Many years ago I had a most interesting discussion with a mathematician. I asked him how he managed to remember all those formulas and equations or look them up so fast. He laughed. He said if you truly understood the principles of mathematics, you never have to remember anything. If you need a formula or equation, you just figure out what it should be. He called that deriving an equation.
The same is true in business. So many business people get caught up with solutions offered in bestselling books. Or they think someone with many years of experience in their industry will have all the answers. It seems some people feel more comfortable implementing someone else’s solutions. Unfortunately, most of those solutions can’t be dropped into a company. They are dependent on a lot of complex variables all of which are rarely present in a specific organization.
But there is a bigger point here. We don’t need to go looking for solutions. We can figure them out for ourselves. We can derive solutions that are right for our organization. Critical thinking is more important than knowledge. You can gather all the knowledge on earth and still not be able to do anything with it. How do you know which parts of that knowledge to use and which to discard? How do you figure out how to apply that knowledge so it adds value? How do you apply that knowledge to a specific organization which may operate differently than other organizations in the same industry?
Behind Every Decision is a Thought
It’s all about thinking. You can trace back every business result to the thinking processes (or lack thereof) that lies behind all those decisions and actions. Everything we and all our employees do starts with some type of thought.
There is a foundation concept underlying every decision and action. These include unstated and sometimes unconscious assumptions, premises, beliefs or philosophies. If those aren’t right, the decision isn’t going to be right. On the other hand, help people to adopt the right foundation concepts and you get the whole team producing the results you want.
Our tendency is to focus on knowledge because it is specific, down to earth and easily accessible. If someone tells us a lot about our industry, we may “assume” they know enough to solve our problems. We equate industry knowledge with the ability to discover and implement solutions. These two worlds are galaxies apart.
Using all the available critical thinking processes, we can figure out what’s going on, what to do about it and how to implement it. If we need knowledge, we can find it or utilize the people in the organization who have it. From my experience, certain thinking processes stand out as the ones that produce the best results.
Ask the Questions No One Else Ask
Critical thinking starts with good questions. Instead of looking for answers, look for questions to ask. It is amazing what you can learn simply by asking people questions they have never heard before. It’s gets them thinking. And it helps them to vocalize buried thoughts and ideas. There is a gold mine of information and solutions waiting to be found in every organization. You just have to learn how to ask a lot of questions and be willing to question everything.
Cause and Effect Thinking
You have to identity what is causing a result to occur before you can change it. Otherwise you are just guessing. Implementing a solution just because it worked somewhere else without knowing what caused the problem is like rolling the dice. When and where is the problem occurring? When and where is it NOT occurring? Causally based decision making is the only way to make sustainable improvements. This is the foundation for problem solving.
Creativity takes many forms. You need to mix it with cause and effect thinking sometimes to discover the cause. You use it to come up with insightful questions. In other situations, you need to develop fresh ways to look at a situation. Sometimes, new ideas, new processes, new designs are needed. Creativity can open everyone up to seeing their current problems, situations, issues and challenges in different ways. Some solutions need a non-linear approach which is a form of creative thinking.
What If may be considered a form of creative thinking but it is actually a tool of systems thinking discussed later. It is the ability to see alternative ways of doing things as well as the potential effects of making a decision. So it wraps together many thinking processes. If you are changing the structure of a organization, a business process or launching a new marketing strategy, you need to consider all the ways these changes will affect every part of the organization. By doing a What If analysis, you can often discover untended consequences that need to be addressed. A good general counsel uses What If analysis to discover potential legal exposures.
Systems Thinking….Organic Thinking
Systems Thinking was defined by Ludwig von Bertalanffy and others in the 1950s. I first read about it from Physicist Fritjof Capra in his book The Tao of Physics. Everything is connected to everything. Each part has some type of interdependency with all the other parts. Change one thing and it affects everything else. A system is more than the sum of its parts. Holistic approaches are a form of systems thinking. The universe is a system. Atomic structure is a system. And so is a business.
For example, how a company’s sales entry computer program is written can have a dramatic impact on a customer’s decision to buy. I recently witnessed a national office supply retailer lose a sale because the cash register system had been programmed to only accept a special sales price with a limited quantity purchase. The customer was willing to pay full price for 5 times that quantity and walked out not buying anything because of this “programming” limitation. Beyond this all too common occurrence, there is probably an ill advised marketing or operations policy decision.
There are thousands of situations where a control system, computer program or administrative policy had a negative effect on sales and customer satisfaction. Then there were the marketing and customer contact approaches which unnecessarily added to cost. Or a major change was made to one function in a company which let to unintended consequences throughout the rest of the organization and its marketplace.
Every department, function and person in an organization affects results through many interdependent relationships. An organization needs to be managed as a system, not as a group of separate unrelated functions. An organization is a whole (holistic) system. It creates value for customers and shareholders because of the way all its people and parts interact with each other. You cannot isolate results to just one function or area because so many other aspects of the organization may be contributing to the result.
Systems Thinking is a way of mapping out all the interdependent relationships so that decisions are not made in a vacuum. It involves every type of thinking process but is much more than the sum of all of them combined. It is a way of understanding our world, our organizations, ourselves. I have started referring to this approach as Organic Thinking because it involves so much more.
Don’t Forget The Primary Purpose
All thinking processes are affected by goals. What you are trying to achieve can dramatically affect how you think about it. If an organization needs to find a way to increase its sales, imagine how different goals might alter thinking processes. Is the goal to increase sales overall or for a specific sales channel or product? Is the goal to increase market share? That would involve a lot more issues than a focus on sales alone. Or is the goal to create more customer and shareholder value through a sustained increase in market share? That incorporates the primary purpose of the organization into the more specific goal.
How goals are framed and how well everyone in the organization stays focused on the primary purpose will determine what people think about. Thinking processes need the right goals to produce the right results.
There are more types of specific thinking processes. Many of them fall under one of these. When everyone in an organization thinks better, the organization produces better results. Don’t limit that to management or key people. What an organization does is the sum total of all of its people’s thoughts.
Schedule a phone conversation with Don Shapiro, President of First Concepts Consultants, to answer your questions and explore how this discussion could help your organization.
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