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Why your business needs critical thinking.

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Cultivating critical thinking skills should be a top priority for any business that wants to succeed in today’s complex and rapidly changing world.

According to the World Economic Forum, “analytical thinking, creativity, and flexibility will be among the most sought-after skills” by 2025, yet few companies invest in such training.

Critical thinking is an essential skill that enables individuals to analyze, evaluate, and synthesize information to make informed decisions. In today's fast-paced, complex, and dynamic work environment, critical thinking is more critical than ever before. It is crucial for organizations to prioritize critical thinking skills among their employees to make well-informed decisions and stay ahead in the competitive market.

Critical thinking skills are needed in every business today.

Rapid technological advancements, globalization, and economic uncertainties have created complex challenges for most businesses. Critical thinking skills are essential to successfully navigating this complexity and uncertainty. Critical thinkers can examine challenges and opportunities three-dimensionally in the broader business context, and they can analyze relevant information to develop a plan of action to address it. Critical thinking enables employees to consider multiple perspectives and potential outcomes of different decisions, leading to better choices that are more likely to succeed.

The ability to evaluate information, data, and facts is important in making informed decisions. Employees who lack basic critical thinking skills may be prone to making decisions based on assumptions, biases, or incomplete information. That often leads to poor decisions. On the other hand, employees who possess critical thinking skills are better equipped to weigh options, analyze the pros and cons of each decision, and make decisions based on factual and reliable information. Such decisions can lead to better outcomes for the organization, resulting in improved productivity, increased revenue, and better customer satisfaction.

In addition to decision making, critical thinking is also essential to problem solving – a key capability for leaders every level.

In the workplace, issues can arise at any time, and managers must be able to identify, analyze and address these problems quickly and efficiently. Critical thinking skills can help leaders identify the root cause of the problem and evaluate different options to solve it. This process can lead to innovative and effective solutions to complex problems that may have otherwise been overlooked or dismissed.

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Finally, critical thinking is vital for effective communication in the workplace.

Employees who can analyze and evaluate information can communicate it effectively to their colleagues and superiors. Critical thinking skills enable employees to articulate their ideas, share their opinions, and offer constructive feedback, leading to improved collaboration and team productivity. Employees who lack critical thinking skills may struggle to communicate their thoughts effectively, leading to misunderstandings, miscommunication, and conflicts.

Businesses of every size must prioritize the development of these skills among their employees to enable them to make informed decisions, solve complex problems, and communicate effectively.

The cultivation of critical thinking skills in the workplace requires investment in training and development programs that equip employees with the necessary tools and techniques to analyze and evaluate information effectively. But the result will be a more efficient, innovative, and productive workforce that can navigate complex challenges and drive success for the organization.

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Why Critical Thinking Matters in Your Business

Critical thinking should become a second-nature skill for leaders and employees across your organization.

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Using critical thinking skills in business can guide your organization toward success. To make the most beneficial decisions for your business, it’s crucial to develop and teach critical thinking skills to those involved in the day-to-day of your brand. Here’s how critical thinking skills matter in business — and how to teach them to employees to improve decision-making and problem-solving. 

What is critical thinking?

Jen Lawrence, co-author of Engage the Fox: A Business Fable About Thinking Critically and Motivating Your Team, defines critical thinking as “the ability to solve problems effectively by systematically gathering information about an issue, generating further ideas involving a variety of perspectives, evaluating the information using logic, and making sure everyone involved is on board.”

This is a complex definition for a challenging concept. Though critical thinking might seem as straightforward as stepping back and using a formal thinking process instead of reacting instinctively to conflicts or problems, it is actually a much more challenging task.

Critical thinking’s ultimate goal is ensuring you have the best answer to a problem with maximum buy-in from all parties involved – an outcome that will ultimately save your business time, money and stress.

Why is critical thinking essential in business?

A World Economic Forum report revealed that critical thinking is one of the most in-demand career skills employers seek when trying to attract and retain the best employees – and employers believe critical thinking skills will become even more necessary in the coming years. 

Critical thinking in business guarantees objective and efficient problem-solving, ultimately reducing costly errors and ensuring that your organization’s resources are used wisely. Team members employing critical thinking can connect ideas, spot errors and inconsistencies, and make the best decisions most often. 

Employees with critical thinking are also more likely to accomplish the following:

• Analyzing information
• Thinking outside the box
• Coming up with creative solutions to sudden problems
• Devising thought-through, systematic plans
• Requiring less supervision

What are critical thinking skills?

Critical thinking is a soft skill that comprises multiple interpersonal and analytical abilities and attributes. Here are some essential critical thinking skills that can support workforce success.

• Observation : Employees with critical thinking can easily sense and identify an existing problem – and even predict potential issues – based on their experience and sharp perception. They’re willing to embrace multiple points of view and look at the big picture. 
• Analytical thinking : Analytical thinkers collect data from multiple sources, reject bias, and ask thoughtful questions. When approaching a problem, they gather and double-check facts, assess independent research, and sift through information to determine what’s accurate and what can help resolve the problem. 
• Open-mindedness : Employees who demonstrate critical thinking are open-minded – not afraid to consider opinions and information that differ from their beliefs and assumptions. They listen to colleagues; they can let go of personal biases and recognize that a problem’s solution can come from unexpected sources. 
• Problem-solving attitude : Critical thinkers possess a positive attitude toward problem-solving and look for optimal solutions to issues they’ve identified and analyzed. They are usually proactive and willing to offer suggestions based on all the information they receive. [Related article: How to Develop a Positive Attitude in the Workplace ]
• Communication : When managers make a decision, they must share it with the rest of the team and other stakeholders. Critical thinkers demonstrate excellent communication skills and can provide supporting arguments and evidence that substantiate the decision to ensure the entire team is on the same page. 

What are the benefits of critical thinking in business?

Many businesses operate at a frantic tempo that reinforces hasty thinking and rushed business decisions, resulting in costly mistakes and blunders. When employees are trained in critical thinking, they learn to slow the pace and gather crucial information before making decisions that might impact the organization. 

Along with reducing costly errors, critical thinking in business brings the following benefits: 

• Critical thinking improves communication . When employees think more clearly and aren’t swayed by emotion, they communicate better. “If you can think more clearly and better articulate your positions, you can better engage in discussions and make a much more meaningful contribution in your job,” said David Welton, managing partner at Grove Critical Thinking.
• Critical thinking boosts emotional intelligence . It might seem counterintuitive to associate analytical rationality with emotional intelligence . However, team members who possess critical thinking skills are less prone to rash, emotion-driven decisions. Instead, they take time to analyze the situation and make the most informed decision while being mindful and respectful of the emotional and ethical implications. 
• Critical thinking encourages creativity . Critical thinkers are open to new ideas and perspectives and accumulate a significant amount of information when facing decisions. Because of this, they’re more likely to come up with creative solutions . They are also curious and don’t shy away from asking open-ended questions. 
• Critical thinking saves time and money . By encouraging critical thinking in the workplace, you minimize the need for supervision, catch potential problems early, promote independence and initiative, and free managers to focus on other duties. All this helps your company save valuable time and resources. 

How do you teach critical thinking in business?

Experts agree that critical thinking is a teachable skill. Both Lawrence and Welton recommend exploring critical thinking training programs and methods to improve your workplace’s critical thinking proficiency. Here’s a breakdown of how to teach critical thinking in the workplace: 

• Identify problem areas . Executives and managers should assess workplace areas most lacking in critical thinking. If mistakes are consistently made, determine whether the issue is a lack of critical thinking or an inherent issue with a team or process. After identifying areas that lack critical thinking, research the type of training best suited to your organization. 
• Start small . Employees newly embracing critical thinking might have trouble tackling large issues immediately. Instead, present them with smaller challenges. “Start practicing critical thinking as a skill with smaller problems as examples, and then work your way up to larger problems,” Lawrence said.
• Act preemptively . Teaching and implementing critical thinking training and methodology takes time and patience. Lawrence emphasized that critical thinking skills are best acquired during a time of calm. It might feel urgent to seek critical thinking during a crisis, but critical thinking is a challenging skill to learn amid panic and stress. Critical thinking training is best done preemptively so that when a crisis hits, employees will be prepared and critical thinking will come naturally.
• Allow sufficient time . From a managerial perspective, giving employees extra time on projects or problems might feel stressful in the middle of deadlines and executive pressures. But if you want those working for you to engage in critical thinking processes, it’s imperative to give them ample time. Allowing employees sufficient time to work through their critical thinking process can save the company time and money in the long run.

How do you identify successful critical thinking?

Successful critical thinking happens during a crisis, not after.

Lawrence provided an example involving restaurants and waitstaff: If a customer has a bad experience at a restaurant, a server using critical thinking skills will be more likely to figure out a solution to save the interaction, such as offering a free appetizer or discount. “This can save the hard-earned customer relationship you spent a lot of marketing dollars to create,” Lawrence said. This concept is applicable across many business and organizational structures. 

You should also be aware of signs of a lack of critical thinking. Lawrence pointed out that companies that change strategy rapidly, moving from one thing to the next, are likely not engaging in critical thinking. This is also the case at companies that seem to have good ideas but have trouble executing them.

As with many issues in business, company leadership determines how the rest of the organization acts. If leaders have excellent ideas but don’t follow critical thinking processes, their team will not buy into those ideas, and the company will suffer. This is why critical thinking skills often accompany positive communication skills.

“Critical thinking doesn’t just help you arrive at the best answer, but at a solution most people embrace,” Lawrence said. Modeling critical thinking at the top will help the skill trickle down to the rest of the organization, no matter your company’s type or size.

Critical thinking is the key to your business success

When critical thinking is actively implemented in an organization, mistakes are minimized, and operations run more seamlessly. With training, time and patience, critical thinking can become a second-nature skill for employees at all levels of experience and seniority. The money, time and conflict you’ll save in the long run are worth the extra effort of implementing critical thinking in your workplace.

Sammi Caramela and Rebecka Green contributed to this article. Source interviews were conducted for a previous version of this article.

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Improve Your Critical Thinking at Work

Helen Lee Bouygues, founder of the Reboot Foundation, believes that a lack of critical thinking is responsible for many business failures. She says organizational leaders often...

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Helen Lee Bouygues, founder of the Reboot Foundation, believes that a lack of critical thinking is responsible for many business failures. She says organizational leaders often rely too heavily on expertise and then jump to conclusions. Instead, leaders should deliberately approach each problem and devote time thinking through possible solutions. The good news, she says, is that critical thinking skills can developed and practiced over time. Bouygues is the author of the HBR.org article “ 3 Simple Habits to Improve Your Critical Thinking .”

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CURT NICKISCH: Welcome to the HBR IdeaCast from Harvard Business Review. I’m Curt Nickisch.

You know the story. Maybe it’s even a nightmare of yours. One day, the company is flying high. No reason to change anything. Customers and contracts will always be there.

And then one day – the money stops flowing in, and the business is suddenly in real trouble.

Our guest today knows this all too well. She has been an interim CEO, CFO, or COO at more than one dozen companies. Sometimes they needed her because they were mismanaged. Some failed to stay in front of changing technologies. In a few cases, members of the senior team were simply negligent. But in her experience, all these organizational problems shared one root cause: A lack of critical thinking.

Our guest is Helen Lee Bouygues. She’s the founder of the Reboot Foundation. Based in Paris, the nonprofit helps parents, teachers and employers think more critically about their problems. She’s also the author of the HBR.org article “ 3 Simple Habits to Improve Your Critical Thinking .” Helen, thanks for being here.

HELEN LEE BOUYGUES: Thank you for having me Curt.

CURT NICKISCH: Helen, you worked in transitional periods for a bunch of big companies. And, you say that many people’s business problems really come down to simple errors in critical thinking. That just sounds a little surprising to me and I wanted to hear why you say that.

HELEN LEE BOUYGUES: Yeah, I think at first glance people believe that critical thinking is something that we do every day and it comes very natural. But in reality, critical thinking is not only extremely important for success in life, but it’s also something that needs to be learned and practiced.

Critical thinking skills are very much predictive of making positive financial decisions, even more so than raw intelligence, but people kind of forget what that actually means in terms of tools and practices that they need to exercise in order to make the right decisions, or at least the better decisions.

Based on my 20 years of different turnaround and transformation experience, I have noticed that very often when things go sideways or create problems and companies find themselves in a situation of a need for turnaround, it’s typically been because I would argue that the leadership perhaps lacked some elements of critical thinking.

CURT NICKISCH: Why do you think we lack critical thinking skills, or why do you think we think we’re better at it than we actually are?

HELEN LEE BOUYGUES: That’s a great question Curt and actually we did a survey at the Reboot Foundation about a year ago, where we asked people questions of everything from ranging from how often do they practice critical thinking to how important they think critical thinking is, and how often they teach their children critical thinking?

I think one of the reasons why it’s more difficult in today’s day and age is that we live in a world of incessant distraction and technology is often to blame as well. We live in a period when we have a question, we want that instant gratification getting the information, just typing the question on Google, having the answer quickly and so, we don’t actually have as much time to stop and think.

And part of the necessity of critical thinking is having that ability to take a step back and actually think about your own thinking. And yet, it’s actually becoming more and more critical because as businesses evolve and there’s more urgency to make decisions, that’s exactly when we need to do more critical thinking than perhaps we used to, because of evolving technology and rapidly changing competitive environments in business.

CURT NICKISCH: You say that getting better at critical thinking is something we can learn and cultivate?

HELEN LEE BOUYGUES: Yes. The opposite of critical thinking could be selective thinking. And naturally selective thinking is something that you can actually do relatively quickly because it’s just a reinforcement of your own opinion. People in business can get better at critical thinking if they just do three things. One, question assumptions. Two, reason through logic. And three, diversify thought.

CURT NICKISCH: How do you actually do that?

HELEN LEE BOUYGUES: So, the taking a break, and that doesn’t mean doing meditation or yoga, but actually taking the time. It could be going for a run, or a walk around the block. That alone creates that opportunity for an individual to take the time to stop and think. So, that’s one dimension I think that people need to put in their normal practice.

The second element that you wouldn’t necessarily think about in terms of an attribute necessary for critical thinking is management of emotions. So, the number of times that you can imagine, especially in a boardroom for a company that’s going through a difficulty, heated discussions, insults across the room. In that type of environment, it’s very difficult to engage in rational thinking.

As much emotions are important, when it comes to true important decisions, we need to put aside the feelings and emotions that go awry in a meeting setting. In addition to that, I think the other element of what we need to make sure that we conduct is making sure that we have other points of views.

CURT NICKISCH: When you talk about looking at things from opposing viewpoints, sometimes that’s helpful when you have somebody who plays that role, or when you have a diverse team that you can share ideas with and explore. I don’t know that all of us are as good of just thinking from other perspectives when we’re kind of just in our own thoughts.

HELEN LEE BOUYGUES: Yeah, but it’s again, that’s why I think I started off this conversation Curt, in saying that critical thinking is something that you actually need to practice and you need to learn. Because indeed, it’s natural and it’s very human to stay in your own personal bubble because it’s comfortable.

But you can actually do this from a small scale to a larger scale, and what I mean by that specifically is if you’re starting small, if you work in for example, in accounting. Go have lunch with people in marketing in your organization.

I have a good friend, Mathilde Thomas, she’s actually the founder of Caudalie which is a very successful line of skincare products made from grapes. Mathilde grew up spending her time in her family vineyards, so her family originally was in the wine business. And the idea of the skincare product came about because one day a friend of the family, this physician, came to visit the vineyard and he was looking at the vat of grape skins that were about to be discarded and he said, well that’s a pot of treasure, so why are you just discarding that away? And that’s effectively how the business of Caudalie actually began.

So, that’s a positive story where people who are not necessarily in the same field can get together and actually come up with innovation or here it wasn’t even intended to be an innovation. It just was an idea that sprung from two people from different walks of life getting together and coming up with the business idea. So, that’s a positive example in terms of diversity.

CURT NICKISCH: Where have you seen this failure in some of the companies that you worked with? Where have you seen the inability to diversify thought and opinions and host costly that can be?

HELEN LEE BOUYGUES: I think in terms of negative, I’ve seen a specific example for a pharmaceutical company where the founder brought in a CFO who actually had very little experience in accounting. He had experience in mergers and acquisitions, in elements of financing, but not pure accounting.

But his true qualification of becoming the CFO was the fact that he was a very, very good friend of the CEO’s and you see that example over and over again, including in boards. The number of times you see the board of a company being surrounded, the CEO being surrounded by his or her friends, which is why often I think from time to time, you have companies, publicly listed companies where sometimes the board may not see certain indications.

Be it the case of a Steinhoff or an Enron, which is an extreme case of fraud, but even in terms of general decisions, strategic decisions, that if you have a board composed of just a group of friends of the CEO’s, you don’t have diversity of thought in that type of environment.

CURT NICKISCH: So, we’ve talked some about questioning assumptions and the power of diversifying thought. But another point you make is that people need to get better about reasoning through logic. And I think this is going to surprise people too because logical is just such a household word. We think that we think logically, so why is logic a deficit and kind of a prerequisite for the critical thinking you think we need to see more of in management?

HELEN LEE BOUYGUES: So, one of the stories that I like to bring up is a specific company that I encountered a couple of years ago. It’s one of the world’s largest producers of aluminum tubes and they have clients ranging from L’Oréal to Proctor and Gamble, all over the world.

And the CEO of this company was blindsided by his own fervor and probably unreasonable optimism about the outlook for the revenue profile of this company. In reality, the company was in relatively dire financial straits, but again he was blinded with his hope that his clients would never leave because the switching costs of his clients would be too high, or that at least was his hypothesis.

And for some business leaders I think some optimism is obviously a good thing. There wouldn’t be Ubers or EBays if we didn’t have entrepreneurs who have that charisma and exuberance. But what I often find in companies is CEOss with something I call simply WTF. Now Curt, that’s not what you think that we commonly use in text messages, but it’s for me it’s “wishful thinking forever’.

And I think that blinded optimism can often mask the capability and the ability to reason through logic and actually re-question your approach and saying, “well, can my customers decide to change vendors? Is the competitive environment actually shifting? Are there low-cost companies that could actually take over my business even if that hurdle rate is high?”

So, it’s again coming back to being able to ask the right questions and looking at your business and saying, “is there a different way of doing things?” And that’s when you avoid the pitfalls of actually reasoning through logic.

And it comes back to the argument of having different views from your original views and your original sentiments. And obviously in order to do that, we need to really pay close attention to our own chain of logic.

CURT NICKISCH: Which I like by the way, wishful thinking forever. I’m going to read text messages that way now. Probably make them a little more optimistic. Yeah.

A lot of companies pay consultants to do this kind of critical thinking for them and they come in with tools and concept mapping, and all of the sorts of things that maybe they’re a little more deliberate about and also, removed from the emotion of working in the culture of a company. Do you see consultants as essentially paid critical thinkers?

HELEN LEE BOUYGUES: I think many consultants are good at critical thinking. I don’t believe that the industry of management consulting is a sector that is there to enforce critical thinking for companies. And let me explain why I believe that. A lot of, in a lot of situations CEOs seek validation and look for evidence that supports their preconceived notions. And consultants are often trained to agree with their client’s theories.

So, I would almost counter argue and say, for CEOs to effectively use consultants, they almost need to be very precise and be very upfront in their scope of work with the consultants, demand and ask that the consulting firm give a different point of view, or an opposing point of view than the original thesis of a leader.

Now that is sometimes hard to do. It goes back to the original part of our discussion. It’s less comfortable for leaders and in a lot of situations why CEO’s are hiring consultants are to justify and explain with more detail to their boards of why they’re doing certain strategic activities. So, that’s where we have to be careful about relying on consultants as quote, “a mechanism to do better critical thinking in business”.

CURT NICKISCH: Have you actually seen companies turn around when they change the way they approach problems and instituted critical thinking across the organization in a more deliberate way?

HELEN LEE BOUYGUES: Yes. I worked with a telecom company in Africa, not so long ago. And they had probably the lowest customer satisfaction rate across the board, amongst the different countries in Africa. And the CEO was somebody who was a very open minded, wanted to challenge – now you could argue Curt, they were on the low, they couldn’t get lower in terms of customer satisfaction, so they only had room to go up.

But if you put that aside, what he instituted was to have a sub group of his team to go visit another South African country that had very high customer satisfaction rates. So, it was, I would call creating an environment for its employees to have a bit of a diversity of thought, but also to actually be exposed to give the capacity for its employees to question the assumptions about what they were doing wrong.

So, very good CEOs not only are capable of trying to conduct metacognition for him or herself, meaning questioning his or her own way of thinking, but he’ll challenge his team and help them to challenge their own way of thinking by showing different examples of for example, success stories in the same type of work where in a case of this telecom company in Africa, where they could see and visit customer services centers in other African countries where they had high customer satisfaction rate.

So, it’s giving the exposure to its team to seek out diversity of thought, but also promoting that, and encouraging that its employees think differently than being focused on their own silos of work and being, trying to be efficient in their own capacity, in their existing dimension.

CURT NICKISCH: Yeah. So, if that was a good critical thinker, as a CEO, what do most leaders do in that situation? What does the “uncritical thinker” do?

HELEN LEE BOUYGUES: The uncritical thinker would be to try to gain more efficiency out of its existing employees and continue to do more of the same thing. But probably putting in more KPI’s. That’s a popular thing that leaders do. And try to put more pressure in the system so that companies are more productive. Rather than thinking out of the box and trying to say, should we be doing something differently than the way we’re doing it today?

CURT NICKISCH: And for individuals? Because whether or not you have a CEO who’s good at this, you can still affect your own team and you can still affect your own work with your own critical thinking. What should they do to get better at critical thinking?

HELEN LEE BOUYGUES: Be curious. Ask the questions. “ What if” questions are great. It’s important to constantly challenge yourself saying, what if I did something differently than the way I’m doing it now? What if I approached my client differently than the way I’m doing it now? What if I changed the processes? Would there be improvement? That’s the type of individual who can improve by actually questioning the assumptions of what he or she is doing on a daily basis.

And then the second element again, is trying to be very factual and be rigid about gathering facts and proof and accumulating data in order to truly justify why you’re doing what you’re doing. It’s going back to paying close attention to the chain of your own logic.

And then the third is expanding your horizon by interacting with people that are not in your existing silo. So, I go back to the example, very simple example, go have lunch, go have a drink with somebody that’s not in your same department, but go reach out to somebody who’s in a totally different building, or even different division within your group.

CURT NICKISCH: Helen, thanks for coming on the show and talking about thinking through how to be a better critical thinker.

HELEN LEE BOUYGUES: Thank you so much. It was a real pleasure to be on your show.

CURT NICKISCH: That’s Helen Lee Bouygues. She’s the founder of the Paris-based Reboot Foundation and the author of the HBR.org article “ 3 Simple Habits to Improve Your Critical Thinking .”

This episode was produced by Mary Dooe. We get technical help from Rob Eckhardt. Adam Buchholz is our audio product manager.

Thanks for listening to the HBR IdeaCast . I’m Curt Nickisch.

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