Every single day, entrepreneurs are forced to make countless choices, each of which can have a major impact on the success of their companies. The business leaders which generate the most success are the ones that have the tools they need in order to make the right decisions. Most frequently, they’re also the ones who have best perfected the art of critical thinking.

The definition of critical thinking is the study of clear and unclear thinking. In today’s fast-changing and highly competitive business environment, the risks of poor decisions are greater than ever. Leaders have to make decisions about their organization’s strategic direction, competitive positioning and proper allocation of resources. In most cases, leaders cannot rely on what has worked in the past, as the business challenges they are facing are new and ever-changing.

What is Critical Thinking?
Critical thinking is a process for evaluating decisions. It’s based on making informed choices by analyzing a wide range of available data and then assessing the various aspects and consequences of each scenario. We use critical thinking in our everyday lives, from making life-altering choices such as which job offer to take or which home to live in, to less critical decisions like determining which route provides the fastest way to get around town from point A to point B. It involves looking are more than just the obvious effects of a decision, and instead considering more in-depth factors

Letting Go of Biases
One of the most important facets of critical thinking is that it requires us to let go of our biases when making decisions. In the business world, it’s easy to analyze a situation based on only our perspective – not that of clients, suppliers, and other stakeholders. No matter how well informed you think you are about something, it’s highly likely that your understanding is still victim to personal biases and opinions. Critical thinking involves forgetting what we think we know about a situation and instead relying on verified data and proven facts.

Utilize Data
The data you use for the critical thinking process should come from a variety of different sources and focus on varying sides of the decision to be made. For instance, if you were planning to release a new product line, normal thinking would involve determining how well it would sell. With critical thinking you’d want to look at how it may affect your current lines, how it will affect the way that existing customers perceive your brand, and how diversifying will impact areas of your business like marketing and distribution.

Discuss Your View with Others
If you want to be effective at critical thinking, you should be open to the opinions of others. Even when armed with spreadsheets full of data, it’s easy to overlook specific implications of business decisions. By talking with other stakeholders and discussing your thoughts and ideas, you’re able to get feedback from intelligent, independent thinkers who may see sides of the situation that haven’t even crossed your mind.

Acting on “hunches” or “instinct” may result in short-term business wins, but these intangible sources of information are rarely enough for long-term success. Critical thinking is key when it comes to making the decisions that are important to your company. By using data covering a variety of aspects of your plans, you can better see how different choices will impact the different areas of your operations, not just from your perspective, but also from those of other stakeholders in your organization.

Author's Bio: 

Tracey Fieber helps business owners simplify, automate, and grow their businesses and their lives. She believes in the power of hiring the right people, and helps her clients cultivate highly effective teams that allow them to focus on the work about which they're passionate. By nurturing business owners' strengths and holding them accountable for their own success, Tracey's leadership, communication, and coaching techniques help her clients take massive leaps forward.