MentorWords

Once again I return to the topic of how we think, because in an era that has been preceded by dramatic change* capped by our present-day wholesale questioning of accepted dogma, how we think – more than what we think – will determine whether or not we are successful.

Intelligence and critical reasoning skill are quite different. Intelligence is a capacity for reasoning, an ability that could be developed. If you have ever been to a Mensa meeting, you have entered a gathering that celebrates IQ. IQ is the measure of one’s mathematical and spatial reasoning, understanding of language, and logical ability. This means that IQ is not a reflection of one’s life experience, study, discipline, wisdom, or character, and it absolutely cannot be used as a projection of one’s potential worth or accomplishment.

Critical reasoning is the capacity, developed through practice and discipline, to make sense of information. This includes the ability to question one’s accepted beliefs and test them for bias and error. Your success as an entrepreneur, business manager, artist, parent, friend, partner, or teacher depends on your critical reasoning skill far more than on your innate intelligence.

The failure to use critical reasoning is responsible for the current financial collapse. Newton taught us that what goes up must come down (though it’s always Blood, Sweat & Tears in my head), and numerous financial boom & bust cycles have demonstrated this is true in markets as well. Yet none of those pesky factual details deterred millions of people and billions of dollars from pursuing an anti-gravity agenda. The critical reasoning for a potential home buyer about to get in over her head might have included these ideas:

1. Economic history is filled with booms and busts
2. Real estate value historically grows 1% per year over the rate of GDP
3. The mortgage on this house would represent 70% of my take-home pay once the interest kicks in
4. Interest rates go up roughly as often as they go down
5. A big motivation for wanting this house is to prove to my (sister, brother, uncle, mom) that I am doing well
6. I wouldn’t have to worry so much if we bought a much less expensive house
7. Hmm . . . what am I feeling? Greedy? Competitive? Are those good motivations for buying this house?
8. My children would be just as happy in a less expensive house – or in the one we’re in right now
9. I want to start my own business, and I need to save money for that

Had more people entertained those nine ideas – or other ideas like them – less people would be losing their homes right now. And all those ideas were accessible to any curious person, regardless of intellectual ability.

The failure to use critical reasoning leads independent business owners to put themselves out of business – up to 70% of the time according to most business statistics. Most of my consulting customers are doing very well, and all are going to survive the current downturn. But I hear from business owners every day who in one breath say they need help, and in the next breath insist nothing can be done. They claim that all consumers have stopped buying (which, if it were true, would mean my spouse was home right now instead of making a run to Chez Target). The critical reasoning such an owner could engage in might include these ideas:

1. The years leading up to the current economic struggle were good growth years
2. I cut my marketing budget three times during those years – with no discernable negative impact on sales
3. My sales are down 20% and average order value is down 28%
4. To save money this year, I cut my marketing budget again
5. I have reduced my overall marketing budget by 30% in the past three years
6. My new customer acquisition rate is down 50%
7. My current customers are each buying less
8. I am afraid to spend any money right now
9. Cutting costs seems free.
10. My competitors are advertising more than me

Of course, many reasons for business failure exist, but ideas similar to these are present in a remarkable number of cases. A good critical thinker might further evaluate their opinion of marketing (it’s a waste of money, nobody really knows if it’s working, marketing people bug me, it’s all just a matter of taste), consider if their opinion is valid using research and input from knowledgeable sources, and perhaps come to the conclusion that emotions, uninformed opinions, habit, and possibly ego are the real culprits behind their impending business failure.

Many entrepreneurs are in business to sell something that is produced from the depths of their self identity. They are selling their ideas, artistic expression, and innovation in the form of products.  They struggle to remain motivated and confident as their products and services are buffeted by impersonal market forces. Solid critical reasoning skills can mean the difference between forging on to success or flaming out and returning to the life of the paystub. Successful entrepreneurs engage these types of ideas:

1. I hate rejection
2. What the hell. Everybody hates rejection
3. My products are not selling
4. I am spending less than 2% of my time and budget engaged in selling activities
5. I am truly good at (whatever the list is)
6. I am truly not good at (another list)
7. I need to get some help with doing the things I am not good at
8. I need to devote some of my time to improving the things I am not good at
9. I am desperately afraid of failure and I get immobilized when I am afraid
10. My (mom, brother, dad, cousin, neighbor) would be able to offer me good advice, but I’m not asking for it because I fear that would make me look lame

The act of thinking about your thinking, of evaluating your action (or inaction) as a direct reflection of your thinking, points out the flaws and misperceptions that are playing a role in your ability to be successful.

Intelligence has never been a prerequisite for success, though it is responsible for an inordinate amount of ego. On the other hand, solid critical thinkers (consider Galileo and Darwin, or more contemporaneously Bruce Bartlett or Matt Miller) agitate their peers to a desire to shoot them on sight. Why is that?

Because it is comfortable to think the things we think. We want to continue to believe the things we believe. And the past decade has given alarming credence to the notion that one who does not change his or her mind – ever – demonstrates a desirable character trait.

You cannot wring value from an unchanging mind. On a global scale, time, technology, new discoveries, and continued evolution present new ideas and challenge old ones. On a personal level, exposure to new places, people, and theories — and the accompanying internal and interpersonal debate — throws doubt on cherished beliefs and introduces thoughts previously unconsidered. This is deeply uncomfortable work for individuals and societies. Yet every significant leap forward in world history has occurred on the heels of ideational discomfort. And this, not the comfort also known as intellectual laziness, should be your goal.

* For a 2-paragraph overview of economic & media changes influencing society today, check out the thinking/critical blog. You’ll find it in paragraphs 6 & 7.

© 2009. Andrea M. Hill