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

The latest economic crisis highlighted a plethora of bad decisions, made by well-educated leaders using the best tools and data available.

As these decisions are analysed and criticised, an alternative school of thought is becoming mainstream. Both behavioural economics and neuroscience confer that decision-making is emotional, irrational and based on tacit assumptions.

Savvy decision-makers are now turning to both technical and cognitive tools to guard against making poor decisions. One such tool is critical thinking — an indispensable management aid right up there with emotional intelligence.

Critical thinking is neither creative nor strategic thinking; it is a way of striving for the highest level of reasoning and judgment that leads to sound decision-making. It is thinking about thinking.

Here are a few ideas that form the foundation of critical thinking:

Become aware that mental biases exist

A mental bias is a distortion of how people perceive reality and process information. You should be aware of how these affect your thinking so as to avoid them and their consequences. Over 100 mental biases have been documented.

Psychologists Amos Tversky and Daniel Kahneman first introduced the idea of mental biases in 1972. The latter was awarded a Nobel Prize in 2002 for this work.

Here are two common mental biases:

Framing. Packaging is a multibillion-dollar industry because how an object is presented affects its desirability. How a problem is framed or presented has been shown to have far-reaching consequences on our conclusions as well. 

Have a look at this sequence of numbers 5-4-9-1-7-10-3-2.

6 and 8 have been omitted. Can you see where they belong? Tricky, isn’t it?

This problem is presented numerically, leading you to think in numbers. These numbers are in alphabetical order, which is hard to see if you are in a numeric frame of mind.

Those trained in creative subjects and critical thinkers are capable of purposefully changing their frame or perspective on a problem to come up with better solutions faster.

Decision-making tools that encourage different points of view such as Edward De Bono’s Six Thinking Hats or Systems Thinking help to avoid falling into such framing traps.

Sharp decision makers aren’t afraid to acknowledge that their initial frame of mind may not be the only one nor the best with which to tackle a problem.

Confirmation bias. This is a systematic error where people look for, recall or interpret information so that it confirms their own point of view. Perhaps you have your heart set on a certain product that you research on the Internet before buying. You may notice that you gather more positive than negative reviews.

This bias can lead to disastrous decisions, especially in organisational, military and political contexts where leaders tend to surround themselves with like-minded people rather than those who really challenge their decisions.

Reduce biases that lead to suboptimal outcomes

Admitting that you make mental mistakes is the first and most critical step in the critical thinking process. Thereafter, the quality of your decision-making can be significantly boosted with some simple steps.

* Look for evidence that tests your ideas, not merely confirms them.

* Before dismissing negative feedback, try to defend it.

* Actively seek out at least two contrary opinions to challenge your idea.

These steps are surprisingly hard to do. However, if you want to make the best possible decisions, you will need to take the necessary steps to avoid mental biases.