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Warren Buffett’s Best-Kept Secret to Achieving Massive Success: Critical Thinking

Warren Buffett’s Best-Kept Secret to Achieving Massive Success: Critical Thinking

Critical thinking skills are essential to success — any kind of success. Successful individuals are thinkers and they surround themselves with thinkers.

Consider Warren Buffett. He is known as the most successful investor of all time, and by his own estimate, he has spent 80 percent of his career reading.[1] And what makes him so successful is that he isn’t willing to be a passive recipient of what he reads. Instead, he schedule time to evaluate the information he gets so as to form his own insights. This may sound counterproductive. We’ve been taught to work more, sleep less, and hyper-focus on the things that directly pertain to our goals. We call it being productive. Buffett and those like him find thinking, reading, and contemplating more productive than taking meetings and “working.” He actively pursues knowledge.

Why people with strong critical thinking skills like Warren Buffett are more likely to succeed

Critical thinking involves being able to process information independently and to think clearly, logically, and reflectively. It is the ability to engage in rational thought and to understand and establish a connection between ideas. In essence, critical thinking is the ability to reason. It is about being an active learner rather than a passive recipient of information.[2]

They always question the status quo

The status quo is the current state of affairs. It’s the norm. It’s how things are done. You know you’ve found it when you hear the phrase,“We’ve always done it this way.” Critical thinkers ask questions such as, “Why do we do it that way?” “How can we make it better?” “What are our other options?”

They break down problems into smaller components and see the subtle connections between them

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They love to test boundaries. They dissect issues and then find a way to systematically solve them. By examining the individual pieces of a problem they are able to apply solutions that create a domino or cascading effect. They solve one issue which effects another issue and are able to solve them both simultaneously.

They are sensitive to the loopholes in their logic 

Critical thinkers ruthlessly question ideas and assumptions rather than accepting them at face value. They will always seek to determine whether the ideas, arguments, and conclusions represent the entire picture. They do not rely heavily on intuition and instinct. They test, prove, and disprove their hunches.

We are all fallible. Critical thinkers understand this and actively work to find the flaws in their own logic. One’s ability to think critically varies according to his/her current state of mind. Thinkers work to maintain objectivity, view the problem from all possible angles, and seek the input of others who are adept in logic and reasoning.

They tackle problems with a systematic plan

A system is designed to streamline and simplify processes. It improves effectiveness and makes effort more efficient. Most critical thinkers use a top down approach to problem solving. They are systematic in their efforts. They also set aside time for investigating challenging issues and brainstorming ways to push through them. They don’t tackle a problem without a plan.

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They apply the scientific method to problem solving

Critical thinkers are usually highly methodical. They approach a problem the same way a scientist would and then move through the phases of the scientific method, conducting experiments to prove and disprove their hypotheses. Each experiment provides insight into the problem and proves or eliminates an idea or solution.

3 steps to improve your critical thinking skills

Critical thinking is a skill set, meaning it can be learned. Learning to think critically often involves tweaking some of our processes instead of merely trying to adjust our way of thinking. If you do things a certain way, your thinking will follow a certain pattern. You will begin to develop the habit of thinking practically and then critically. Developing this skill takes deliberate practice and persistence.

Here are three steps to get you started:

1. Recognize the biases in your thinking

Biases are common. We all have them. However, our biases lead to fallacies in our thought processes and rob us of our objectivity. The most common and detrimental bias is the confirmation bias- our tendency to see what we want to see. We tend to search for, interpret, favor, and recall information in a way that confirms our preexisting beliefs or hypotheses.

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To cure confirmation bias, experts[3] suggest that inundating yourself with information is not the answer. It’s all about how you filter the information you do have. When you don’t selectively filter information, you lose your objectivity which is the heart of logical thinking. This particular prejudice is most prevalent in emotionally- charged situations and when you have something to lose. It also shows up when wishful thinking is present.

For example, in the middle of basketball season the home town team has a record that is below 500 and has been on a seven game losing streak. The star player has just gone out with a torn ACL and your friend says to you, “I know in my heart that our home team will win the NBA Championship.”

This statement disregards the facts–or at the very least, fails to consider them– and makes a prediction based on a feeling.

Here are a few ways to overcome confirmation bias:

  • When you recognize a bias don’t abandon your initial hypothesis right away. It may be completely or even partially correct. Test your theory.
  • Keep an open mind. Work on trying to come up with alternatives no matter how far-fetched they may seem. Test all of your ideas.
  • Embrace surprises. Don’t discount them or get discouraged. The unexpected happens. Use this new “surprising” information to your advantage.

2. Use 5 “Whys” to find out the root causes of problems

The “Five Whys” methodology, developed by Sakichi Toyoda (founder of Toyota), uses a”go and see” philosophy. This turns the decision-making process into a search for a solution that is based on an in-depth understanding of what’s actually happening. This method simply involves asking, “Why?” five times, allowing you to dig deeper each time. The goal is to drill down and find the core of the issue.

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Here’s a quick example:

The problem you are attempting to solve is that customers are complaining that when they receive merchandise they purchased online it does not match what they ordered (they are getting incorrect items, sizes, etc.).

  • Why are customers receiving the wrong products? Because the shipping company’s warehouse shipped products that are different from what the customers ordered.
  • Why did the shipping company warehouse ship different products than what was ordered? Because the personnel filling the online orders called the order in and gave it to the warehouse via telephone to expedite shipping. Errors were made during this process.
  • Why are the online order fillers calling in orders instead of using the normal process? Because each shipping order has a slip that must be signed by the shipping directory before it is put into the system and sent to the warehouse.
  • Why does each order slip have to be signed by the shipping director before it is shipped? Because the shipping director records the information for his weekly reports to the company CEO.
  • Why does the shipping director have to record the information for each order this way? Because he does not know how to generate the report using the system the order fillers use to send their orders to the warehouse.

Using this process, we were able to locate the breakdown in the process around the third “why.” Asking “Why?” the last two times generated our solution: train the shipping director to use the existing software to generate his reports for the CEO.

3. Treat each problem like an experiment

Using the scientific method to solve problems is an effective and efficient mental model for solving problems. Most people approach problems haphazardly and dive into the middle of the issues and become overwhelmed or miss key elements. Following a process allows you to establish a habit. Remember critical thinking is a skill that requires practice and persistence. Start at the beginning of the process every single time. Here are the steps:

  • Define the problem. Ask a question to discover what the true issue is.
  • Do background research. Gather information.
  • Construct a hypothesis. Make a prediction based on what you know so far, being careful to account for confirmation bias.
  • Conduct experiments. Test your hypothesis. Apply the “Five Whys” methodology when necessary.
  • Analyze your data and draw a conclusion. Analyze the results of your experiments and put them to the test. Are there any other possible solutions? If so, test them out.
  • Communicate your results. Present your solution along with your research and evidence.

Always reflect on and review your processes. It helps you to find gaps in your thinking and to adjust. Reflection helps develop objectivity.

With time, practice, and diligence using these three steps your critical thinking process will become a habit. You’ll be able to better predict results, anticipate pitfalls, and avoid biased thinking.

Reference

More by this author

Denise Hill

Denise shares about psychology and communication tips on Lifehack.

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Last Updated on May 28, 2020

9 Things Successful People Do To Always Get What They Want

9 Things Successful People Do To Always Get What They Want

One of the best decisions I’ve ever made was to take on the job of hosting my own weekly radio show. My radio show is about finding some of the most successful people in the world and bringing them on my show to ask them about what they did to become so successful in life and business.

In this article, I’m going to share with you some of the key takeaways I’ve picked up from talking to – and reading about – thought leaders from various fields about the things successful people do. Here, you can get some insights on how to get what you want.

Ready to dive in? Let’s go.

1. They Know What They Want

The first and most important thing that successful people do to always get what they want is so simple that most people forget about it: they figure out what they actually want.

When you know what you want, you will also know how to get what you want. If you’re unsure about what you want in life and business, I’d suggest picking up some career and self-improvement books to help you gain some clarity and focus.

2. They Are Assertive

Successful people know that they need to be both bold and sincere. Balancing these two characteristics is the essence of assertiveness.

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Oh, and by the way – being assertive is not a natural talent someone is born with. Assertiveness is a learned skill and anyone can do it, including you!

3. They Learn

You may have heard of the old saying, “great leaders are readers”. For the most part, I’d say this is true.

Let me give you an example. On my radio show, I regularly ask successful people about their habits that lead to success. Do you want to know something really neat? Every single one of them reads books.

Successful people read and learn as much as they can about what they want so that they can get what they want. If you’re curious about how to get what you want, then start reading a book. If you’re low on time, subscribe to a book summary site to get the core concepts of the books in your industry quickly.

4. They Make Things Meaningful

One of the most powerful things successful people do to always get what they want is that they make things meaningful. That is, they ensure that whatever endeavor they decide to embark upon is meaningful to them (and not necessarily to anyone else). They know and understand that it’s only worth it if it matters.

5. They Ask

One big thing that successful people always do to get what they want is this: they ask.

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Most people are too shy to ask for what they really want. If you are too shy to ask, you may never know how to get what you want. So, don’t be like most people.

Here’s an exercise you can do to get over it: next time you’re buying something, regardless of what it is, ask for a discount. Just do it. The worst-case scenario is that you’ll get a chuckle from the Barrista at Starbucks. The best-case scenario is that you’ll get comfortable with negotiating when it’s time to buy your next car.

6. They Take Action

Insight without action is useless. Successful people know that to always get what they want, they’ve got to take massive action.

One of the most powerful exercises I’ve ever discovered is this: never leave the sight of a goal without taking some kind of action towards its achievement. In other words, as soon as you decide you want something or as soon as you set a goal of some kind, do something – anything – that shifts you closer towards getting it.

7. They Use Their Time Wisely

Have you ever heard of NET time? It stands for “No Extra Time”.

For example: when you’re driving and sitting in traffic, are you listening to Mylie Cyrus? Or are you listening to an audiobook?

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Successful people take NET time seriously. Get yourself some audiobook so you can start listening to the best business and self-improvement books available – all while you’re on your way to work in the morning.

8. They Choose to Lead

You don’t need to have formal authority to become a leader. You just need to choose yourself. All successful people know this, and so should you. Knowing how to get what you want requires knowing how to lead the way for others and yourself.

Don’t wait for anyone else to do it, because the truth is that most people want to be led anyway. So, just step up and claim authority. Be the leader you wish you always had.

9. They Contribute

Successful people know that to get what they want, they have to be willing to help other people get what they want.

What happens when you stop doing your job? What happens when you stop caring about your schoolwork? What happens when you become emotionally disconnected from a relationship?

You suffer – that’s what happens. Successful people know and understand that in order to succeed, they need to contribute. They need to add value to the lives of others. They need to do their best so that they can become the best.

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So, Now What?

I hope this article has re-ignited the fire that you already had within you to be successful at any endeavor. The reason why I’m stressing the fact that you’ve already got everything you need to succeed and get what you want is that you wouldn’t be reading this if you weren’t already motivated to be successful.

At the end of the day, however, all the insights in the world are worth nothing unless you combine them with action. When it’s all said and done, it’s your decision what you do with this list and how you apply it to your life and career.

But if I may, here’s what I would suggest you consider as you get started doing the things to help you succeed:

Review this list of the 9 things successful people do to always get what they want and then compare it with where you currently are at each one of these 9 things. Rate yourself in each one of the 9 things. Next, pick just ONE of them to work on every week.

For example, if you find that you’d like to learn more about the business side of the company you work for, then go read the best business books to help you do that.

Never stop learning. Always feed your mind with the knowledge you need to become as successful as possible within your area or industry. It doesn’t matter how busy you are. We’re all busy. Make the time to expand your knowledge.

And remember: every key learning should be immediately followed with action.

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Featured photo credit: Austin Distel via unsplash.com

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