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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 August 6, 2020

Why Working 9 to 5 Is Outdated

Why Working 9 to 5 Is Outdated

Bristol is the most congested city in England. Whenever I have to work at the office, I ride there, like most of us do. Furthermore, I always make sure to go at off hours; otherwise, the roads are jam-packed with cars, buses, bikes, even pedestrians. Why is that? Because everyone is working a traditional 9 to 5 work day.

Where did the “9 to 5” Come From?

It all started back in 1946. The United States government implemented the 40 hour work week for all federal employees, and all companies adopted the practice afterwards. That’s 67 years with the same schedule. Let’s think about all the things that have changed in the 67 years:

  • We went to the moon, and astronauts now live in space on the ISS.

  • Computers used to take up entire rooms and took hours to make a single calculation. Now we have more powerful computers in our purses and back pockets with our smartphones.

  • Lots of employees can now telecommute to the office from hundreds, and even thousands of miles away.

In 1946 a 9-5 job made sense because we had time after 5pm for a social life, a family life. Now we’re constantly connected to other people and the office, with the Internet, email on our smartphones, and hashtags in our movies and television shows. There is no downtime anymore.

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Different Folks, Different Strokes

Enjoying your downtime is an important part of life. It recharges your batteries and lets you be more productive. Allowing people to balance life and work can provide them with much needed perspective and motivation to see the bigger picture of what they are trying to achieve.

Some people are just more productive when they’re working at their optimal time of day, after feeling well rested and personally fulfilled.  For some that can be  from 4 a.m. to 9 a.m; for others, it could be  2 p.m. to 7 p.m.

People have their own rhythms and routines. It would be great if we could sync our work schedule to match. Simply put, the imposed 8-hour work day can be a creativity and morale killer for the average person in today’s world.

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Productivity and Trust Killer

Fostering creativity among employees is not always an easy endeavor, but perhaps a good place to start is by simply not tying their tasks and goals to a fixed time period. Let them work on their to-do list at their own pace, and chances are, you’ll get the best out of your employee who feels empowered instead of babysat.

That’s not to say that you should  allow your team to run wild and do whatever they want, but restricting them to a 9 to 5 time frame can quickly demoralize people. Set parameters and deadlines, and let them work at their own creative best with the understanding that their work is crucial to the functioning of the entire team.

Margaret Heffernan, an entrepreneur who previously worked in broadcasting, noted to Inc that from her experience, “treating employees like grown-ups made it more likely that they would behave the same way.” The principle here is to have your employees work to get things done, not to just follow the hands on the clock.

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A Flexible Remote Working Policy

Yahoo CEO Marissa Mayer famously recalled all her remote workers, saying she wanted to improve innovation and collaboration, but was that the right decision? We’ve all said that we’re often more productive in a half day working from home than a full day working in the office, right? So why not let your employees work remotely from home?

There are definitely varying schools of thought on remote working. Some believe that innovation and collaboration can only happen in a boardroom with markers, whiteboards and post-it notes and of course, this can be true for some. But do a few great brainstorms trump a team that feels a little less stressed and a little more free?

Those who champion remote working often note that these employees are not counting the clock, worried about getting home, cooking dinner or rushing through errands post-work. No one works their 9-5 straight without breaks here and there.  Allowing some time for remote working means employees can handle some non-work related tasks and feel more accomplished throughout the day. Also, sometimes we all need to have a taste of working in our pajamas, right?

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It’ll be interesting to see how many traditional companies and industries start giving their employees more freedom with their work schedule. And how many end up rescinding their policies like Yahoo did.

What are your thoughts of the traditional 9-5 schedule and what are you doing to help foster your team’s productivity and creativity? Hit the comments and let us know.

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