Critical Thinking

by Marc Rounsaville on March 13, 2012

I would rather be lucky than good. We have all heard this homily and many of us have probably said it. I know I have. And I know deep down that I would rather be good than lucky. (Actually I would rather be both.) I know I can’t depend on luck but I can depend on skill. In the realm of decision-making one skill, a huge one, is critical thinking. More than anything else, mastery of this skill will improve the quality of your decisions. You may not have the time or resources to dig deep and do an exhaustive analysis of a situation. But regardless of the setting and without exception, you can without exception apply critical thinking skills to issues and problems.

Let’s use the debate on the increase in gas prices to demonstrate how these skills can be applied without having a lot of time for data and analysis.  Critical thinking has broken down in a big way, for a lot of folks.  This isn’t an indictment or endorsement of anyone or any position, but it does give us an opportunity to examine a familiar situation and demonstrate the opportunities that exist for expanding our skills.

Here’s the current situation:

Presidential candidates have made the price of gasoline an election issue.  Cheap gas is good for economic growth and recovery.  America needs a president that will lower the price of gasoline.  Right?

The price of gasoline has reached unprecedented levels; predictions estimate that fuel will cost over $5 a gallon by summer. The negative impacts of high priced gasoline on the economic recovery are vigorously touted. This drama is playing out in all forms of media. President Obama has been cast as the villain and a number of others have put themselves in the role of hero by promising $2 a gallon gasoline. But what is really going on and what is really possible? Are there any heroes and villains?

What are the facts? What do we know or make reasonable assumptions about?

  1. Gasoline was less then $2 per gallon in 2008.
  2. America imports more oil than it produces.
  3. Crude oil is a world commodity.
  4. Crude oil prices are sensitive to political unrest in oil producing regions.

Given this context, let’s apply some rudimentary critical thinking to these points.

1.  What was going on in 2008 that might have influenced the price of oil? There was a worldwide recession, which reduced demand.  Contrast that to now. China and India’s growth has increased and America is recovering.

2.  There is not consensus about how much oil is yet to be discovered, and how much of the untapped reserves might be under America.  That said, it is indisputable that production of whatever oil might be “out there” will take years. It is also indisputable that the “easy” oil has been found and additional finds will be more costly to produce. Therefore at a minimum America is years away from any major shift in oil imports as a result of developing new oil fields.

3.  No matter where the oil comes from America pays the “world” price. American or OPEC produced is the same price. Even if the origin of the crude was government owned it is priced the same. This won’t shift without shifting the entire American oil industry from private to government, which is not likely to happen.

4.  In 2008 there was a reasonable amount of political stability in much of the oil producing parts of the world. Recently the situations Libya, Syria and the Arab Spring have injected a measure of unrest and uncertainty into the region where much of the world’s oil is produced.

How much of this does the President control? Not very much. Demand is both international and phenomenally complex. Unrest and political strife are relatively independent of American influence. A dramatic shift in domestic production would take years and even then might not produce enough oil to influence prices.

This application of critical thinking, even in a somewhat rudimentary fashion, to the current set of issues about the price of gasoline leaves me believing gasoline is not going to get substantially cheaper soon and there is little the President can do to impact oil prices.

In this exercise we have taken a complex issue, applied critical thinking and developed a reasonable, defensible position. Contrast this to the rhetoric of the campaign, or the opinion that pundits are trying to “hand out”. Quite different, especially in terms of where the position or opinion arises.  This position can be used in our decision-making that would be affected by the cost of gasoline, i.e. this summer’s vacation drive, purchase of new car or whether gasoline prices will influence our vote.  This was done without a year’s worth of analysis or detailed statistical work. We used what we knew, what made sense and stepped away from the emotion of the decision.

What can you do to improve your critical thinking ability?

  • Ask why, several times. Bring up that child-like curiosity and ask why, why, why.
  • Step away from the emotion of the issue or the moment. Be dispassionate. Turn on that Dr. Spock like logic.
  • Listen to your intuition, it is telling you something is wrong. Figure out what is wrong and ask why, why, why.
  • Ask your self and your team, “What are we missing?” Assume you are missing something.
  • Write it down. Make a list of what you know, what you think and what you are assuming. Then challenge each item on the list.

Critical thinking is a skill as such it can be learned and like any other skill the more practice the better you get.

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Conversation Breakdowns

by Marc Rounsaville on March 6, 2012

Last week I asked a colleague for an opinion on a strategy document I was writing. I had spent a lot of time on it, and I wanted to be “done”. So when she offered her thoughts I started pushing back. Right up until the point she said, “Why are you being so defensive? I thought you wanted some help?”

That stopped me short. I apologized and began to actually listen; I took some of the advice, clarified why some of the recommendations would not work and completed a much-improved plan. Reflection on this exchange reminded me of a couple of communication breakdowns, which can affect all of us.

The first breakdown is advocacy masquerading as inquiry. I wasn’t really looking for feedback or a critique. I just wanted to be told how great my strategic plan was. Sometimes we hide advocacy like this. “This strategic plan is pretty good, right?” Looks and feels like a question but it really advocating for a particular position or viewpoint.

What I asked for and what I wanted were quite different. “Could you look this over and tell me what you think? This request was a subtler break than using “right?” at the end of a sentence. Nevertheless I was still advocating and it was still a conversation break.

The second breakdown is one known as move / oppose. This type of communication frequently precedes arguments. When my friend asked, ‘Why are you being so defensive?” my response was “I’m not defensive.” This led to “Yes you are!” I was smart enough to stop right there but it is easy to see how things can escalate.

This was a very short conversation, not a long exchange and it took place between two people that are usually quite aware and also know and trust one another. Imagine your conversations with associates, clients or others whom you may not know very well. Or what about those conversations with people you know and don’t trust so much? We talk all the time, but how often do we communicate? And how many times do our interactions leave us less than satisfied with the results?

Improving listening skills can improve our ability to defend against communication breaks. Listen to both sides of the conversation. Turn off the distractions. Be honest with yourself as to what you want from the interaction. Maybe even script your questions or play out the conversation in your head.

When I asked for feedback on the strategic plan I should have been specific about what I wanted. The conversation would have gone much differently if I had started it like this. “I want you to give me some feedback on this plan, but I have to say that I have really put a lot of time in and I just want a cursory look. I am sure it needs more work but I am a little stuck and a lot tired and just want to know if I am headed in the right direction.”

Giving this kind of detail as to where I was emotionally and what type and kind of feedback I needed sets the stage for a much more effective interaction.

This conversation set up would also allow for my colleague to “opt out”. She could have easily come back to me and said, “You know I am a perfectionist and it is really hard for me to ignore grammar and syntax errors.”

This type of conversation is not easy to do. We have all been trained and have developed a mental muscle memory that is quite different. This looks like it takes a lot of energy to set up and to keep on track and we may not want to put the energy into the conversation.  Just think for a minute how much energy is wasted when we don’t engage in effective communication.

When have your communications broken down?

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Risk and the Internet

February 28, 2012

Earlier this month Politics of The United States (POTUS) radio aired a story (a rebroadcast of a PBS Newshour show of 2/16/12) on the potential use of internet voting in American elections. I was fascinated that the journalist’s main points focused on the associated risks and consequences of taking this democratic process online.  With an […]

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Intuition is Always Right

February 13, 2012

Your intuition is always right 100% of the time. That is a strong statement. I am sure there are many that would argue that their intuition is not infallible and can give examples. It wasn’t long ago I would have agreed. We have all experienced the feeling that something is amiss. It is common for […]

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Experience Bias and Mental Models

February 7, 2012

Experience is a good thing, right? We want our leaders to experienced; it is required in many professions in order to get a license or certification – from real estate to medicine.  Who would want a surgeon to not be experienced? Most business leaders have decades of experience. There is overwhelming evidence that inexperienced drivers […]

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Decisions Decisions Decisions

February 1, 2012

How do you make decisions? Do you ever evaluate your decisions?  What does a good decision look like? This past week a colleague observed that if we never said no then our yes wouldn’t mean very much. This intrigued me. It reminded me of time when I was brought in to do a decision review […]

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How Do You Communicate Risk?

January 17, 2012

Humans are at best imperfect communicators which mean risk management often fails because communications breakdown. A variety of miscommunication occurs both intentionally and unintentionally. Intentionally and frequently we advocate for a decision cloaked in regular communication, or unintentionally we assume the people we are talking to have the same information, language and background of the […]

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How Do You Perceive Risk?

January 10, 2012

Are you risk averse, never take chances? Do you sit on the sidelines and watch others take the plunge? Are you risk seeking, always taking chances? Are you the first one in your group to go bungee jumping? Guess what, you are both. We all are. Risk averse and risk seeking are relative to each […]

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What’s Behind Door Number Three?

December 13, 2011

Sometimes we aren’t nearly as smart as we would like to think. Our brains can be full of tricks, just when we think we know how something works or we get a concept “down” we get shown maybe we haven’t mastered it. This is very true in the risk decisions and probabilities. There used to […]

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Solutions in Search of Problems

December 5, 2011

 One of the key drivers in risk management is how the problem or decision is framed or iniatialy described. First response to that statement is likely something along the order of “No joke.” A closer look will quickly reveal that the frame we put around the problem will define, to a large degree, the alternatives or […]

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