Critical Thinking and Managerial Decision Making

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MGMT 20135: CRITICAL THINKING AND MANAGERIAL DECISION-MAKING

Week 5- Lecture

Outline

Important points about the course, your progress

Conclusions and Innovation

Decisions and the context

Interpreting your DISC results

Introduction to self-reflection essay

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Important information

You should be accessing Moodle regularly now

Have you finished your DISC Assessment Tool? This is essential for successfully finalising the reflective essay (Assessment 2).

You should start to think about who you want to work with for Assessment 3. You will need to sign up for your group on the unit’s Moodle page. Failure to do so may result in your not receive a grade.

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Conclusions and Innovation

The chapter of the text builds on the idea that conclusions have 5 elements:

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Assumptions

Facts

CONCLUSIONS

Observations

Experiences

Beliefs

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Conclusions and Innovation

But just knowing how we end up with conclusions by which to base our decisions is not enough when innovating or looking for truly creative outcomes

Define innovation and creativity as:

Providing a new or modified conclusion that obtains a positive result, such as a customised process, fresh product, different marketing approach, or different way of handling a customer call.

If you are looking for a true breakthrough, a paradigm-changing solution more is needed

Conclusions that lead to innovation are something most people can identify with the right effort and mindset

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Conclusions and Innovation

Hierarchy of conclusions that allow one to “push the boundaries” and innovate

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Impossible Thinking

Abductive Thinking

Outside-the-box Thinking

Conclusions

Impossible, abductive, outside-the-box thinking produce solutions you cannot reach otherwise

Conclusions of the basic kind should produce quality solutions

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Outside-the-box thinking

Must think outside the usual boundaries that make up regular conclusions

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Assumptions

Facts

CONCLUSIONS

Observations

Experiences

Beliefs

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The 5 elements that make up your premise that leads to your conclusion

Outside-the-box thinking

Another way of thinking of it

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Assumptions

Observations

Experiences

Beliefs

Facts

Assumptions

Observations

Experiences

Beliefs

Facts

Example

Place your pen or pencil on one of the dots, and without lifting your pen off the paper, without folding, mutilating or destroying the paper, draw 4 straight lines that connect the dots

Solution see https:// www.youtube.com/watch?v=Rq3ta6SvlTo

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Quick Exercise

In 1 minute write down other uses of brick, as many as you can think of and not be bound by your premise of what bricks are normally for

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Some people can think of quite a lot

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Abductive thinking

Like making an educated guess

Use knowledge and experience as a guide, identifying the most likely scenario

Useful when thinking outside-the-box thinking doesn’t yield results

From the time we were born, out brains are constantly doing what it can to make sense of the world

Some examples:

https://www.youtube.com/watch?v=vflZuk-_ Hz4

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Abductive thinking

Abductive thinking is important if we begin thinking like the old dog that can’t learn new tricks

Experienced professionals who are finding they need a different perspective often invite inexperienced people to help

They find their questions stimulates different ways of thinking

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Key points about abductive thinking

Experience is a tremendous asset

You can infer based on knowledge and experience, that is, identify a high-confidence conclusion

Works most of the time but easy to get a case of “old dog” thinking

Can combat this by teaming with someone who can look at a problem with fresh eyes and has much less experience but willingness to figure things out

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Impossible thinking

How to accomplish the impossible

Put aside any preconceived ideas of what can or cannot be done

Thus, do not discard ideas because the brain had determined that they were not relevant

Putting a man on the moon….

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Example

Pharmaceutical scientists are asked “how long would it take to find a cure for disease X and get it to market?”

They answer “10, 12 or even 15 years.”

Then they are asked “how about in 8 years?”

They say “not going to happen, impossible, too much red tape.”

You then say “a virus called QXX that could kill millions has just emerged, could even wipe out half of Earth’s population, what is the chance of finding a cure in less than six months?

They then start saying things like “1 to 2 months.”

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Decision-making concepts

Contexts are important

Increasingly decision-making starts with identifying if the decisions that need to be made sit in one of the following context categories:

Simple

Complicated

Complex

Chaotic

Unclear (which of the 4 above applies)

Disorder

CHAOTIC

COMPLEX

SIMPLE

COMPLICATED

UNORDERED

ORDERED

Simple

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The Context characteristics The leader’s job Danger signals Response to danger signals
Simple (e.g. Getting reports done on time) Repeating patterns and consistent events Clear cause and effect relationships evident to everyone, right answer exists Known knowns Fact based management Sense, categorise, respond Ensure proper processes in place Delegate Use best practices Communicate in clear, direct ways Understand that extensive interactive communication may not be necessary Complacency and comfort Desire to make complex problems simple Entrained thinking No challenge of received wisdom Overreliance on best practice if context shifts Create communication channels to challenge orthodoxy Stay connected without micromanaging Don’t assume things are simple Recognise both the value and the limitations of best practice

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Complicated

The Context characteristics The leader’s job Danger signals Response to danger signals
Complicated (e.g. Identified that there is a defect in the product) Expert diagnosis required Cause and effect relationships discoverable but not immediately apparent to everyone, more than one right answer possible Known unknowns Fact based management Sense, analyse, respond Create panels of experts Listen to conflicting advice Experts overconfident in their own solutions or in the efficacy of past solutions Analysis paralysis Expert panels Viewpoints of non-experts excluded Encourage external and internal stakeholders to challenge expert opinions to combat entrained thinking Use experiments and games to force people to think outside the familiar

Complex

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The Context characteristics The leader’s job Danger signals Response to danger signals
Complex (e.g. Must get a crippled space craft back to Earth safely, such as Apollo 13 in real life) Flux and unpredictability No right answers, emergent instructive patterns Unknown unknowns Many competing ideas A need for creative and innovative approaches Pattern based leadership Probe, sense, respond Create environments and experiments that allows patterns to emerge Increase levels of interaction and communication Use methods that help generate ideas, open up discussion to the group, set barriers, stimulate attractors, encourage dissent and diversity, manage starting conditions Temptation to fall back into habitual, command and control mode Temptation to look for facts rather than allowing patterns to emerge Desire to accelerate resolution of problems or exploitation of opportunities Be patient and allow time for reflection Use approaches that encourage interaction and patterns to emerge

Chaotic

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The Context characteristics The leader’s job Danger signals Response to danger signals
Chaotic (e.g. Major and unexpected disaster, Hurricane Katrina, Twin Towers) High turbulence No clear cause and effect relationships, so no point in looking for the right answer Unknowables Many decisions to make and no time to think High tension Pattern-based leadership Act, sense, respond Look for what works instead of seeking right answers Take immediate action to re-establish order (command and control) Provide clear, direct communication Applying a command and control approach longer than needed “Cult of the leader” Missed opportunity for innovation Chaos unabated Set up mechanisms (such as parallel teams) to take advantage of opportunities afforded by a chaotic environment Encourage advisers to challenge your point-of-view once the crisis has abated Work to shift the context from chaotic to complex

Summary

You explore possible assumptions and their viability, the robustness of the premise

You examine your conclusions, defending/testing them

Identify how your conclusions can persuade and influence, lead to change

You look at the full spectrum of conclusion types that are required

Outside-the-box

Abduction

Impossible thinking

Then you move to the decision stage, which in the first instance involves understanding the context

More on decisions next week….

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