I am asked almost every week about the concept of “Critical Thinking.”
Critical Thinking means something different to a lot of people and you only have to go to Google and
type in and search for it to find out that in 1/3 of a second, you get more than 2 billion hits!
Let that sink in—more than 2 billion hits.
One of the things I have been working on over the past few weeks is a short and concise blog about developing Critical Thinking Skills in business professionals and this is the culmination of research and years of experience working with more than 10,000 leaders.
The Advantexe Critical Business Framework
Everything starts with the framework that defines the way we view it…
How to Develop the Skills
You’ve just taken a few moments to read the 8 points and if you are like most people, you are shaking your head and thinking, “Yes, that sounds good, I like it.”
And that is part of the problem of developing the skills. You don’t “get it” by just reading it; you only get it by doing it over and over again until you can use the framework meaninglessly in the flow of work.
That is why a business simulation is the perfect way to learn Critical Business Thinking. By engaging in a realistic business case study that comes to life, learners can build the cognitive linkages between practice and application back to the real world.
Here is a step-by-step overview of how it can work:
Define the challenge or opportunity at the strategic / macro-level – In a strong business simulation, learners are taking over a business in a defined situation such as its sales are decreasing, margins are decreasing, customer satisfaction is down, etc. Learners immerse themselves in the simulation background and define the challenges and opportunities strategically.
Gather information – In the next step, learners engage with the simulated company to gather information. What’s interesting is that we typically will create artificial boundaries like time to force learners to manage their time and focus on the most important information. That can be difficult, so it is truly a learning-by-doing process.
Prioritize the information as it relates to the business strategy – Once the information has been gathered, prioritizing it to the business strategy is an extremely hard step. This is where the business acumen comes in. Learners need to first understand business strategy, and then make linkages back to what is most important short-term and long-term. When executives think about critical thinking, this is the one element of the framework they think of the most.
Analyze and understand the information – Once the information has been prioritized, the next critical step is analyzing it and understanding it. For example, in many of our core business simulations margins are dropping for the mature products and it is up to learners to analyze the information and understand it. Is it because inventories are up? Are there issues in the supply chain? Did the materials cost go up? Or maybe it is the labor costs. It could be a number of things but the skill is to analyze and understand.
Develop a portfolio of alternative solutions – The framework pivots with the development of a hypothesis and portfolio of alternative solutions. If our margins are going down, what if we raise the price? Find a new vendor that has less expensive costs. Make more products and spread the costs? Increase Marketing and Sales to drive higher-quality revenue.
Define the assumptions made – After defining the potential solutions, an open, honest, and transparent review of the assumptions that have been made in building the portfolio of solutions is critical. Why do you think you will generate more revenue if you raise the price? Why if the new vendor has lower prices but the quality isn’t as good? What if you make more products, but can’t sell them? The implications of making the wrong assumptions can be devastating and I will share that it is astounding how little effort of put toward this part of the process.
Define the decisions at the micro-level required to make the alternative decisions – The next step of the process is a detail-oriented approach to defining the decisions that need to be made at the micro-level to execute the alternative decisions. By thinking through the details, and laying them out in a way that provides insights into the short and long-term implications, decision-makers can “see” the enterprise's view of the potential solutions as they transcend the system of the business.
Explicitly define the implications of the decisions through the what-if analysis – The final phase is a what-if analysis. The beauty of utilizing a business simulation to learn critical thinking is that every simulation contains a sophisticated what-if analysis tool that enables learners to try different solutions and decisions to see their potential outcomes at the same time you can explore the different associated risks.
In summary, there are many people who believe you can’t teach Critical Thinking I disagree and have been doing it for a long time. Using business simulations is a fantastic way to do it and the framework provided in this blog when used in combination with a simulation is a guarantee for success.
