Pitfalls of Critical Thinking

Once you have mastered the skill of critical thinking, the road ahead is a smooth drive for logical interpretation of issues, right?  Well, that may not always be the case.  Large potholes may lurk in your path and the road may lead to nowhere or lead you to a place you do not want to go.  There are several traps the critical thinker can get themselves into.

First, is jumping to answers too quickly.  I used to be horrible at giving answers before I fully understood the question.  This made the person on the other side, usually my wife, frustrated.  Finding the answer to the wrong problem is still the wrong answer no matter how right it may be.  Much of this can be avoided if you fully understand the problem statement.  What are the issues behind the problem?  Who are the people asking and what interest do they have in the problem?  Getting a clear scope of the problem and all the issues and players will frame the issues and start you off on the right path in thinking critically.

The next pothole is not breaking down a large problem down into smaller pieces.  Staring at a huge problem can lead to fearful intimidation of the vast size of the issue.  Thus, it is also important many times to take a large problem and break this down into small pieces by asking focusing questions.  Evaluating past efforts and problems will help understand the possible causality of the present problem and other past problems and circumstances.   Looking at the problems from different points of view will also help to understand the problem and its impact on others.  The problem will look very different from the CEO view compared to the front-line teller.  Breaking all this down may help refine the problem’s scope and reveal some areas that immediate solutions may be applied.

Another pitfall is to refuse to expand the problem space.  This may have you solving a symptom instead of getting to the root problem.  I once met with a business client who accurately identified that the company was having problems financially.  Sales were down substantially.  But the owner only wanted the magic pill, the silver bullet to fix the problem immediately.  I began to drill down into the root cause by asking several layers of “why” questions.  Another thing that helped was to have the owner figure what they would do differently if they closed the business and started from scratch.  These helped the owner see problems in bidding, sales commission structure, and inventory buying present in the company.

The next roadblock is to focus on what is unimportant.  An Italian economist, Pareto, once stated that 80% of the results comes from 20% of the effort.  Hence, it is important to find the 20% and focus on that to get maximum results.  Years ago, I had an analyst who spent weeks trying to figure out what amounted to 2% of a construction budget, at a time, when the borrower had over 50% of the budget in liquidity.  We lost the deal because of a focus on the wrong 20%!  The question needs to be asked, “If I solve this will it move the needle?”

Another detour happens when you take analytical results at face value.  Failing to ask what the analysis means can lead you to incorrect answers.  It is also important to understand any relationship between this problem and others.  Years ago, on the farm, we had an electric fence that would not work.  Figuring that this was a problem with the wiring since a portion of the fence was cut, we proceeded to rewire hundreds of yards of fencing.  Hours later, we discovered we did not have to do all this work.  We only had to fix the one connection and then plug the fence in!

The final pitfall is to not think through future consequences of your answer.  This is like driving down the road without a map, compass, or road signs to make a trip from Texas to Indiana.  Solutions need to be thought through to what results of the actions and responses to those actions as well.  This is when we need to ask several “so what” questions to figure out what can happen when you put your answers in action. 

It can be easy for good critical thinking can go off the rails.  Using some discipline and being aware of these pitfalls can help make this a fruitful endeavor to getting our hands around problems and fixing them.

In other things, we are working on our lender education plans for 2019 and want to hear from you.  What sort of topics are you interested in learning to add to your toolbox for commercial or agricultural lending?  Reach out to us with your ideas.