Critical thinking involves analyzing observations, facts, evidence, and arguments to form a judgment about what someone reads, hears, says, or writes.
Understanding critical thinking
Critical thinking is a practice that has been debated and honed for around 2,500 years, but the term itself was likely first introduced in 1910 by American philosopher, psychologist, and educational reformer John Dewey.
In his book How We Think, Dewey described critical thinking as an “active, persistent, and careful consideration of a belief or supposed form of knowledge in the light of the grounds which support it and the furthest conclusions to which it ends.”
Dewey also wrote his book to help readers take inspiration from the natural curiosity, fertile imagination, and love for experimentation that many children possess.
Richard Paul and Michael Scriven’s definition from the 8th Annual International Conference on Critical Thinking and Education Reform in 1987 is also worth a mention.
Paul and Scriven considered critical thinking to be an intellectually disciplined process where information was actively and skilfully conceptualized, analyzed, applied, synthesized, and evaluated.
This information – gathered from observation, reflection, experience, reasoning, or communication – forms the basis of one’s actions and beliefs.
In its pure form, Paul and Scriven argued that critical thinking was “based on universal intellectual values that transcend subject matter divisions: clarity, accuracy, precision, consistency, relevance, sound evidence, good reasons, depth, breadth, and fairness.”
The qualities of a critical thinker
At the core of every critical thinker is the ability to be an active learner who questions ideas and assumptions rather than simply accepting them at face value.
That is, they are not passive recipients of information and will always strive to ensure that the information present best represents the bigger picture.
To that end, the critical thinker can:
- Determine the relative importance of different ideas, arguments, or facts.
- Identify reasoning errors or inconsistencies.
- Tackle problems in a systematic fashion.
- Easily understand the link between ideas.
- Build, recognize, or appraise arguments.
- Critically reflect on their own assumptions, beliefs, and values to learn from past experiences and improve in the future, and
- Substantiate and communicate their reasoning to others.
Critical thinking skills that are important in business
Here are just five critical thinking skills that are important in business:
Evaluation of alternatives
Successful businesspeople can accurately evaluate a list of options and establish priorities.
They can also determine the quality of each alternative and, as we touched on earlier, explain the rationale behind their decisions.
Decision-making in precise contexts
Critical thinkers use deductive reasoning to anticipate outcomes and predict logical consequences.
They use this skill to consider the implications of directives, policies, and regulations.
Decision-making in ambiguous contexts
Conversely, critical thinkers use inductive reasoning to make decisions in circumstances that are ambiguous, uncertain, or risky.
These decisions are the ones most likely to succeed given the available information.
Problem analysis
Where the individual can identify the key components of a complex problem and then address it with robust analysis and interpretation skills.
Decision-making in quantitative contexts
Data analysis is synonymous with business success.
Strong critical thinkers can interpret and evaluate data across numerous different formats to solve a problem in the most efficient way.
Critical thinking examples
To conclude this piece on critical thinking, we’ll describe a few of the ways it may be useful in business today.
Risk assessment
In finance, wealth management firms must routinely evaluate new legislation to determine whether it will affect their ability to deliver client returns.
This requires careful analysis of the data, problem-solving (determining how the firm can work around the new legislation), and creativity (open-mindedness to the various scenarios or outcomes that could impact operations and client satisfaction).
In this context, critical thinking is key to turning a profit and avoiding compliance issues.
Recruitment
The objectivity of critical thinking is also crucial during the recruitment process.
Now more than ever, HR departments must be able to analyze hundreds or even thousands of applications to select the best candidate.
Objectivity means the firm does not favor a certain candidate because of their age, gender, race, connection with another employee, or any other factor.
Critical thinking plays a key role here since confirmation bias is sometimes unconscious and can prevent the organization from recruiting the best talent.
Collaboration and problem-solving
Critical thinking is also important in team-based problem-solving which invariably includes some form of brainstorming or ideation.
Organizational teams that employ critical thinking first encourage all team members to contribute and then analyze their input in a logical and constructive way.
The most effective teams recognize any weaknesses or negative points in a colleague’s argument and use evidence to support their assertions.
Asking the right questions
Critical thinkers also understand the importance of asking the right questions to arrive at the most accurate conclusion.
Some of the questions that encourage an active line of inquiry include:
Outcome-based questions
When an employee feels they could benefit from the skills or experience of a co-worker, outcome-based questions are ideal.
When someone is asked how they would act in a certain situation, the employee may learn new perspectives or possibilities.
Structural questions
These questions deal with processes or systems and how they function.
Since processes and systems have been honed over time via trial and error, structural questions reveal efficiencies that can be applied to one’s own endeavors.
Reflective questions
To develop critical thinking skills based on real-world scenarios, employees can ask someone to reflect on an experience and explain their thought processes at the time.
Open-ended questions
These questions encourage longer, more detailed answers that are more likely to provide useful or relevant insights.
Key takeaways
- Critical thinking involves analyzing observations, facts, evidence, and arguments to form a judgment about what someone reads, hears, says, or writes.
- At the core of every critical thinker is the ability to be an active learner who questions ideas and assumptions rather than simply accepting them at face value.
- Critical thinking is an integral part of business. Just a few of the scenarios where it is effective include recruitment, risk assessment, collaborative problem-solving, and question-based learning or research.
Connected Business Concepts
Convergent vs. Divergent Thinking


















Read Next: Biases, Bounded Rationality, Mandela Effect, Dunning-Kruger Effect, Lindy Effect, Crowding Out Effect, Bandwagon Effect.
Other related business frameworks:
- AIDA Model
- Ansoff Matrix
- Business Analysis
- Business Model Canvas
- Business Strategy Frameworks
- Blue Ocean Strategy
- BCG Matrix
- Porter’s Five Forces
- VRIO Framework
Additional resources: