ups.

Are you tackling a new and difficult problem at work? Recently promoted and trying to both understand your new role and bring a fresh perspective? Or are you new to the workforce and seeking ways to meaningfully contribute alongside your more experienced colleagues? If so, critical thinking — the ability to analyze and effectively break down an issue in order to make a decision or find a solution — will be core to your success. And at the heart of critical thinking is the ability to formulate deep, different, and effective questions.

• JC John Coleman is the author of the HBR Guide to Crafting Your Purpose . Subscribe to his free newsletter, On Purpose , or contact him at johnwilliamcoleman.com . johnwcoleman

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41+ Critical Thinking Examples (Definition + Practices)

Critical thinking is an essential skill in our information-overloaded world, where figuring out what is fact and fiction has become increasingly challenging.

But why is critical thinking essential? Put, critical thinking empowers us to make better decisions, challenge and validate our beliefs and assumptions, and understand and interact with the world more effectively and meaningfully.

Critical thinking is like using your brain's "superpowers" to make smart choices. Whether it's picking the right insurance, deciding what to do in a job, or discussing topics in school, thinking deeply helps a lot. In the next parts, we'll share real-life examples of when this superpower comes in handy and give you some fun exercises to practice it.

Critical Thinking Process Outline

Critical thinking means thinking clearly and fairly without letting personal feelings get in the way. It's like being a detective, trying to solve a mystery by using clues and thinking hard about them.

It isn't always easy to think critically, as it can take a pretty smart person to see some of the questions that aren't being answered in a certain situation. But, we can train our brains to think more like puzzle solvers, which can help develop our critical thinking skills.

Here's what it looks like step by step:

Spotting the Problem: It's like discovering a puzzle to solve. You see that there's something you need to figure out or decide.

Collecting Clues: Now, you need to gather information. Maybe you read about it, watch a video, talk to people, or do some research. It's like getting all the pieces to solve your puzzle.

Breaking It Down: This is where you look at all your clues and try to see how they fit together. You're asking questions like: Why did this happen? What could happen next?

Checking Your Clues: You want to make sure your information is good. This means seeing if what you found out is true and if you can trust where it came from.

Making a Guess: After looking at all your clues, you think about what they mean and come up with an answer. This answer is like your best guess based on what you know.

Explaining Your Thoughts: Now, you tell others how you solved the puzzle. You explain how you thought about it and how you answered. 

Checking Your Work: This is like looking back and seeing if you missed anything. Did you make any mistakes? Did you let any personal feelings get in the way? This step helps make sure your thinking is clear and fair.

And remember, you might sometimes need to go back and redo some steps if you discover something new. If you realize you missed an important clue, you might have to go back and collect more information.

Critical Thinking Methods

Just like doing push-ups or running helps our bodies get stronger, there are special exercises that help our brains think better. These brain workouts push us to think harder, look at things closely, and ask many questions.

It's not always about finding the "right" answer. Instead, it's about the journey of thinking and asking "why" or "how." Doing these exercises often helps us become better thinkers and makes us curious to know more about the world.

Now, let's look at some brain workouts to help us think better:

1. "What If" Scenarios

Imagine crazy things happening, like, "What if there was no internet for a month? What would we do?" These games help us think of new and different ideas.

Pick a hot topic. Argue one side of it and then try arguing the opposite. This makes us see different viewpoints and think deeply about a topic.

3. Analyze Visual Data

Check out charts or pictures with lots of numbers and info but no explanations. What story are they telling? This helps us get better at understanding information just by looking at it.

4. Mind Mapping

Write an idea in the center and then draw lines to related ideas. It's like making a map of your thoughts. This helps us see how everything is connected.

There's lots of mind-mapping software , but it's also nice to do this by hand.

5. Weekly Diary

Every week, write about what happened, the choices you made, and what you learned. Writing helps us think about our actions and how we can do better.

6. Evaluating Information Sources

Collect stories or articles about one topic from newspapers or blogs. Which ones are trustworthy? Which ones might be a little biased? This teaches us to be smart about where we get our info.

There are many resources to help you determine if information sources are factual or not.

7. Socratic Questioning

This way of thinking is called the Socrates Method, named after an old-time thinker from Greece. It's about asking lots of questions to understand a topic. You can do this by yourself or chat with a friend.

Start with a Big Question:

"What does 'success' mean?"

Dive Deeper with More Questions:

"Why do you think of success that way?" "Do TV shows, friends, or family make you think that?" "Does everyone think about success the same way?"

"Can someone be a winner even if they aren't rich or famous?" "Can someone feel like they didn't succeed, even if everyone else thinks they did?"

Look for Real-life Examples:

"Who is someone you think is successful? Why?" "Was there a time you felt like a winner? What happened?"

Think About Other People's Views:

"How might a person from another country think about success?" "Does the idea of success change as we grow up or as our life changes?"

Think About What It Means:

"How does your idea of success shape what you want in life?" "Are there problems with only wanting to be rich or famous?"

Look Back and Think:

"After talking about this, did your idea of success change? How?" "Did you learn something new about what success means?"

8. Six Thinking Hats 

Edward de Bono came up with a cool way to solve problems by thinking in six different ways, like wearing different colored hats. You can do this independently, but it might be more effective in a group so everyone can have a different hat color. Each color has its way of thinking:

White Hat (Facts): Just the facts! Ask, "What do we know? What do we need to find out?"

Red Hat (Feelings): Talk about feelings. Ask, "How do I feel about this?"

Black Hat (Careful Thinking): Be cautious. Ask, "What could go wrong?"

Yellow Hat (Positive Thinking): Look on the bright side. Ask, "What's good about this?"

Green Hat (Creative Thinking): Think of new ideas. Ask, "What's another way to look at this?"

Blue Hat (Planning): Organize the talk. Ask, "What should we do next?"

When using this method with a group:

• Explain all the hats.
• Decide which hat to wear first.
• Make sure everyone switches hats at the same time.
• Finish with the Blue Hat to plan the next steps.

9. SWOT Analysis

SWOT Analysis is like a game plan for businesses to know where they stand and where they should go. "SWOT" stands for Strengths, Weaknesses, Opportunities, and Threats.

There are a lot of SWOT templates out there for how to do this visually, but you can also think it through. It doesn't just apply to businesses but can be a good way to decide if a project you're working on is working.

Strengths: What's working well? Ask, "What are we good at?"

Weaknesses: Where can we do better? Ask, "Where can we improve?"

Opportunities: What good things might come our way? Ask, "What chances can we grab?"

Threats: What challenges might we face? Ask, "What might make things tough for us?"

Steps to do a SWOT Analysis:

• Goal: Decide what you want to find out.
• Research: Learn about your business and the world around it.
• Brainstorm: Get a group and think together. Talk about strengths, weaknesses, opportunities, and threats.
• Pick the Most Important Points: Some things might be more urgent or important than others.
• Make a Plan: Decide what to do based on your SWOT list.
• Check Again Later: Things change, so look at your SWOT again after a while to update it.

Now that you have a few tools for thinking critically, let’s get into some specific examples.

Everyday Examples

Life is a series of decisions. From the moment we wake up, we're faced with choices – some trivial, like choosing a breakfast cereal, and some more significant, like buying a home or confronting an ethical dilemma at work. While it might seem that these decisions are disparate, they all benefit from the application of critical thinking.

10. Deciding to buy something

Imagine you want a new phone. Don't just buy it because the ad looks cool. Think about what you need in a phone. Look up different phones and see what people say about them. Choose the one that's the best deal for what you want.

11. Deciding what is true

There's a lot of news everywhere. Don't believe everything right away. Think about why someone might be telling you this. Check if what you're reading or watching is true. Make up your mind after you've looked into it.

12. Deciding when you’re wrong

Sometimes, friends can have disagreements. Don't just get mad right away. Try to see where they're coming from. Talk about what's going on. Find a way to fix the problem that's fair for everyone.

13. Deciding what to eat

There's always a new diet or exercise that's popular. Don't just follow it because it's trendy. Find out if it's good for you. Ask someone who knows, like a doctor. Make choices that make you feel good and stay healthy.

14. Deciding what to do today

Everyone is busy with school, chores, and hobbies. Make a list of things you need to do. Decide which ones are most important. Plan your day so you can get things done and still have fun.

15. Making Tough Choices

Sometimes, it's hard to know what's right. Think about how each choice will affect you and others. Talk to people you trust about it. Choose what feels right in your heart and is fair to others.

16. Planning for the Future

Big decisions, like where to go to school, can be tricky. Think about what you want in the future. Look at the good and bad of each choice. Talk to people who know about it. Pick what feels best for your dreams and goals.

Job Examples

17. solving problems.

Workers brainstorm ways to fix a machine quickly without making things worse when a machine breaks at a factory.

18. Decision Making

A store manager decides which products to order more of based on what's selling best.

19. Setting Goals

A team leader helps their team decide what tasks are most important to finish this month and which can wait.

20. Evaluating Ideas

At a team meeting, everyone shares ideas for a new project. The group discusses each idea's pros and cons before picking one.

21. Handling Conflict

Two workers disagree on how to do a job. Instead of arguing, they talk calmly, listen to each other, and find a solution they both like.

22. Improving Processes

A cashier thinks of a faster way to ring up items so customers don't have to wait as long.

23. Asking Questions

Before starting a big task, an employee asks for clear instructions and checks if they have the necessary tools.

24. Checking Facts

Before presenting a report, someone double-checks all their information to make sure there are no mistakes.

25. Planning for the Future

A business owner thinks about what might happen in the next few years, like new competitors or changes in what customers want, and makes plans based on those thoughts.

26. Understanding Perspectives

A team is designing a new toy. They think about what kids and parents would both like instead of just what they think is fun.

School Examples

27. researching a topic.

For a history project, a student looks up different sources to understand an event from multiple viewpoints.

28. Debating an Issue

In a class discussion, students pick sides on a topic, like school uniforms, and share reasons to support their views.

29. Evaluating Sources

While writing an essay, a student checks if the information from a website is trustworthy or might be biased.

30. Problem Solving in Math

When stuck on a tricky math problem, a student tries different methods to find the answer instead of giving up.

31. Analyzing Literature

In English class, students discuss why a character in a book made certain choices and what those decisions reveal about them.

32. Testing a Hypothesis

For a science experiment, students guess what will happen and then conduct tests to see if they're right or wrong.

33. Giving Peer Feedback

After reading a classmate's essay, a student offers suggestions for improving it.

34. Questioning Assumptions

In a geography lesson, students consider why certain countries are called "developed" and what that label means.

35. Designing a Study

For a psychology project, students plan an experiment to understand how people's memories work and think of ways to ensure accurate results.

36. Interpreting Data

In a science class, students look at charts and graphs from a study, then discuss what the information tells them and if there are any patterns.

Critical Thinking Puzzles

Not all scenarios will have a single correct answer that can be figured out by thinking critically. Sometimes we have to think critically about ethical choices or moral behaviors. 

Here are some mind games and scenarios you can solve using critical thinking. You can see the solution(s) at the end of the post.

37. The Farmer, Fox, Chicken, and Grain Problem

A farmer is at a riverbank with a fox, a chicken, and a grain bag. He needs to get all three items across the river. However, his boat can only carry himself and one of the three items at a time. 

Here's the challenge:

• If the fox is left alone with the chicken, the fox will eat the chicken.
• If the chicken is left alone with the grain, the chicken will eat the grain.

How can the farmer get all three items across the river without any item being eaten? 

38. The Rope, Jar, and Pebbles Problem

You are in a room with two long ropes hanging from the ceiling. Each rope is just out of arm's reach from the other, so you can't hold onto one rope and reach the other simultaneously. 

Your task is to tie the two rope ends together, but you can't move the position where they hang from the ceiling.

You are given a jar full of pebbles. How do you complete the task?

39. The Two Guards Problem

Imagine there are two doors. One door leads to certain doom, and the other leads to freedom. You don't know which is which.

In front of each door stands a guard. One guard always tells the truth. The other guard always lies. You don't know which guard is which.

You can ask only one question to one of the guards. What question should you ask to find the door that leads to freedom?

40. The Hourglass Problem

You have two hourglasses. One measures 7 minutes when turned over, and the other measures 4 minutes. Using just these hourglasses, how can you time exactly 9 minutes?

41. The Lifeboat Dilemma

Imagine you're on a ship that's sinking. You get on a lifeboat, but it's already too full and might flip over. 

Nearby in the water, five people are struggling: a scientist close to finding a cure for a sickness, an old couple who've been together for a long time, a mom with three kids waiting at home, and a tired teenager who helped save others but is now in danger. 

You can only save one person without making the boat flip. Who would you choose?

42. The Tech Dilemma

You work at a tech company and help make a computer program to help small businesses. You're almost ready to share it with everyone, but you find out there might be a small chance it has a problem that could show users' private info. 

If you decide to fix it, you must wait two more months before sharing it. But your bosses want you to share it now. What would you do?

43. The History Mystery

Dr. Amelia is a history expert. She's studying where a group of people traveled long ago. She reads old letters and documents to learn about it. But she finds some letters that tell a different story than what most people believe. 

If she says this new story is true, it could change what people learn in school and what they think about history. What should she do?

The Role of Bias in Critical Thinking

Have you ever decided you don’t like someone before you even know them? Or maybe someone shared an idea with you that you immediately loved without even knowing all the details. 

This experience is called bias, which occurs when you like or dislike something or someone without a good reason or knowing why. It can also take shape in certain reactions to situations, like a habit or instinct. 

Bias comes from our own experiences, what friends or family tell us, or even things we are born believing. Sometimes, bias can help us stay safe, but other times it stops us from seeing the truth.

Not all bias is bad. Bias can be a mechanism for assessing our potential safety in a new situation. If we are biased to think that anything long, thin, and curled up is a snake, we might assume the rope is something to be afraid of before we know it is just a rope.

While bias might serve us in some situations (like jumping out of the way of an actual snake before we have time to process that we need to be jumping out of the way), it often harms our ability to think critically.

How Bias Gets in the Way of Good Thinking

Selective Perception: We only notice things that match our ideas and ignore the rest. 

It's like only picking red candies from a mixed bowl because you think they taste the best, but they taste the same as every other candy in the bowl. It could also be when we see all the signs that our partner is cheating on us but choose to ignore them because we are happy the way we are (or at least, we think we are).

Agreeing with Yourself: This is called “ confirmation bias ” when we only listen to ideas that match our own and seek, interpret, and remember information in a way that confirms what we already think we know or believe. 

An example is when someone wants to know if it is safe to vaccinate their children but already believes that vaccines are not safe, so they only look for information supporting the idea that vaccines are bad.

Thinking We Know It All: Similar to confirmation bias, this is called “overconfidence bias.” Sometimes we think our ideas are the best and don't listen to others. This can stop us from learning.

Have you ever met someone who you consider a “know it”? Probably, they have a lot of overconfidence bias because while they may know many things accurately, they can’t know everything. Still, if they act like they do, they show overconfidence bias.

There's a weird kind of bias similar to this called the Dunning Kruger Effect, and that is when someone is bad at what they do, but they believe and act like they are the best .

Following the Crowd: This is formally called “groupthink”. It's hard to speak up with a different idea if everyone agrees. But this can lead to mistakes.

An example of this we’ve all likely seen is the cool clique in primary school. There is usually one person that is the head of the group, the “coolest kid in school”, and everyone listens to them and does what they want, even if they don’t think it’s a good idea.

How to Overcome Biases

Here are a few ways to learn to think better, free from our biases (or at least aware of them!).

Know Your Biases: Realize that everyone has biases. If we know about them, we can think better.

Listen to Different People: Talking to different kinds of people can give us new ideas.

Ask Why: Always ask yourself why you believe something. Is it true, or is it just a bias?

Understand Others: Try to think about how others feel. It helps you see things in new ways.

Keep Learning: Always be curious and open to new information.

In today's world, everything changes fast, and there's so much information everywhere. This makes critical thinking super important. It helps us distinguish between what's real and what's made up. It also helps us make good choices. But thinking this way can be tough sometimes because of biases. These are like sneaky thoughts that can trick us. The good news is we can learn to see them and think better.

There are cool tools and ways we've talked about, like the "Socratic Questioning" method and the "Six Thinking Hats." These tools help us get better at thinking. These thinking skills can also help us in school, work, and everyday life.

We’ve also looked at specific scenarios where critical thinking would be helpful, such as deciding what diet to follow and checking facts.

Thinking isn't just a skill—it's a special talent we improve over time. Working on it lets us see things more clearly and understand the world better. So, keep practicing and asking questions! It'll make you a smarter thinker and help you see the world differently.

Critical Thinking Puzzles (Solutions)

The farmer, fox, chicken, and grain problem.

• The farmer first takes the chicken across the river and leaves it on the other side.
• He returns to the original side and takes the fox across the river.
• After leaving the fox on the other side, he returns the chicken to the starting side.
• He leaves the chicken on the starting side and takes the grain bag across the river.
• He leaves the grain with the fox on the other side and returns to get the chicken.
• The farmer takes the chicken across, and now all three items -- the fox, the chicken, and the grain -- are safely on the other side of the river.

The Rope, Jar, and Pebbles Problem

• Take one rope and tie the jar of pebbles to its end.
• Swing the rope with the jar in a pendulum motion.
• While the rope is swinging, grab the other rope and wait.
• As the swinging rope comes back within reach due to its pendulum motion, grab it.
• With both ropes within reach, untie the jar and tie the rope ends together.

The Two Guards Problem

The question is, "What would the other guard say is the door to doom?" Then choose the opposite door.

The Hourglass Problem

• Start both hourglasses. 
• When the 4-minute hourglass runs out, turn it over.
• When the 7-minute hourglass runs out, the 4-minute hourglass will have been running for 3 minutes. Turn the 7-minute hourglass over. 
• When the 4-minute hourglass runs out for the second time (a total of 8 minutes have passed), the 7-minute hourglass will run for 1 minute. Turn the 7-minute hourglass again for 1 minute to empty the hourglass (a total of 9 minutes passed).

The Boat and Weights Problem

Take the cat over first and leave it on the other side. Then, return and take the fish across next. When you get there, take the cat back with you. Leave the cat on the starting side and take the cat food across. Lastly, return to get the cat and bring it to the other side.

The Lifeboat Dilemma

There isn’t one correct answer to this problem. Here are some elements to consider:

• Moral Principles: What values guide your decision? Is it the potential greater good for humanity (the scientist)? What is the value of long-standing love and commitment (the elderly couple)? What is the future of young children who depend on their mothers? Or the selfless bravery of the teenager?
• Future Implications: Consider the future consequences of each choice. Saving the scientist might benefit millions in the future, but what moral message does it send about the value of individual lives?
• Emotional vs. Logical Thinking: While it's essential to engage empathy, it's also crucial not to let emotions cloud judgment entirely. For instance, while the teenager's bravery is commendable, does it make him more deserving of a spot on the boat than the others?
• Acknowledging Uncertainty: The scientist claims to be close to a significant breakthrough, but there's no certainty. How does this uncertainty factor into your decision?
• Personal Bias: Recognize and challenge any personal biases, such as biases towards age, profession, or familial status.

The Tech Dilemma

Again, there isn’t one correct answer to this problem. Here are some elements to consider:

• Evaluate the Risk: How severe is the potential vulnerability? Can it be easily exploited, or would it require significant expertise? Even if the circumstances are rare, what would be the consequences if the vulnerability were exploited?
• Stakeholder Considerations: Different stakeholders will have different priorities. Upper management might prioritize financial projections, the marketing team might be concerned about the product's reputation, and customers might prioritize the security of their data. How do you balance these competing interests?
• Short-Term vs. Long-Term Implications: While launching on time could meet immediate financial goals, consider the potential long-term damage to the company's reputation if the vulnerability is exploited. Would the short-term gains be worth the potential long-term costs?
• Ethical Implications : Beyond the financial and reputational aspects, there's an ethical dimension to consider. Is it right to release a product with a known vulnerability, even if the chances of it being exploited are low?
• Seek External Input: Consulting with cybersecurity experts outside your company might be beneficial. They could provide a more objective risk assessment and potential mitigation strategies.
• Communication: How will you communicate the decision, whatever it may be, both internally to your team and upper management and externally to your customers and potential users?

The History Mystery

Dr. Amelia should take the following steps:

• Verify the Letters: Before making any claims, she should check if the letters are actual and not fake. She can do this by seeing when and where they were written and if they match with other things from that time.
• Get a Second Opinion: It's always good to have someone else look at what you've found. Dr. Amelia could show the letters to other history experts and see their thoughts.
• Research More: Maybe there are more documents or letters out there that support this new story. Dr. Amelia should keep looking to see if she can find more evidence.
• Share the Findings: If Dr. Amelia believes the letters are true after all her checks, she should tell others. This can be through books, talks, or articles.
• Stay Open to Feedback: Some people might agree with Dr. Amelia, and others might not. She should listen to everyone and be ready to learn more or change her mind if new information arises.

Ultimately, Dr. Amelia's job is to find out the truth about history and share it. It's okay if this new truth differs from what people used to believe. History is about learning from the past, no matter the story.

Related posts:

• Experimenter Bias (Definition + Examples)
• Hasty Generalization Fallacy (31 Examples + Similar Names)
• Ad Hoc Fallacy (29 Examples + Other Names)
• Confirmation Bias (Examples + Definition)
• Equivocation Fallacy (26 Examples + Description)

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Harris Calls for US Critical Minerals Reserve, Tax Credits

In this article:.

(Bloomberg) -- US Vice President Kamala Harris vowed to create a national stockpile of critical minerals, saying a cache of the materials used in everything from batteries to defense systems is needed for economic and national security.

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The plan, part of a broader $100 billion industrial policy vision Harris’ campaign laid out Wednesday, also called for new incentives and the use of emergency government powers under the Cold War-era Defense Production Act to increase domestic processing of critical minerals.

“Increased domestic production will be paired with innovative and sustainable steps to build stronger critical mineral supply chains alongside our allies and partners, including by incentivizing investments that expand US and allied production of these resources,” the Harris campaign said in a statement. “These efforts will reduce our dependence on China, which leads production on many critical minerals.”

As part of the plan, the campaign said Harris was proposing “America Forward” tax credits to be used in the energy, manufacturing and agricultural sectors that would be “linked to the treatment of workers” and paid for in part by Harris’ proposal to overhaul the international tax system.

Critical minerals — which include dozens of materials including antimony, lithium, and cobalt — are those considered essential to the economy and at risk of supply disruption. The House Select Committee on Strategic Competition between the US and the Chinese Communist Party in December recommended creating a reserve of critical minerals “to insulate American producers from price volatility” and protect against China’s “weaponization of its dominance in critical mineral supply chains.”

The committee also recommended spending $1 billion to expand an existing National Defense Stockpile, an inventory of critical minerals managed by the Defense Department that is used to provide emergency access to domestic manufacturers for defense purposes.

“Over the past several decades, China has cornered the market for processing and refining of key critical minerals, leaving the US and our allies and partners vulnerable to supply chain shocks and undermining economic and national security,” the White House said in a statement last week. “As the world builds a clean energy economy, demand for critical minerals is projected to grow exponentially.”

(Updates with tax credit details in fourth paragraph.)

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Van Goghs attacked again, hours after activists sentenced

STORY: :: Just Stop Oil

Three activists from Just Stop Oil threw soup at two of Vincent van Gogh’s “Sunflowers” paintings in London’s National Gallery on Friday...

Just hours after two members of the same group were sentenced to jail time...

:: October 14, 2022

:: Rich Felgate/ @finitedoc

...for doing the same thing in 2022.

In that incident, two members of the group threw tomato soup at a "Sunflowers" painting and then glued themselves to a wall.

PHOEBE PLUMMER: “What is worth more: art or life?”

That’s Phoebe Plummer in the video.

The now 23-year-old was handed a two year prison sentence for a criminal damage charge… plus an additional three months for the relatively new offense of interfering with the use of key national infrastructure.

PHOEBE PLUMMER: "...We cannot afford new oil and gas."

The other activist from 2022 was Anna Holland, who was sentenced to 20 months.

The pair had pleaded not guilty.

Prosecutors said the soup toss caused over $13,000 worth of damage to the painting’s frame.

The work itself was behind a protective screen.

It was undamaged and went back on display the same day.

The judge said the pair had no right to do what they did, adding, quote, “your arrogance in thinking otherwise deserves the strongest condemnation.”

Plummer said she was being made a political prisoner, an assertion that drew a critical rebuke from the judge.

There’s been a wider crackdown on protest movements in Britain and across Europe.

In July, five members of Just Stop Oil were jailed for at least four years for a conspiracy to block London's M25 highway.

They were the longest sentences ever imposed for a non-violent protest in Britain.

:: Just Stop Oil

Friday’s soup throwers targeted one Van Gogh painting owned by the London gallery — the same one struck in 2022 — and another on loan.

The National Gallery said three people had been arrested…

and no damage had been done to the paintings