Let's start with a caveat. This isn't about some mumbo-jumbo about if you think positively positive outcomes will happen paradign. That fluff lies in the understandably attractive, but flawed, realm of pseudo-science[1] that sounds nice, but is ultimately like jumping off a cliff, flapping your arms, and believing that you can fly to France.

So, what is the true power of thought? Applied critical thinking is about:

  • overcoming biases, of which there are many that we all suffer from to one degree or another;
  • tackling logical fallacies, areas that the psychologst Michael Sherma covers in his excellent article How Thinking Goes Wrong, and discussed elsewhere on this site; and
  • achieving outcomes that are realistic, achievable, and desirable.

To achieve a good outcome tools and methodologies can help. These fall into a number of categories:

  • Analysis tools that help in understand the world as it is now, such as SWOT analysis;
  • Analysis tools that help in understand aspects of the current situation that might be changed (by us or by external actors) and the effect such changes might have, such as Game Theory;
  • Tools that give early warning if things aren't going as expected so we can try to get things back on track or, if necessaary, pivot onto a new strategy, such as leading indicators; and
  • Tools that help structure thinkng logically, such as that buzzword of the moment, mindfulness[2]

This article is meant as a high-level discussion on thinking, and the tools that can help us achieve quality thought, so I'm only going to list out some here. How each adds its own particular value will be covered in separate articles, so watch for those.

Now, before going further, it's worth pointing out that context is king. If you decide to do a SWOT analysis, for example, try it from more than one actor's perspective to bring about additional insights. This is true with Game Theory, STEEPLE[3], and others. Adotping different perspectives (context) hones thinking.

Finally, it's worth stating that no one tool is king here. Using a variety of tools will bring the best value, as will building on experience.

Tools that help understand the world as it is now

Here are some tools that are useful to consider when assessing where you are now; the landscape.

  • SWOT Analysis. It's been around for years and is very useful
  • GAME Thoery, especially PARTS (we'll delve more into that later)
  • STEEPLE.
  • Force Field Analysis.
  • Stakeholder mapping.

Tools to help identify what can be changed

These tools are meant to help define what dan be changed and how making changes will affect your position.

  • GAME Theory (again)
  • Pre-Mortem
  • Network theory

Tools for early warning of trouble

Here, we're really talking about leading indicators, as opposed to lagging indicators. Again, this is an area where context is crucial because what acts as a lagging indicator to one part of a business, or industry, can be a leading indicator to another. Consider, for example, the number of sales closed in the last month. To the Head of Sales this is a lagging indicator -- we closed X orders last month -- but to the CFO this is a leading indicator of future revenue.

Tools that help structure our thinking

This is the most interesting of the categories. In a sense it also encapsulates the previous ones -- if we use Game Theory well, it helps to structure our thinking; ditto for STEEPLE, etc. Yet, at another level, we are, here, concerned with what Michael Shermer calls How Thinking Goes Wrong[4], the cognitive biases identified by the psychologist Daniel Khanneman (recommended read: Thinking Fast and Slow), and others such as the psychology of human misjudgement (the link is to an audio speach by Charlie Munger at Harvard in 1995[5]). These tools are numerous, but include:

  • Under reocgnition of the power of reinforcement / incentives;
  • Sunk cost fallacy (we've sunk $x and it's not working, therefore we need to spend another $y to get it woking, which often leads to projects hugely overunning--viz. the Scottish Parliament debacle).
  • Cognitive disonance (application of inconsistent beliefs to avoid mental discomfort);
  • Affect heuristics (where a team falls in love with its own proposal);
  • Disaster neglect (is the worse case bad enough?);
  • Groupthink (has the team leader / manager / exec allowed enough dissent to be voiced and then explored it properly;
  • Operant conditioning (behaviour modified by poor reinforcement or punishment);
  • Social Proof (doing something because other people are doing it, so it must be the right thing, right?);
  • Anchoring bias (we get attached to the numbers we first hear and don't want to travel far from them).

The above just scratch the surface, but hopefully give a good flavour of the traps that can befall us and some of the tools we can use. As mentioned, I'll be covering many of these in later posts and will link to them from here (plus they'll be available from the tag pages).

Notes


  1. The idea that positive thoughts can (literally) create positive outcomes / positive energy (sometimes to the point that positive thoughts are able to cure disease without medical assistance being required) is a form of madness whose origins are steeped in dubious thinking born during the Protestant Reformation and Mary Baker Eddy's Christian Science, and which has bubbled up through the ranks of New Age conciousness and into a multitude of self-help books that border on psychological nonesense. For a good overveiw of this, see Good Strategy/Bad Strategy: The difference and why it matters, page 71. ↩︎

  2. Yes, there's lots of mumbo-jumbo, but there also exist mindfulness techniques scientifically proven to provide strength and clarity. ↩︎

  3. Many people may be more familiar with PESTLE, a mnemonic that reminds us to evaluate the Political, Economic, Societal, Technological, and Environmental aspects of projects, strategy, and the like. The more observant reader will see that STEEPLE is just an anagram of PESTLE but with and extra E. What's that extra E for? Ethics, that's what. Good ethics can also create good business (and a sense of personal fulfilment). ↩︎

  4. If you'd like to know more about the work of Michael Shermer, I recommed heading over to Skeptic Magazine where a lot of good work is done to debunk psuedoscience in a rational and measured way. ↩︎

  5. You can download a transcript instead if you prefer to read, here. ↩︎