2 When to Use Critical Thinking

The previous chapter outlined some of the benefits of critical thinking. With so many advantages, it would seem we should think critically all the time. Although critical thinking is always useful and can be applied everywhere, it's not practical to think this way all the time. It's not only about where you apply critical thinking but also about when you apply it.

A simple rule to determine whether you should employ critical thinking in a given situation is when the result of a problem, initiative, goal, or circumstance (a headscratcher) is substantial. In other words, use critical thinking when the outcome makes a significant difference in your business or personal situation.

For example, a casual e-mail about where to eat lunch usually isn't catastrophic if there's a miscommunication. However, a misunderstood e-mail about the requirements of a product, or about a customer issue, may have far-reaching ramifications. As a result, you might want to use a little critical thinking on the e-mail that describes a customer issue, as opposed to the e-mail about lunch.

The following are three lists of examples of where and when you might use critical thinking. The first list contains high-level business functions; the second, specific business issues or goals; and the third, day-to-day activities many use to achieve those business goals. Once you learn the critical thinking tools, you'll add to this list with areas specific to your job.

List 1: Business Functions That Benefit from Critical Thinking

• Account management
• Automation
• Budgeting
• Build versus buy decisions
• Competitive analysis
• Contracts
• Cost-reduction initiatives
• Crisis management
• Customer care improvement
• Customer retention strategies
• Development processes
• Diagnosis
• Employee leadership development
• Employee productivity
• Financial decisions
• Human resources issues
• Information systems
• Inventory control
• Investment management
• Mergers and acquisitions
• New product ideas and creation
• Operational efficiency
• Outsource versus in-source decisions
• Partnership-related issues
• Product management
• Product marketing
• Project management
• Proposal evaluations
• Quality assurance control
• Resource management
• Responses to requests for information (RFIs), requests for proposals (RFPs), and bids
• Revenue generation strategies
• Risk management
• Sales and marketing tactics
• Short- and long-term business strategies
• Space planning
• Succession planning
• Task coordination
• Technology infrastructure
• Time, cost, and resource planning

List 2: Examples of Specific Business Issues and Goals for Which Critical Thinking Should Be Used

To understand a situation that is unclear:

• There is a flurry of activity in sales and the pipeline is at high levels, yet closed sales are flat.
• Customer care call volume has significantly changed for no apparent reason.
• A series of manufacturing errors has occurred without an explanation.
• Prospective customers seem interested in your product, yet few actually buy it.
• The cost of operations is increasing, but the volumes being processed are not.
• A project plan has milestones with particular dates and deliverables, but people aren't meeting the time-frame deadlines.
• A change in the norm has occurred with no obvious explanation.
• The metrics you're tracking are not capable of guiding improvement or predicting an outcome.
• You've made a call for root-cause analysis to find the original cause of something, and it produces an unexpected result.
• Inventory or usage of parts does not reconcile with the finished product.
• Delivered products or services do not reconcile with bills or revenue.
• Incremental expenses in growth do not equal decremental savings in reduction.
• Two people using the same data obtain different conclusions.
• Conclusions about data don't add up or make sense.
• The graph of something measured or projected has a sudden slope change.
• Customers are reporting an error rate that is significantly different from what you are measuring.

To improve something:

• To decrease the cost of customer care by 25 percent yet increase customer satisfaction.
• To increase productivity.
• To improve communications between your department and another.
• To determine how to change the marketing strategy to be more competitive.
• To grow your business.
• To decrease costs by 25 percent.
• To find and hire more qualified candidates.
• To determine what to do with ever-increasing health care costs.
• To shorten development times by a third.
• To decrease mean time to repair (MTR) by 20 percent.
• To shorten order-to-delivery time by half.
• To increase the quality of products so that the customer rating is 5 out of 5.
• To improve an advertising campaign's results.

When looking toward the future, consider:

• How can we create a new product that will compete with the new service our primary competitor just introduced?
• Two key employees just quit—now what?
• Our legacy product, which produces the majority of our revenues and profit, has a high attrition rate. What should we do?
• How do we avoid this [insert unpleasant event] from ever happening again?
• How do we replicate what we just did for the next time?
• Should we build or buy our way to expand our service offerings?
• How do we finance an expansion strategy?
• Given our budget, how do we accomplish our objectives?
• How do I progress my career?

List 3: Examples of Specific Day-to-Day Activities for Which Critical Thinking Can Be Helpful

• Assembling or fixing something
• Attending meetings
• Assessing risk
• Coaching
• Conducting brainstorming sessions
• Creating and interpreting surveys
• Creating presentations
• Engaging in financial planning activities
• Engaging in one-on-one conversations
• Evaluating proposals
• Making go or no-go decisions
• Organizing
• Planning your schedule/calendar
• Preparing speeches
• Prioritizing
• Reading (Are you paying attention to the underlying meaning of the words?)
• Reviewing contracts
• Reviewing spreadsheets
• Setting goals
• Setting metrics
• Teaching
• Writing (e-mails, directions, proposals, reports, etc.)
• Writing and conducting performance evaluations