James Allen links Richard Thaler’s recent Nobel Prize win with a very important business skill.
Knowing your own mind is not something that tops the list of things to put on a winning CV. It’s a given that people who do well in their careers are knowledgeable and strong-minded.
But the huge amount of interest – and perhaps surprise – in the recent news that a Nobel Prize has been awarded to a specialist in behavioural economics suggests those of us with a critical, non-assumptive way of thinking could be shouting louder about it.
US economist Richard Thaler has spent decades studying the decisions that lead to economic outcomes, i.e. why a consumer chooses one product over another. Much of our decision-making behaviour turns out to be pretty irrational, where we decide based on our gut feelings rather than rational logic, so behavioural economics looks to make sense of that.
Thaler is credited with pioneering ‘nudge theory’, which aims to change public behaviour through a series of small, almost imperceptible nudges that help people make better decisions. It’s based on the premise that we’re more likely to choose what is easiest over what is wisest.
In day-to-day terms, think about how supermarkets know we’re more likely to choose the items that are at eye-height. So to encourage people to eat more healthily, they could put salads on those shelves.
…it is easy to see why there is such a need for critical thinking to be understood and applied in modern life, to determine credible sources and arguments.
We can take the example of the proposed system of presumed consent for organ donation. Prime Minister Theresa May suggested the UK move to this method, rather than the current arrangement where they need to actively opt in.
By introducing this ‘default arrangement’ the government would be making it easier for people to choose to be organ donors – it’s easier to go with the default choice than to opt out.
Dan Ariely uses this example in his books, showing that countries who use the opted in default have a far, far higher percentage of organ donors. This way, organ donation becomes a social norm and not something which requires consideration or action.
But with behavioural economics impacting far more than which salad we buy, how can we be sure we are in control of our actions? If we are to hesitate before every purchase and consider our reasoning, would we fast become experts in critical thinking, or simply increase tendency to procrastinate?
In an era where jobs and services are threatened by automation, analytical thinking is upheld as the human superpower that will keep employees in their jobs.
The World Economic Forum suggests critical thinking has become more sought after in the workplace in recent years and will be the second most valued skill by 2020, after complex problem solving. Creativity will jump from tenth to third place.
Critical thinking involves the uses of analysis and evaluation to come to a decision. By being aware of potential biases, influences and flaws in arguments, and spotting patterns, a person is able to reach a more balanced view.
Twinned with the deluge of information we are subjected to through social media and the proliferation of fake news – it is easy to see why there is such a need for critical thinking to be understood and applied in modern life, to determine credible sources and arguments.
By familiarising ourselves with the elements of critical thinking and taking care with our deliberations we are better prepared to see through seductive and persuasive messages or emotionally-charged arguments or claims.
By understanding the leaps and assumptions you are making subconsciously, or as a result of a functioning routine and outside influences, everyday decisions can be challenged or made with greater confidence.
These skills can be used to decipher sales messages, disarm persuasive arguments, and to question things you are being sold as fact. Choosing a position to take, arguments to support and how to attribute credibility and value will take on more meaning and deliver better results.
Breaking down your assumptions and understanding the thinking mistakes you can fall into is the starting point in protecting your knowledge and opinions. Otherwise, you could be letting somebody else make your decisions for you.
About the author
James Allen is founder of Creative Huddle, which works with teams and organisations to help them learn skills including creativity, critical thinking and problem solving. Creative Huddle is running a Critical Thinker open workshop on 24 November in London.