Using Critical Thinking to Make Fully Informed Decisions

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This is the first blog, in a series, on applying critical thinking to information to make well-informed and sound decisions. The blogs, and white paper, are the result of a collaboration between SAP and published authors, and professors of Critical Thinking, Dr. Sharon Baillin and Dr. Mark Battersby. Subscribe to www.sap.com/BINews to read the subsequent blogs on this topic.

Using Critical Thinking to Make Fully Informed Decisions

Business Intelligence and Data Driven Decision Making are both efforts to utilize software and “big data” for making better business decisions. But they are also examples of what every CEO says they want from their employees—critical thinking. The ability to think critically is central to making well informed, sound decisions in business and in life. On the other hand, a failure to think critically can lead to bad decisions and judgments. 

As an illustration, consider the horrifying story of the critical illness of a three year old child, Mathew Lacek, an illness which could have easily been prevented if the parents had been willing and able to critically evaluate popular but unfounded claims about the dangers of vaccination. You can read about this story in our White Paper .

Our goal in this blog post and those which follow is to introduce some best practices which emerge from the research and literature on critical thinking and show how they apply to making better decisions.

Making Fully Informed Decisions: A Five Step Approach

We have broken the process into five steps, but of course these are often used iteratively as new information leads back to new questions etc.

The Key Questions

1. What is the question?

With any decision, whether it is deciding where to go on a vacation or how to market a product, the first step is to get clear on what the question is.  Are we looking for a restful time away or a new adventure?  Are we thinking of entering a new product field or improving an existing product? The basic idea is to figure out the question and relevant alternatives before you do the research and collect the data. 

2. What do we need to know?

What information and data are relevant in order to answer the question? If your question relates to the effectiveness of your internet ads, then you need to collect data not simply on the number of click-throughs, but on the number of click-throughs that result in actual sales.  It’s also important to take into account other relevant considerations, e.g., ethics, the business environment, the social context. For example, in the case of a vacation decision, we might want to take into account safety or our comfort visiting countries that have high rates of poverty.

3. How good is the information?

To what extent can we rely on the data as guide? Data that looks hard and reliable may not be all that hard (the GDP, for example, is subject to constant revision  -- the margin of error on an initial quarterly GDP estimate is +/- 4.3 percent). In addition, the reliability of data is always a concern. Marketing surveys, for example, have an extremely high rate of respondents refusing to answer, inevitably making for a biased sample, and they can also easily be skewed by biased questions. Big data can address some of these problems, but even it must be used with critical awareness of  its limitations.

Even if the data is reliable, we must also ask the crucial question: can we generalize from it? To whom?  For how long? We need to examine the data in its historical context and understand the factors that underlie the data before assuming it provides a basis for generalizing to the future, to other markets or circumstances, or to those not surveyed. We need to be sure we are distinguishing between mere correlation and real causal relationships.

4.What have we ignored?

We may have good data that our vacation choice is a great resort, or that we are looking at a great market opportunity. But we need to ask ourselves whether there are other choices that we have not considered or counter evidence that we haven’t taken into account. What are the pros and cons of this option compared with the alternatives? Don’t just look for data that confirms what you already believe.

5.What should we do?

Use your reflective intuition. Having done due diligence, now is the time to weigh the alternatives. You can avoid “analysis paralysis” by going with what seems right now, all things considered, and making sure that you can justify the decision in light of your data and other considerations.

About the Authors:

Mark Battersby holds a doctorate in philosophy from the University of British Columbia and is currently a professor of philosophy at Capilano University. He has also taught critical thinking at the University of British Columbia, Simon Fraser University and Stanford University. Battersby is the founder of the British Columbia Association for Critical Thinking Research and Instruction. He also led a provincial curriculum focusing on learning outcomes in higher education. He is the author of Is That a Fact (Broadview 2009), and, along with Sharon Bailin, Reason in the Balance: An Inquiry Approach to Critical Thinking (McGraw-Hill Ryerson 2010).

Sharon Bailin is Professor Emeritus in the Faculty of Education, Simon Fraser University. She is the author of Achieving Extraordinary Ends: An Essay on Creativity, and, along with Mark Battersby, Reason in the Balance: An Inquiry Approach to Critical Thinking (McGraw-Hill Ryerson 2010), as well as numerous academic articles. Bailin currently directs a Masters Program for educators focused on critical thinking and is also a part of a major curriculum initiative to develop critical thinking for schools in Canada and internationally (TC2).  She is a Past President of the Philosophy of Education Society and of the Association for Informal Logic and Critical Thinking.