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About this book

This book discusses critical thinking as a tool for more compassionate leadership, presenting tried and tested methods for managing disagreement, for anticipating and solving problems, and for enhancing empathy. Employing a lighter tone of voice than most management books, it also shows how and when less-than-rational mechanisms such as intuition and heuristics may be efficient decision-making tools in any manager’s toolbox.

Critical thinking is useful for analyzing incoming information in the context of decision-making and is crucial for structuring outgoing information in the context of persuasion. When trying to convince a client to buy a service, an executive board to fund a project, or a colleague to change a procedure, managers can use the simple step-by-step guides provided here to prepare for successful meetings and effective pitches.

Managerial thinking can be steadily improved, using a structured process, especially if we learn to think about our thinking. This book guides current and would-be managers through this process of improving and metathinking, in connection with decision-making and persuasion. Using examples from business, together with research insights from Behavioral Economics and from Management and Organizational Cognition, the author illustrates common pitfalls like hidden assumptions and cognitive biases, and provides easy-to-use solutions for testing hypotheses and resolving dilemmas.

Table of Contents

Frontmatter

Overview

Frontmatter

Chapter 1. Introduction

Abstract
We all know how to think, just as we all know how to run. However, if, you want to finish a marathon rather than merely catching the bus, there is a structured way to upgrade many aspects of your running: the pace you run at, the way your foot touches the ground, the way you breathe, the frequency of your training sessions, and even the way you dress. All these aspects can be improved for better results. Similarly, the way a manager thinks can benefit from a structured upgrading process.
Radu Atanasiu

Chapter 2. Who Needs Critical Thinking?

Abstract
Critical thinking is on everybody’s lips. Employers think it is one of the most important skills employees should have (The World Economic Forum. (2016). The Future of Jobs. https://​reports.​weforum.​org/​future-of-jobs-2016/​), schools increasingly include it in their curricula, and self-actualizing people read books such as this one or attend online courses about it. But what is it? And what is it not?
Radu Atanasiu

Critical Thinking in Business Decision-Making

Frontmatter

Chapter 3. Hidden Assumptions

Abstract
False assumptions are the main cause of projects that fail. The problem is not that we cannot assess the assumptions as false, but that we do not even realize we make them. When presented with clearly articulated assumptions, managers are usually perfectly able to validate or reject them; the problem is that incorrect assumptions are hidden and usually pass unnoticed. A real-life example is the following: The decision, in an entrepreneurial company, to incentivize salespersons exclusively by commission (percentage of sales) led to sales agents working hard for only 3 weeks each month, until they reached a comfortable, self-set threshold income. The underlying (false) assumption that went unnoticed and unchallenged was that “a potentially unlimited income will motivate salespersons to maximize their effort.” This chapter will discuss methods for identifying hidden, unvoiced assumptions behind business plans.
Radu Atanasiu

Chapter 4. Test Your Business Assumptions

Abstract
The last chapter helped us identify (and write down) hidden assumptions in our business plans. What then? What should we do with them? When written down, some assumptions are easy to evaluate (whether they are wrong or not) by a manager with some experience and common sense. Most assumptions, however, need to be tested.
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Chapter 5. Reason, Emotions, Intuition

Abstract
There is a growing scientific literature on the role of managerial intuition in decisions: The core finding is that intuition functions best with experience. After years of knowing their industry, managers come to recognize patterns and cues that click into place. Moreover, experienced managers can simplify their decisions by knowing what criteria to ignore in their consideration. This chapter synthesizes this growing knowledge by showing managers the benefits and limits of relying on their intuition.
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Chapter 6. Cognitive Biases

Abstract
Studies have shown that we make only (roughly) half of our decisions based on reason. The rest are based on habit, emotion, imitating others, tradition, environment, plus a special kind of pirate software in our operating system called cognitive biases. Without us knowing, cognitive biases trick us into behaving irrationally, for instance, by working twice as hard to avoid a loss than to secure a gain of the same amount or by continuing a failing project just because of all we have invested in it so far. This chapter explores the origin of cognitive biases and analyzes a select set that is often encountered in business. By reading about cognitive biases, their mechanism, examples, and ways to counteract, readers will be immunized and less likely to fall into these traps. This chapter also shows how cognitive biases are employed in marketing campaigns.
Radu Atanasiu

Chapter 7. Decisions, Decisions, Decisions

Abstract
Herbert Simon, the father of the decision-making discipline, wrote that “the work of managers (…) is largely work of making decisions” (Simon, Academy of Management Perspectives 1:57–64, 1987). One would say, then, that management science should have a clear idea of how managers decide, individually and in groups. Decision-making is classically understood as a logical process that goes through analyzing the situation, generating alternatives, evaluating the possible outcome and consequences of these alternatives in light of the objectives, and choosing the best solution.
Radu Atanasiu

Chapter 8. Decision-Making in Groups

Abstract
It is said that two heads are better than one, meaning that a group thinks better and makes wiser decisions than each member taken individually. For instance, the wisdom of the crowd phenomenon describes how large crowds can estimate something (the weight of an ox, in the most famous example) astonishingly close to reality, as revealed by averaging all individual responses. Boards and juries are examples of groups especially assembled for making decisions. Many organizations have understood the power of collective decisions. Group decisions have the capacity to generate commitment, motivation, and individual responsibility. However, in many companies, group decisions are difficult to make and sometimes even harder to implement. Why might that be? It is perhaps because in business, two heads are better than one only if there is a well-established group decision-making system in place. This chapter emphasizes the importance of clear assignment of roles and of delegating, discusses pitfalls in group decision-making, and ends by offering tools for collective decisions when the team works remotely.
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Chapter 9. Problem Solving

Abstract
Articulating (and writing things down) is a valuable critical thinking tool. This chapter details its use in problem solving. Among other aspects, we will discuss how to clearly define (and write down) the problem, how to discover (pen in hand) its root cause, how to set (on paper) a clear objective for our problem-solving effort, how to gather (and write) a good set of alternative solutions, how to establish (and write) clear criteria, and how to select (and document) a course of action.
Radu Atanasiu

Critical Thinking in Persuasion

Frontmatter

Chapter 10. One-on-One Persuasion

Abstract
When trying to convince a client to buy your service, the boss to fund your project, or a peer to change a procedure, most people rely on a false assumption: if we ourselves are convinced of something, then we can easily convince others. We therefore rarely prepare for such a meeting and often fail to achieve our goal. This chapter provides a step-by-step recipe for preparing for a persuasion effort, recipe that includes, among others, crucial steps such as getting the other to care, identifying pro arguments customized for the other, and—most importantly—finding out beforehand why they might say no (a kind of persuasion premortem).
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Chapter 11. Debating

Abstract
This chapter focuses on situations when we disagree with the other(s) and we need to convince them to abandon their point of view and to adopt ours. In our professional lives, we often need to discuss things with people who do not share our point of view: a supplier who interprets a provision of the contract in their favor, a client who has unreasonable expectations, a colleague who did a poor job, or even the boss who thinks that things need to be done his way. We need to persuade them into understanding and adopting our point of view. This kind of informal debate is the topic of this unit. Preparing for a debate is quite similar to preparing to persuade verbally or in writing, the principles are similar. Some aspects should be emphasized, though: in a debate, you must take extra care to think of all possible counterarguments, of clever ways to bring them up yourself, and of smart ways to rebut them.
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Chapter 12. Fallacies

Abstract
Fallacies are bad arguments that seem good and can therefore trick us. After a critical thinking course, students usually remember the fallacies. Could it be the pompous, Latin names? Could it be the anecdote-like structure and the fun they had during class exercises? Could it be that everybody has numerous examples for each and every fallacy? Perhaps it is that after the course they start encountering and recognizing fallacies everywhere they look? Fallacies can be spotted anywhere, from political discourse to advertising, from the office to the kitchen table. This chapter goes through a list of fallacies we may encounter both in business and in our day-to-day lives, with examples, a description of their mechanisms, and advice on ways to counteract them.
Radu Atanasiu

Chapter 13. Ten Fair-Play Principles in Argumentation

Abstract
What is the purpose of argumentation? To win? Clearly, winning or losing an argument usually has consequences. These consequences can be less important, such as you having to do a small task that should have been done by your teammate, or very important, like your innocent client spending time in prison, if you are a bad lawyer. Whatever the case, the ultimate purpose of a dispute should be the truth and finding the best solution. Not winning. In an ideal world, all disputes would be conducted in a spirit of fair play. In a fair-play conversation, each participant enters with the willingness to convince the other, while allowing the possibility to be convinced herself. If people kept that in mind, the world would be a better place: a little dry, but better. However, in this less-than-ideal but fascinating world we live in, discussions often take wrong turns, so I have put together 10 fair-play rules to be remembered and hopefully followed in debates.
Radu Atanasiu

Chapter 14. The Courage to Change Our Mind

Abstract
We don’t like to change our minds, and this often leads to costly outcomes, both for our businesses and for ourselves. This chapter goes through 12 psychological mechanisms that keep us prisoners of wrong beliefs, each with business-case examples and mechanisms to counteract. We will see how the Dunning–Kruger effect makes less-skilled managers believe that they are better skilled and how cognitive dissonance makes people in the taxi industry think that ridesharing is successful because it is illegal.
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Chapter 15. Wrap Up

Abstract
This is a book about thinking. Having a structured, rational approach to decision-making and persuasion yields better outcomes. However, throughout this book, we have discussed the limits of thinking and the many ways in which our thinking can be misleading. On the other hand, we saw that less-than-rational adaptive mechanisms such as intuition and heuristics, although they may occasionally lead to error, are usually efficient tools in any manager’s toolbox.
Radu Atanasiu
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