why critical thinking is important in entrepreneurship

Importance of Critical Thinking in Entrepreneurship

We all know that entrepreneurship is a rollercoaster world, where every twist and turn can either be a wild ride or a strategic move. In this whirlwind of decision–making, we all must realize that one skill takes center stage: critical thinking. 

You read that right. This isn’t just some textbook term. It’s what guides you through the busy world of business, helping you make sense of the chaos and find your path to success. And I tell you, if you master this skill, it could be your secret weapon as an entrepreneur. Let’s unravel the importance of critical thinking and how to wield this powerful tool in the entrepreneurial world.

Understanding the Critical Thinking Advantage

Critical thinking in entrepreneurship  is the systematic process of conceptualizing, applying, analyzing, synthesizing, and evaluating information. With this information, entrepreneurs can reach answers or conclusions that are the best for their businesses and teams. It involves questioning and challenging assumptions, identifying biases, and understanding multiple perspectives.

This intellectual discipline, when practiced consistently, can help entrepreneurs reach their goals faster. Without it, many find themselves struggling to overcome the same type of problems and obstacles. That is why critical thinking is one of the most  important skills an entrepreneur  can work to build. This valuable attribute enhances the entrepreneur’s ability to interpret, infer, explain, and make reasoned judgments. By engaging in critical thinking, individuals can make well-informed decisions, solve problems effectively, and foster a deeper understanding of complex issues.

Critical thinking is not just something you learned in school; it can be your secret weapon to succeed in business. Whether it’s devising a marketing strategy, navigating a crisis, or hiring the right talent, critical thinking is the secret sauce that transforms your challenges into triumphs. 

As an entrepreneur myself, when I think about critical thinking, it’s about looking beyond the surface, questioning assumptions, and making informed decisions that propel your business forward.

Questioning Assumptions

Before you dive headfirst into making a huge decision, take a step back. I recommend you question your assumptions. Are you just winging it? Are you making choices on preconceived notions or are they based on actual data and insights? 

Let’s say you assume your target market prefers one feature over another – challenge that assumption you have. How can you do this? Use surveys, maximize customer feedback, or do market research to uncover these truths. 

When you question your own assumptions and those of others, you help uncover the often-unseen foundations upon which beliefs and decisions are built. Assumptions can be limiting. These limits can shape our understanding and perspective without us even realizing it. 

By actively questioning them, we can identify potential biases or unfounded beliefs that may skew our reasoning. This process not only leads to more accurate and objective conclusions but also encourages a deeper level of thinking. All of which, can help us drive our businesses forward in a more dynamic way.

Instead of assuming your customers want more features, utilize surveys that shed light on their priorities, preferences, and main pain points that your product can help solve.

Analyzing Information

Let’s be real. We all know that data is like gold in the world of business. But, and that’s a huge BUT, it only becomes valuable when and if you know how to mine it. Agree?

Critical thinking truly involves analyzing information with a magnifying glass. Whether it’s financial reports, marketing trends, or customer behavior, you must dissect the data to extract meaningful insights that can help you make informed decisions as an entrepreneur. 

Learning how to analyze information teaches us to think independently. It helps entrepreneurs understand exactly what they want to do and gives them the confidence to take steps forward. Dive into your sales data to identify recurring patterns. Are there specific products or services that are consistently performing well? Use this information to refine your offers.

Considering Alternative Perspectives

We all know that having tunnel vision is not great, especially if you’re an entrepreneur. Why? Because it can become a silent killer.  Critical thinking encourages   you to consider alternative perspectives. 

Invite diverse voices to the decision-making table – whether it’s your mentors, advisors, partners, or team. Embracing and being open to different viewpoints can illuminate blind spots and lead to well-rounded decisions. When planning a marketing campaign, seek input from team members with various backgrounds. Their perspectives can offer unique insights into your target audience.

Decision-Making with Precision

A good leader knows how to make informed decisions. And we all can agree that the  decision-making process  is the heartbeat of any business. 

Critical thinking enables you to transform gut feelings into strategic decisions. So instead of relying solely on intuition, you gather relevant data, weigh pros and cons, and envision the potential outcomes before making huge decisions and taking the plunge. 

 If you’re contemplating entering a new market, conduct a thorough market analysis. Evaluate key factors like competition, consumer behavior and preferences, and economic conditions before deciding. Trust me, this will help.

Remember that critical thinking is more than just about making decisions; it’s about making the right ones that propel your business forward. Encourage diverse perspectives, welcome healthy debate, and invest in continuous learning.

Problem-Solving Agility

We are aware that every entrepreneur, big or small, faces challenges. Truth be told, it’s an unavoidable part of the journey. 

Critical thinking equips you with problem-solving agility. So that instead of viewing problems are roadblocks, you see them as opportunities to improve, innovate, and become better. Break down complex issues into smaller, more manageable components so that you can tackle them one by one. 

If you encounter a sudden drop in sales, don’t panic.  Utilize critical thinking   to identify potential causes, analyze marketing conditions, and develop targeted strategies to address the issue. 

My take on all of this as an entrepreneur is that we all must learn how to navigate the business arena with finesse. It’s not a walk in the park, but it’s feasible. Running a business is akin to being the captain of a ship in uncharted waters. Critical thinking is your compass, guiding you through the complexities and uncertainties. 

As you navigate entrepreneurship, let critical thinking be the wind in your sails, propelling you toward success. After all, in the art of business, it’s not just about what you do; it’s about how you think.

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Team Writer: Victoria is an award-winning international communications manager with over 13 years of experience in strategic campaigns, brand storytelling, and building stakeholder relationships across diverse industries and regions. She is known to challenge norms and capitalize on brand storytelling opportunities. She is an avid writer, a frustrated chef, and a passionate advocate for diversity and inclusion.

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Why Critical Thinking is Crucial for Entrepreneurs

A s an entrepreneur, change is the only constant. The environment shifts rapidly, and the best entrepreneurs need to be able to adapt on the fly. That capability requires strong critical thinking skills. So why is critical thinking so important?

They define Critical thinking as the process of actively and intentionally conceptualizing information gathered via experience, reasoning, and observation and using that information to guide action and belief.

While critical thinking is an essential skill for people in all professions, entrepreneurs who know how to leverage it can create more opportunities in their industries and maintain their competitive edges – no matter what reality throws at them.  

This blog will talk about the benefits of critical thinking, what it does for entrepreneurs, and how you can develop more of it.

The 8 Characteristics of Critical Thinking 

Experts identify eight unique characteristics of critical thinking . They are as follows:

• Asking questions . Asking questions is essential for good critical thinking. Why is something the way it is? What does that mean for your business? And if you’re going to change it, how?
• Defining a problem . What gets measured gets managed. Entrepreneurs with good critical thinking skills know how to define a problem by making it specific enough to do address.
• Examining evidence . What’s the evidence that a problem exists? What is the duration and severity of the evidence, and how widespread is it?
• Analyzing assumptions and biases . Once you’ve examined the evidence, you also need to look at your reaction to the evidence. Forward-thinking entrepreneurs get honest about their beliefs and biases and know how to avoid sabotaging a decision because of them. 
• Avoiding emotional reasoning . Emotions can intoxicate, but they’re not a great platform for business decisions. Good critical thinking involves avoiding emotional reasoning and making decisions based on evidence, logic, and observation. 
• Avoiding oversimplification . While emotions aren’t a good way to make business decisions, neither is an oversimplification. It’s essential to consider an issue for what it is, with all its complexities and gray areas intact. 
• Considering other interpretations . What would others say about the situation? How would one of your mentors or leaders react? What might someone in a different professional position do about it? Considering other interpretations is a great way to better conceptualize a situation and make an intelligent decision. 
• Tolerating ambiguity . Finally, good critical thinking requires you to tolerate ambiguity. As an entrepreneur, situations won’t always have a cut-and-dried solution or outcome. You need to take that ambiguity and lean into the uncertainty to succeed in this arena. 

Critical Thinking Skills Entrepreneurs Do Differently

Now that we’ve discussed critical thinking characteristics, let’s discuss the features of the people who display it. Entrepreneurs with outstanding critical thinking skills tend to do these things differently:

• Develop Curiosity. Entrepreneurs with solid critical thinking skills know how to get curious and ask questions. They challenge the status quo, think outside the box, and cultivate a culture of innovation in their daily lives. 
• Alternative Thinking . Ambiguity, the quality of being open to more than one interpretation, is foundational to critical thinking. Entrepreneurs who think critically know how to lean into the obscurity, adapt, and keep moving – even when things don’t turn out as planned or unexpected information arises.
• Collaborate. Successful entrepreneurs know how to communicate with those around them. They clearly share the information they’ve gained and listen to input from others, understanding that their own ideas may not always be the best.
• Situational Assessment. Just because you held one position once doesn’t mean that position will hold in the future. The most successful entrepreneurs use critical thinking skills to redefine and validate their ideas, reassess their outlook, and determine whether they still view a situation accurately. 
• Risk Tolerance . Back to ambiguity – the best entrepreneurs know how to tolerate risk and balance risk and reward to keep moving forward accordingly. 
• Grit and Persistence . One of the best things about excellent critical thinking skills is that they equip entrepreneurs with the grit and persistence to learn from failure, keep going, and find solutions. 
• Big Picture Focus. Finally, critical thinking skills equip entrepreneurs to focus on the big picture. Instead of getting caught up in the minutia, they look at the long-term, which allows them to grow, pivot, and sustain their businesses. 

4 Quick Ways to Improve Your Critical Thinking Skills

Want to improve your critical thinking skills ? Don’t worry – great critical thinking is made , not born . Here are a few ways to build your critical thinking muscles:

1. Start Questioning Everything

Asking basic questions is a great way to build critical thinking skills. Start by thinking about a few simple questions, like what you already know, how you know it, what you’re trying to prove, and what you might be overlooking.  Simply getting in the habit of asking basic questions is an excellent place to improve your critical thinking skills.

2. Question Your Assumptions

Assumptions are dangerous throughout the business world, but especially so for entrepreneurs. Since entrepreneurs are trying to pave new paths and develop new ways of doing things, you cannot afford to make assumptions. Instead, get used to questioning your assumptions and critically evaluating your beliefs.

3. Evaluate The Evidence

If you’re not sure where to go, start evaluating the evidence you already have. What does it say about the situation? What does it reveal about the future?  How can you leverage it to make an informed, intelligent decision? Are there biases or assumptions you’re holding about the evidence?

4. Give Yourself Some Grace

Finally, remember that nobody thinks critically 100% of the time.  After all, critical thinking is a tool that you should deploy when you need to solve challenging problems, not a state you should be in at all times. If you miss an opportunity for critical thinking, be gentle with yourself and try again later. 

Better Critical Thinking Means Better Entrepreneurship

Want to improve your entrepreneurial skills? Improve your critical thinking skills! While developing excellent critical thinking may seem complicated, it’s as simple as identifying essential characteristics and incorporating them into your daily life. 

  Article by: Rick Mayo 

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Critical Thinking Crucial to Entrepreneurship

Apr 18, 2022

The students we serve, sometimes called Generation Next, are typically between 18 and 25 years of age and have grown up with personal computers, cell phones, the internet, text messaging and social media. They are taking their place in a world where the only constant is rapid change.  

Our entrepreneurship programs are focused on developing knowledge and critical thinking skills in an action-based, learn-by-doing setting. We see a new age of diversity coming — more diversity of backgrounds, more women and more younger people.

Characteristics we see in successful entrepreneurs which shape our thinking on programs and initiatives are:

• A sense of curiosity that allows them to continually challenge the status quo, explore different options and innovate
• A willingness to refine and validate their idea to determine whether it has potential
• The ability to adapt and keep moving forward when unexpected events occur
• The decisiveness to make challenging decisions and see them through
• The ability to build a team with complementary talents focused on a common goal
• A high risk tolerance and the ability to balance risk and reward
• Persistence, grit and the ability to deal with and learn from failure
• Critical thinking skills and a long-term focus which allows them to start, grow and sustain a business

In 1899, Charles Dewell, head of the U.S. Patent Office, recommended to President McKinley that the office should be closed because “Everything that can be invented has been invented.” History has proven and will continue to prove that vision to be woefully incorrect. Our take on the future has innovation and an increasingly diverse population of entrepreneurs playing a significant role in providing products and services across a broad range of solutions in health care, data analytics, artificial intelligence, additive manufacturing, digital commerce, ease of use, social media, social and environmental responsibility, location-independent solutions serviced by more remote workers, as well as online learning, just to name a few.  

Our job is to help develop the critical thinking skills to enable Auburn students to lead and excel in these fields and many others.

Lou Bifano Director New Venture Accelerator

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Here's How to Unlock the Power of Critical Thinking Learn this essential skill that entrepreneurs need to create, analyze and iterate on powerful new concepts.

By Brad Klune Edited by Dan Bova Feb 18, 2023

Opinions expressed by Entrepreneur contributors are their own.

Great entrepreneurs are able to question wide-held beliefs, make connections between seemingly disparate ideas, and essentially see what no one else can see.

This is what is called critical thinking, and you don't have to be born with it — it is a skill that can be learned. There are many experts available for one-on-one mentor sessions who can help you to look at things differently, whether that is coming up with new ideas or solutions to old problems. Allie Webb , founder of Drybar, and Jason Feifer , editor in chief of Entrepreneur magazine, are two experts in this arena who are available now for one-on-one video calls through the Intro expert platform.

Related: Search our database of business experts available for one-on-one video calls to help you find success

Why Critical Thinking is Important

Critical thinking allows individuals to analyze information objectively, identify and evaluate arguments, and make informed decisions.

Problem-Solving : Critical thinking helps you approach problems in a structured and systematic way. This is when you put on your consultant hat with a systematic process: Define the problem -> gather info -> analyze the info -> identify possible solutions -> implement -> evaluate -> make adjustments. By evaluating different options and weighing their strengths and weaknesses, you can arrive at an effective solution.

Decision Making : Effective decision-making requires the ability to evaluate information, weigh pros and cons, and arrive at an informed conclusion. Critical thinking skills are essential for making informed choices in both personal and professional settings.

Effective Communication : This starts with active listening. By analyzing information and arguments, you can articulate your thoughts and ideas more clearly and persuasively.

Tips for Improving Your Critical Thinking Skills

Practice questioning : The 5 Why's is a problem-solving method used to uncover the root cause of a problem by asking "why" questions. The idea is to keep asking "why" until the root cause is found. Here's how to apply the 5 Why's:

• Clearly define the problem: Identify what's happening and what needs to be fixed.
• Ask "Why" questions: Ask "Why" the problem is occurring and record the answer. Repeat this step five times.
• Analyze the answers: Evaluate the answers and see if they provide insights into the root cause of the problem.
• Identify the root cause: Use the answers to identify the root cause of the problem.
• Develop a solution: Use the understanding of the root cause to develop a solution to the problem.

Seek out new information and diverse perspectives : Stay informed and exposed to different opinions, perspectives, and sources of information. This will help you broaden your understanding of the world and refine your critical thinking skills.

Analyze arguments : When evaluating arguments, look for logical fallacies, flaws in reasoning, and biases. This will help you to identify the strengths and weaknesses of an argument and arrive at an informed conclusion.

Reflect on your own thinking : Take time to reflect on your own thoughts and beliefs. Consider how your experiences and background may impact your perspective.

The ability to think critically is rare. And vital. By developing this skill, you can raise your ceiling. You can become a better problem-solver, a more effective communicator, and a more valuable employee. The world is constantly changing and evolving, and by embracing critical thinking, we can adapt and thrive in the face of new challenges.

Let's make critical thinking a cornerstone of the modern workplace.

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Why Critical Thinking Matters in Your Business

Critical thinking should become a second-nature skill for leaders and employees across your organization.

Table of Contents

Many professionals hope to pursue careers they’re passionate about so they can find joy and meaning in their work. Caring deeply about your work is vital for engagement and productivity, but balancing emotions with critical thinking is essential in the workplace. 

When employees engage in critical thinking, they use an independent, reflective thought process to evaluate issues and solve problems based on knowledge and objective evidence. 

Critical thinking skills can guide your organization toward success, but to truly maximize the problem-solving benefits of critical thinking, it’s crucial to teach this skill to your entire team. We’ll explore critical thinking skills and how to teach them in the workplace to help your business improve its decision-making and problem-solving. 

What is critical thinking?

Jen Lawrence, co-author of Engage the Fox: A Business Fable About Thinking Critically and Motivating Your Team , defines critical thinking as “the ability to solve problems effectively by systematically gathering information about an issue, generating further ideas involving a variety of perspectives, evaluating the information using logic, and making sure everyone involved is on board.”

This is a complex definition for a challenging concept. Though critical thinking might seem as straightforward as stepping back and using a formal thinking process instead of reacting instinctively to conflicts or problems, it is actually a much more challenging task.

Critical thinking’s ultimate goal is ensuring you have the best answer to a problem with maximum buy-in from all parties involved – an outcome that will ultimately save your business time, money and stress.

Why is critical thinking essential in the workplace?

A World Economic Forum report revealed that critical thinking is one of the most in-demand career skills employers seek when trying to attract and retain the best employees – and employers believe critical thinking skills will become even more necessary in the coming years. 

Critical thinking in the workplace guarantees objective and efficient problem-solving, ultimately reducing costly errors and ensuring that your organization’s resources are used wisely. Team members employing critical thinking can connect ideas, spot errors and inconsistencies, and make the best decisions most often. 

Employees with critical thinking are also more likely to accomplish the following:

• Analyzing information
• Thinking outside the box
• Coming up with creative solutions to sudden problems
• Devising thought-through, systematic plans
• Requiring less supervision

What are critical thinking skills?

Critical thinking is a soft skill that comprises multiple interpersonal and analytical abilities and attributes. Here are some essential critical thinking skills that can support workforce success.

• Observation: Employees with critical thinking can easily sense and identify an existing problem – and even predict potential issues – based on their experience and sharp perception. They’re willing to embrace multiple points of view and look at the big picture. 
• Analytical thinking: Analytical thinkers collect data from multiple sources, reject bias, and ask thoughtful questions. When approaching a problem, they gather and double-check facts, assess independent research, and sift through information to determine what’s accurate and what can help resolve the problem. 
• Open-mindedness: Employees who demonstrate critical thinking are open-minded – not afraid to consider opinions and information that differ from their beliefs and assumptions. They listen to colleagues; they can let go of personal biases and recognize that a problem’s solution can come from unexpected sources. 
• Problem-solving attitude: Critical thinkers possess a positive attitude toward problem-solving and look for optimal solutions to issues they’ve identified and analyzed. They are usually proactive and willing to offer suggestions based on all the information they receive. [Related article: How to Develop a Positive Attitude in the Workplace ]
• Communication: When managers make a decision, they must share it with the rest of the team and other stakeholders. Critical thinkers demonstrate excellent communication skills and can provide supporting arguments and evidence that substantiate the decision to ensure the entire team is on the same page. 

What are the benefits of critical thinking in the workplace?

Many workplaces operate at a frantic tempo that reinforces hasty thinking and rushed business decisions, resulting in costly mistakes and blunders. When employees are trained in critical thinking, they learn to slow the pace and gather crucial information before making decisions. 

Along with reducing costly errors, critical thinking in the workplace brings the following benefits: 

• Critical thinking improves communication. When employees think more clearly and aren’t swayed by emotion, they communicate better. “If you can think more clearly and better articulate your positions, you can better engage in discussions and make a much more meaningful contribution in your job,” said David Welton, managing partner at Grove Critical Thinking.
• Critical thinking boosts emotional intelligence. It might seem counterintuitive to associate analytical rationality with emotional intelligence . However, team members who possess critical thinking skills are less prone to rash, emotion-driven decisions. Instead, they take time to analyze the situation and make the most informed decision while being mindful and respectful of the emotional and ethical implications. 
• Critical thinking encourages creativity. Critical thinkers are open to new ideas and perspectives and accumulate a significant amount of information when facing decisions. Because of this, they’re more likely to come up with creative solutions . They are also curious and don’t shy away from asking open-ended questions. 
• Critical thinking saves time and money. By encouraging critical thinking in the workplace, you minimize the need for supervision, catch potential problems early, promote independence and initiative, and free managers to focus on other duties. All this helps your company save valuable time and resources. 

How do you teach critical thinking in the workplace?

Experts agree that critical thinking is a teachable skill. Both Lawrence and Welton recommend exploring critical thinking training programs and methods to improve your workplace’s critical thinking proficiency. Here’s a breakdown of how to teach critical thinking in the workplace: 

• Identify problem areas. Executives and managers should assess workplace areas most lacking in critical thinking. If mistakes are consistently made, determine whether the issue is a lack of critical thinking or an inherent issue with a team or process. After identifying areas that lack critical thinking, research the type of training best suited to your organization. 
• Start small. Employees newly embracing critical thinking might have trouble tackling large issues immediately. Instead, present them with smaller challenges. “Start practicing critical thinking as a skill with smaller problems as examples, and then work your way up to larger problems,” Lawrence said.
• Act preemptively. Teaching and implementing critical thinking training and methodology takes time and patience. Lawrence emphasized that critical thinking skills are best acquired during a time of calm. It might feel urgent to seek critical thinking during a crisis, but critical thinking is a challenging skill to learn amid panic and stress. Critical thinking training is best done preemptively so that when a crisis hits, employees will be prepared and critical thinking will come naturally.
• Allow sufficient time. From a managerial perspective, giving employees extra time on projects or problems might feel stressful in the middle of deadlines and executive pressures. But if you want those working for you to engage in critical thinking processes, it’s imperative to give them ample time. Allowing employees sufficient time to work through their critical thinking process can save the company time and money in the long run.

How do you identify successful critical thinking?

Successful critical thinking happens during a crisis, not after.

Lawrence provided an example involving restaurants and waitstaff: If a customer has a bad experience at a restaurant, a server using critical thinking skills will be more likely to figure out a solution to save the interaction, such as offering a free appetizer or discount. “This can save the hard-earned customer relationship you spent a lot of marketing dollars to create,” Lawrence said. This concept is applicable across many business and organizational structures. 

You should also be aware of signs of a lack of critical thinking. Lawrence pointed out that companies that change strategy rapidly, moving from one thing to the next, are likely not engaging in critical thinking. This is also the case at companies that seem to have good ideas but have trouble executing them.

As with many issues in business, company leadership determines how the rest of the organization acts. If leaders have excellent ideas but don’t follow critical thinking processes, their team will not buy into those ideas, and the company will suffer. This is why critical thinking skills often accompany positive communication skills.

“Critical thinking doesn’t just help you arrive at the best answer, but at a solution most people embrace,” Lawrence said. Modeling critical thinking at the top will help the skill trickle down to the rest of the organization, no matter your company’s type or size.

Critical thinking is the key to your business success

When critical thinking is actively implemented in an organization, mistakes are minimized, and operations run more seamlessly. 

With training, time and patience, critical thinking can become a second-nature skill for employees at all levels of experience and seniority. The money, time and conflict you’ll save in the long run are worth the extra effort of implementing critical thinking in your workplace.

Rebecka Green contributed to the writing and reporting in this article. Source interviews were conducted for a previous version of this article.

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Critical Thinking Skills for Entrepreneurs

The average person is barely equipped with foundational knowledge on how to start a business, which is why the most successful entrepreneurs will tell you that it takes more than just ideas or even intelligence to turn that idea into an operating company. It's all about critical thinking.

Here, we'll look at the fundamental critical thinking skills every entrepreneur needs to succeed. These perceptions- and understanding-changing skills can be acquired through a thorough education or life experience, so there's no reason not to learn them.

Learn understanding not concepts:

This is the most important foundational skill of critical thinking. It allows you to process complex information and arrive at sound decisions. Understanding comes from analyzing data, discovering new perspectives, and finding hidden meanings in a meaningful way.

Practical experience teaches you to ask hard questions, think outside the box, and connect complex dots. There is no faster way to develop understanding than learning from mistakes and challenging your beliefs through debate.

Experiment, take risks, and challenge your own beliefs:

This is the testing phase of critical thinking, where you put your understanding to the test. That means you create two different conclusions and let the audience decide which one sounds more convincing. You can challenge your beliefs in real time if you know how to phrase your arguments correctly.

It's important to deal with ambiguity and uncertainty as well. You should be prepared for when things don't work out as you'd expect. A good example is emotional intelligence, where you get to choose between different options, like choosing between anger and relief.

Know what you don't know:           

When you were just an observer, you could choose between two sides. When you become an observer and create a new perspective, you are no longer the judge; you are the subject. The consequence is that you need to acknowledge that you don't know things.

Recognizing your ignorance will help you understand the unknown parts of any problem. It also helps you in your decision-making because you'll be able to consider new options and understand risks a lot better than if you felt invincible.

Do you feel like you are struggling with putting "strategy" and "business growth concepts" in place that make a difference? Doing it all is overwhelming! Let’s have a honest discussion about your business and see if the Power of 10 can help you. Click  “HERE”  to have a great conversation with our team today.

Written By The Strategic Advisor Board - Chris O'Byrne C. 2017-2021 Strategic Advisor Board / M&C All Rights Reserved www.strategicadvisorboard.com / [email protected]

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Critical thinking for Entrepreneurs: Its importance, and how to develop it?

• July 19, 2022
• Entrepreneur

The Indian economy has recently seen an escalation in the number of aspiring entrepreneurs coming up with a breakthrough idea or product to change the world. At present, emerging small businesses and entrepreneurs are the reason countries globally are capable of keeping their GDP afloat. Employment opportunities are created, and new ideas as products and services emerge, making life convenient for the ordinary person.

Now there is this thing about a business entrepreneur . It is easy to hop on the bandwagon of running a business and be fascinated with the idea of managing people. But it is not always sunny, and failure is a constant threat. But the first instinct is always risk aversion which demands patience, perseverance, and critical thinking, which rule the entrepreneurial domain.

In a day and age where the internet validates the existence of a sustainable business, business owners have to be thought leaders, not only inspiring their employees/ team in the firm and the people outside of it. While the world is watching and competitors are patiently waiting for them to fall, an entrepreneur’s critical thinking and problem-solving abilities are relentless weapons of success.

So if you are still wondering about the importance of critical thinking for entrepreneurs , it’s time you scroll to stop and continue to read what we have to say about it.

Importance of Critical Thinking

Critical thinking skills are taught to us from an early age to analyze situations and situations practically. It is easy to get high on emotions, especially when circumstances appear to be against you. That’s where a skill set like critical thinking intervenes to see the problem from an objective perspective and make decisions that orient with your business.

Abilities like critical thinking & problem solving are significant factors in business concerning market research. It is quite a challenge for an entrepreneur to grab people’s attention and make a noise in the market, whether they are a solopreneur or running a family business. That’s why critically evaluating the ideal buyer’s persona ensures better business strategy optimization.

It is not just about making a good business plan but interacting with people outside the business, which would require excellent communication skills. Believe it or not but critical thinking facilitates effective communication, which is the basis of growing a business and keeping it sustainable for a long time.

Moreover, to expand your brand and keep the growth consistent, it is essential to have examined beliefs more from a logical viewpoint. With the speed breakers a crucial aspect of business, making the right call by taking a bird’s eye view of the matter transforms the narrative. So, it isn’t only about making revenue in a business but keeping the integrity and business image stable.

How to develop Critical thinking ability as a business entrepreneur?

Be observant and careful, always ask questions.

There is a reason why children can grasp more information and retain knowledge than adults. They are curious about details and do not hesitate to ask questions. A business entrepreneur needs to be constantly curious and ask questions. Ask questions about the report presented by your marketing team; when you do that, it gives you a deeper insight into critically analyzing it for the welfare of your business.

Be Open-Minded

Be open to change and newer ideas from the people in your team. A good entrepreneur is a leader for their employees, encouraging them to share their thoughts. When you hear others’ opinions, you will know about different possibilities and make the right decision.

Entrepreneurship is a long and thoughtful journey where abilities like critical thinking and problem solving would always resolve conflict and keep the functioning of a business smooth. At MIDAS, we teach the value of entrepreneurship which is more than just managing operations and people. To know more, check out our one-year Post graduate diploma in entrepreneurship.

8 Reasons Why Family Business Fails in India

Family business succession planning: 2022 guide, related posts, impact of entrepreneurial education on the sustainability of family-owned businesses.

• February 3, 2023

The Importance of Governance and Mentoring in Inspiring Students to Pursue Entrepreneurship

• February 1, 2023

Theoretical Frameworks for Successful Entrepreneurship

• January 30, 2023

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Four Critical Skills of an Entrepreneur

November 9, 2023

View all blog posts under Articles

Richard Branson, Bill Gates, Coco Chanel, and Oprah Winfrey: what do all these household names have in common? They’re all entrepreneurs who rose to the top of their game thanks to the following important skills.

Advanced Critical Thinking Skills

It’s no coincidence that MBA programs focus on developing students’ capacity for critical thinking. Critical thinking is closely related to problem-solving, but it goes beyond that. As critical thinkers, entrepreneurs don’t merely solve problems. They solve problems in the best way.

Critical thinkers formulate a number of potential solutions to a problem and consider them all before deciding on the best one.

Superior Collaborative Skills

Many people think of entrepreneurs as individuals who’ve found success because they dared to go it alone rather than running with the pack. However, that doesn’t mean successful entrepreneurs work in isolation. Paul Allen was instrumental in Bill Gates' rise to the top. Steve Jobs might have been the public face of Apple, but Steve Wozniak was working just as hard behind the scenes.

Many successful entrepreneurs say knowing their weaknesses, as well as their strengths, is key to their achievements. When they recognize a weakness in themselves, they find people who excel in this area and work with them to achieve their goals.

Collaboration skills are crucial to this process. Successful entrepreneurs know how to communicate with the people around them. They clearly share the information they’ve gained and listen to input from others, understanding that their own ideas may not always be the best. They might be natural leaders, but they also understand how to work as part of a team.

Excellent Money Management Skills

Image via Flickr by reynermedia

You might employ an accountant or team of finance experts, but that doesn’t mean you can forget about the figures. As an entrepreneur, it’s important to have a sound understanding of your finances, cash flow, funding, and profits. You must feel confident with these numbers to feel confident making decisions about your budgets and revenue growth. Put simply, you must know how to manage money to successfully manage a business.

Superb Sales Skills

Many successful entrepreneurs don’t realize they’re using the same skills their sales team does every day. However, the clear communication, charisma, and persuasive powers sales professionals use are crucial for entrepreneurs. Entrepreneurs employ these skills when they negotiate with vendors, when they network with others in their industry, and when they seek out funding. Any time an entrepreneur looks to influence anyone in the business world, they’re using sales skills.

A lack of sales skills won’t just hinder your chances of success; it may even kill your business. One of the key reasons entrepreneurs fail is because they can’t secure funding. It’s easy to blame this problem on a tough economy, but in truth experts say a lack of trust is a more likely culprit. When you’re securing funding, you need to get investors to believe in you, your company, and your products or services. If you can’t, then your sales skills may need some work.

Cultivate these skills and you too may have what it takes to make it as a successful entrepreneur.

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Underpinning the entrepreneurship educator’s toolkit: conceptualising the influence of educational philosophies and theory

• Original Paper
• Open access
• Published: 07 January 2021
• Volume 4 , pages 1–18, ( 2021 )

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• Robin Bell   ORCID: orcid.org/0000-0002-7325-4277 1  

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Entrepreneurship educators can maximise the effectiveness of their delivery by having a firm grasp of the different educational philosophies and theories that underpin entrepreneurship education pedagogy and practice. A particular educational philosophical orientation underlies, directs, and drives educator practices and should align with what the teaching seeks to impart and achieve, and the roles the learners and educator play in the learning process. Whilst educators might not always be explicitly aware of their philosophical orientation, it will direct and drive their pedagogic practice and have implications for what they deliver, and how they deliver it. The benefits of bringing together different learning theories, philosophies, and approaches for entrepreneurship education has previously been posited in the literature. However, it has been highlighted that connections between educational theory and practice are limited, and that the field of entrepreneurship education could be advanced through providing links between education literature, theory, and learning. This paper advances the literature by linking educational philosophy and theory to entrepreneurship education and pedagogy in higher education. It discusses and highlights how behaviourism, cognitivism, constructivism, and humanism can be used to underpin and support learning in entrepreneurship education. This meets calls for the conceptualisation of how educational philosophies and theories can be integrated into entrepreneurship education to support learners.

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Introduction

Whilst a rapid increase has taken place globally in the access and availability of entrepreneurship education over the last twenty years (Fayolle 2013 ; Neck and Greene 2011 ), there remains the need for intellectually robust entrepreneurship education foundations. Such foundations should be robust at both a theoretical and methodological level (Pittaway and Cope 2007 ). However, it has been highlighted that limited literature exists linking educational theory and philosophy to entrepreneurship education; separation between educational literature and concepts of entrepreneurship education remains (Fayolle 2013 ). Whilst entrepreneurship education is a fast-developing field with room to grow, educational science has a long and distinct history that entrepreneurship education can leverage to develop and underpin its pedagogy.

Entrepreneurship educators have often had to find their own way in their pedagogic practice (Lackéus et al. 2016 ; Neck and Corbett 2018 ) and have had a limited understanding of the key educational theories and philosophies underpinning their practice. Hannon ( 2006 ) highlighted the importance of educators understanding how educational philosophies and theories inform the different pedagogies to achieve different educational objectives. This becomes challenging in entrepreneurship education, given the extensive and diverse objectives and pedagogical approaches from different learning activities (Ramsgaard 2018 ). Robinson et al. ( 2016 ) highlighted the benefits of bringing together different learning theories, philosophies, and approaches in entrepreneurship education to support learner-centred approaches, which they argue, could encourage and develop entrepreneurial awareness. Indeed, Brieger et al. ( 2020 ) highlight that there is no such thing as adult learning theory, but rather there are many philosophies and theories. Therefore, there is a need to carefully apply educational philosophies and learning theories to support learning goals and meet the needs of the learner.

Even though entrepreneurship education is inextricably related to education and education principles, philosophy and theory, only limited connections between education scholarship and entrepreneurship education practice and learning have been developed (Fayolle et al. 2016 ). Indeed, whilst entrepreneurship education scholarship and research is developing, there remain areas that need to be addressed, including developing the linkages between education literature, theory and learning (Neergaard et al. 2020 ). Bell and Bell ( 2020 ) have called for future work to investigate and conceptualise how a range of educational philosophies and theories can be integrated into entrepreneurship education to support learners. This paper meets these calls and contributes to the literature by linking educational philosophy and theory to entrepreneurship education and by exploring and conceptualising how the educational approaches of behaviourism, cognitivism, constructivism and humanism can be applied to support learning in entrepreneurship education. Although this paper considers these approaches within the context of higher education, the approaches and the reasoning behind their application could have transferability to educators at different levels and in different settings.

Theoretical underpinning of entrepreneurship education

The role of educational philosophy and theory in entrepreneurship education.

Understanding underpinning educational philosophical frameworks helps educators better grasp why and how they teach (Hannon 2006 ). Educational philosophies and theories are interlinked and inform pedagogic practice and the learning process of students and therefore it is important for educators to understand these to maximise the effectiveness of their teaching (Bell and Bell 2020 ). However, educator narratives often highlight a limited depth of knowledge and understanding of the underpinning educational philosophies and theories (Fayolle et al. 2016 ). Jones ( 2019 ) has highlighted that a concise philosophy of entrepreneurship education does not exist and Ramsgaard ( 2018 ) suggests that no single philosophy or learning theory can be effective in underpinning the diverse pedagogical approaches involved in entrepreneurship education (Ramsgaard 2018 ). Educational philosophies and theories inform the learning process and can guide educators through the contrasting landscapes of educational approaches (Ramsgaard 2018 ). The educational philosophy chosen informs and guides teaching practice and contributes to professionalism, as having a philosophic orientation differentiates those educators who are aware of what they are doing and why they are doing it (Merriam 1982 ). The underlying philosophy and theory of learning adopted by educators drives their thinking, behaviour, and action, as educators make decisions and act in ways that presuppose certain values and beliefs. Whether or not it is articulated, a philosophical orientation underlies, directs, and drives educator practices (Darkenwald and Merriam 1982 ). Whilst, educators might not explicitly choose a philosophy or theory of learning to underpin their teaching but rather follow a path of least resistance, or subconsciously adopt one, it will still have implications on what they deliver, how they deliver it and how they assess learners.

Within higher education, entrepreneurship education is increasingly being viewed as important for all learners, regardless of learner discipline or future career goals (Bell and Bell 2016 ; O’Brien et al. 2019 ). Even if learners are not planning on starting a business in the near future, the literature has highlighted that entrepreneurialism and entrepreneurial behaviour can support the learner’s employability (Bell 2016 ), which is high on many educational institutions’ agendas (Sewell and Dacre Pool 2010 ). Entrepreneurship education can take many forms and can have a range of educational objectives. Zhang ( 2020 ) highlighted that entrepreneurship education should be viewed as broader than only venture creation and Nabi and Holden ( 2008 ) opined that it might be useful to consider enterprise/entrepreneurship as a spectrum ranging from broad and generic skills relevant to most students, to more specific and specialised skills for entrepreneurs, who may be more interested in starting a business. Different entrepreneurship education approaches have been identified as being able to teach the ‘about’ entrepreneurship which teaches the theory behind entrepreneurship; ‘for’ entrepreneurship which develops learners entrepreneurial skills and competences so that they are ready for potential entrepreneurial endeavours; and ‘through’ entrepreneurship which supports learning by the practicing of entrepreneurship (Hannon 2005 ). Each of the three types of entrepreneurship education achieves different types of learning and provides different benefits to the learner. A grounding in the theory underpinning entrepreneurship and the ‘why’ and ‘how’ to be entrepreneurial can be delivered by an ‘about entrepreneurship approach’. Learners can develop general entrepreneurial skills and competences which can support employability (Bell 2016 ) and enable entrepreneurial behaviours in the future using a ‘for’ entrepreneurship approach; and learning by practice can enable learners to practice entrepreneurial activity using a ‘through’ entrepreneurship approach (Bozward and Rogers-Draycott 2020 ).

The value and purpose of entrepreneurship education is driven by contrasting and often conflicting beliefs, which emanate from deeply rooted philosophical underpinnings (Hannon 2006 ). As entrepreneurship education encompasses a wide range of potential educational goals and objectives, a range of different educational philosophies and theories can be adopted to underpin the approach and pedagogy undertaken. Hannon ( 2006 ) highlighted that to develop and support successful entrepreneurship education a more sophisticated approach which acknowledges the wide educational philosophical and conceptual base is required. It is essential for educators to understand the different educational philosophies and theories that can be used to underpin and ground entrepreneurship education pedagogy and practice, as these inform and provide a deeper understanding of the way to deliver entrepreneurship education and the justification and reasoning behind it (Hannon 2006 ). It is commonly understood that it is important to ensure alignment between the learning objectives of the course, the pedagogy and the assessment (Biggs 2012 ), and by aligning philosophy with learner expectations, requirements, and intended outcomes, it is more likely to lead to an improved learner experience (Hannon 2006 ). The underpinning educational philosophy and theory of learning should be in alignment with what the teaching seeks to impart and achieve, and the roles of the learners and educator in the learning process (Bell and Bell 2020 ). In light of this, it has been highlighted that education scholars have great potential to contribute to the breadth of teaching practices that can be incorporated into contemporary knowledge and literature on entrepreneurship education (Neergaard et al. 2020 ). The following sections of this paper will review and discuss how and why the educational philosophies and learning theories of behaviourism, cognitivism, constructivism, and humanism can used to underpin entrepreneurship education. Importantly, the underpinning educational philosophy and theory of learning should align with the educator’s objectives and the roles of the educator and learners within the learning process.

Behaviourism

The epistemological base of traditional didactic teaching is the view that knowledge is an objective phenomenon, and that reality exists independently of the observer and can be discovered to achieve verifiable facts about the external or real world. In the behaviourist approach, learning is equated with either the form or frequency of observable performance (Ertmer and Newby 2013 ). Educators thus take a behavioural approach that involves efficient and functional mechanical processes (Löbler 2006 ). A behaviourist teaching approach seeks to shape the learner’s growth and development in a particular direction (Bruner 1966 ) and thus does not seek to encourage criticality or judgement (Dewey 2013 ). Repetition, reinforcement, and testing are important teaching elements in this approach. However, a system in which the educator solely provides knowledge for the learner to ‘bank’ can stifle the learner’s creativity (Freire 2006 ). It has also been suggested that the transfer of passive knowledge can lead to learners disengaging or becoming ‘surface learners’ who are only required and able to repeat the information back (Bennett 2006 ; Trigwell et al. 1999 ). Although commonplace in entrepreneurship education, it is increasingly considered limited in its usefulness, specifically for providing theoretical entrepreneurship knowledge and instruction (Gedeon 2014 ). Despite this, education may be delivered passively through expediency and thus is not philosophically or pedagogically informed.

Traditionally, management and business studies were impacted by the pedagogy of economics, which in turn was derived from the teaching practices within natural sciences (Mirowski 1989 ). Pedagogy within such fields were delivered in a mechanistic approach, where the learner would act as an outside observer and would capture abstract theories and models delivered by the educator (Dierksmeier 2011 ). What matters in such an approach is the quantity and quality of the material and knowledge delivered, rather than the quality of the personal experience of the learner (Dierksmeier 2020 ). Knowledge delivered via such an approach can be devoid of context and not related to the previous experiences of the learner. Such behaviourist approaches to entrepreneurship education suggest that entrepreneurs need objectivist knowledge to get their jobs done effectively and efficiently, and that ‘knowing that’ is more important than the ‘know how’.

Behaviourism has been identified as a suitable approach to support the didactic delivery of objectivist knowledge. The role of the educator is to manage, predict and direct the learning outcomes and in so doing, meets the needs of society and industry through compliance with identified standards of skills and behaviour (Hannon 2006 ). It is thus an efficient way of teaching ‘about’ entrepreneurship but is increasingly considered to be more suitable for the teaching of theoretical education and the delivery of instructional information. It can, however, provide the underlying frameworks against which learners can analyse and understand their own experiences in the real world (Jack and Anderson 1999 ; Peltier and Scovotti 2010 ). Similarly, learners undertaking constructivist exercises will need both instructional information and a solid grounding in the topic area that forms the basis of the constructivist learning. Objectivist approaches are needed to provide this background (Bell and Bell 2020 ); and Béchard and Toulouse ( 1998 ) highlighted the need for entrepreneurship educators to use a didactic approach to ensure learners can define and understand the course’s objectives. Behaviourism, however, has limitations in supporting the application of learnt knowledge; cognitivism builds on behaviourism by supporting the processing and application of objectivist knowledge.

• Cognitivism

Learning theories based on the cognitive sciences became popular in the late 1950′s. Cognitivism represented a shift from behaviourism as it considered the psychology behind learning to be a cognitive process, which involves the processing of knowledge, not only the memorisation of it (Brieger et al. 2020 ). As a result, compared to the behaviourist approach the learner plays a more active role in the learning process. The cognitive paradigm posits that objective knowledge can be developed and is drawn from rationalism, and postulates that knowledge can be reached through reasoning or intellectual intuition (Kyrö 2015 ). Cognitivists consider learning to be an internal process that involves the memorisation of information, thinking and reflecting on the information and then abstraction of the information (Ally 2004 ). The cognitive approach equates learning with changes between states of knowledge, and knowledge is considered in terms of internal coding and structuring by the learner through the learning process (Ertmer and Newby 2013 ). Cognitivism is thus focused on individual cognitive processes and the level of cognitive development of the individual being taught (Bandura 1977 ), and learning is the result of learners’ thinking critically in order to process information to create new knowledge. It has an objectivist view that once the knowledge is taught and understood, the knowledge can then be used and transferred into other situations. However, as cognitivist educational theory encourages critical thinking and appraisal of knowledge, it appreciates that no knowledge is truly secure and incontestable over time or in different contexts, and this can motivate learners to continue to learn and challenge existing concepts (Morris 2019a ). Such learning can be suitable for situations where uncertainty and ambiguity exist (Bruner 1966 ), such as within entrepreneurship.

Cognitivist approaches are often adopted to support the development and nurturing of reasoning and critical thinking skills, which can be defined as “thinking that is purposeful, reasoned and goal directed – the kind of thinking that is involved in solving problems, formulating inferences, calculating likelihood, and in making decisions” (Halpern 1996 , p. 5).

Despite the fact that critical thinking has been identified as an essential tool of enquiry (Facione 1990 ), it has been suggested that there is a current lack of emphasis on developing learners’ critical thinking in business and management education (Örtenblad et al. 2013 ). This is despite the fact that Meyers ( 1986 ) argued that critical thinking is a vital skill to allow learners to achieve their full potential and that it has been proposed as a valuable and essential attribute for graduates in the twenty-first century (Huitt 1998 ). Such critical thinking skills and abilities are important within entrepreneurship where entrepreneurs must process existing knowledge to unique and changing scenarios to inform their business decision making.

The focus of the cognitive process is on changing the learner by encouraging them in using appropriate learning strategies. The role of the educator is to facilitate and promote learning as a partner, but not directing it (Hannon 2006 ). To support the learner to assimilate and process information and knowledge, the educator should present this in a clear and linear fashion (Merriam et al. 2007 ).

Cognitivist teaching approaches often include case studies and activities in which critical analysis of the case, or information within the activity, can lead to the development of learners’ critical thinking skills. Kantar ( 2013 ) has highlighted that case-based learning is a popular approach, grounded within a cognitivist approach to teaching, as it allows learners to process and apply their existing knowledge in order to develop critical insights, which promote theoretical understanding. In such learning, a learner’s prior knowledge about a subject is critically applied to a teaching activity (Arghode et al. 2018 ; Chakraborty and Muyia Nafukho 2014 ). Teaching activities and their complexity should be related to the learner’s prior knowledge, to ensure that learners can engage with the teaching activities critically (Brieger et al. 2020 ). For example, if learners are presented with a case study or activity, they should have the knowledge of the concepts within it to critically appraise it and apply their knowledge in order to provide reasoned arguments and judgements. Teaching should therefore focus on the cognitive processes of structuring, storing, and retrieving knowledge, so that it can be critically related and applied to new concepts and scenarios (Brieger et al. 2020 ).

However, in terms of entrepreneurial development, cognitivism does not take into consideration the arguably experiential nature of entrepreneurial learning (Rae 2005 ) that comes as a result of learning from doing and reflecting on the process (Cope 2005 ; Mezirow 1990 ). Therefore, in the context of preparing learners for entrepreneurship, cognitivist approaches are limited as they disregard the importance of developing reflexivity and self-awareness (Ferreira 2020 ). Constructivism has been posited to overcome several of the shortcomings in preparing learners for entrepreneurship, which have been levelled at approaches based on behaviourism and cognitivism.

• Constructivism

The epistemological base of traditional teaching underpinned by behaviourism and cognitivism is that knowledge is an objective phenomenon. This has been increasingly challenged by constructivism and constructivist approaches to learning, that are based on an epistemology of knowledge that is based instead on the subjective understanding of an individual. Constructivism is a theory of knowledge (Gergen 2015 ) which emphasises the role of the individual in creating their own individual meaning from knowledge in relation to their own context and experience (Mueller and Anderson 2014 ). In constructivism, knowledge resides in the individual (Lorsbach and Tobin 1992 ) and learning, and knowledge construction is an active and interpretive process, where meaning-making is dependent on past and present knowledge (Merriam et al. 2007 ). As a result, this changes the role that the educator plays. This approach has challenged the dominant view of knowledge as being objectivist, and how it should be acquired in entrepreneurship education (Löbler 2006 ).

Constructivists argue that individuals play an active role in their knowledge construction and that learning is achieved when they try to make sense of new information or input by filtering it against their past experiences and existing knowledge to build a new knowledge framework and understanding (Snowman and Biehler 2006 ). The new knowledge or skills are internally built on past knowledge and experience. Constructivism is thus based on the active participation of the participant which has led to the creation and development of active learning in real life situations, independent thinking, and the framing of self-questions in the process of discovery (Mathews 2007 ). Jonassen ( 1999 ) argued that the fundamental difference in constructivist learning is that it involves learners solving an issue, question, case, problem, or project which is situated in a real-world context.

It has been suggested that approaches rooted in constructivism are superior for entrepreneurship education (Balan and Metcalfe 2012 ; Kyrö 2015 ), as this can most effectively support experiential learning which is particularly efficacious (e.g., Fuchs et al. 2008 ; Honig 2004 ). Previous research has suggested that constructivist learning is one of the steppingstones for developing entrepreneurial behaviours (Bell 2020a ). As constructivism emphasises the creation of new meaning from new knowledge created through experiences and problem solving, it provides a more effective explanation of how knowledge is created within the fast-moving and dynamic context of entrepreneurship. This means that the learning and meaning-making process is related to the context where the problem solving occurs, which enables a deeper conceptual understanding and an appreciation that a solution will not work in all situations and contexts (Morris 2020 ). Such an approach to learning can prepare learners for entrepreneurship where different solutions are required to meet entrepreneurial challenges and problems depending on the situation and context.

Korsgaard and Anderson ( 2011 ) have suggested that entrepreneurship is both a social and economic process in which networking and social interaction plays a prominent role and Rae ( 2005 ) opined that entrepreneurship and learning are inherently constructivist and social processes. This suggests that a social constructivist approach could effectively underpin entrepreneurship education.

As constructivism emphasises the role of learners in creating their own meaning from knowledge in context (Mueller and Anderson 2014 ), this lends itself to action-based learning through which learners must construct their own interpretations of their world through interactions with their surroundings (Mathews 2007 ). This is particularly relevant in higher education where there is an emphasis on individual self-guided learning in which learners are responsible for their own development. In this approach, learners take part in a constructivist-based active experiential learning process to solve problems presented by the educator (Jonassen 1999 ). Authentic experiences are most effective for learning outcomes and engagement (Macht and Ball 2016 ). The educator must ensure that the process is constructively aligned (Biggs 2012 ), and that learners fully understand the process, the objectives and the assessment procedure if being assessed. The educator provides ‘scaffolding,’ guidance as and when required, to enable learners to undertake the learning process (Hmelo-Silver et al. 2007 ). The learners then reflect on their learning experience, which can be assessed through learner’s reflective logs or accounts. Effective constructivism learning should include reflection to provide meaning to the learner through understanding of the experience (Hägg and Kurczewska 2016 ), and its link to real-world application. Structured approaches to reflection can enhance reflection, particularly if learners are not used to reflection (Platzer et al. 1997 ).

Although these three approaches are utilised most commonly to underpin education (Bélanger 2011 ) and entrepreneurship education (Bell and Bell 2020 ), there remain, however, other underrepresented and underutilised educational philosophies that can bring unique and specific benefits to undergraduate entrepreneurship education, including that of humanism.

Whilst there is yet to be consensus as to an all-encompassing definition of humanistic education and what it involves, there is agreement that humanistic learning environments should support and facilitate the development of the whole person, including their intellectual, socioemotional, and physical development (Aloni 2002 ). The primary concern of humanism is the autonomy and dignity of human beings; it therefore focuses on the learner’s personal choice and commitment to support their development (Billings and Halstead 2019 ). The axiological component of the humanistic philosophy is compassion. This can be manifested in compassion to others, through respectful interpersonal interactions, and more generally to society. This dovetails well with the objectives and behaviours which many higher education institutions seek to distil in their graduating learners.

Humanism promotes the acquisition of value-oriented skills and the development of integrative judgments within learners, whilst de-emphasising the route memorisation of knowledge promoted by behaviourism and analytical specialisation and the focused critical thinking promoted within cognitivism (Freire and Faundez 1989 ; Eisler et al. 1990 ; Solberg et al. 1995 ; Hmelo-Silver 2004 ; Lester et al. 2005 ). Learning from a humanist perspective is seen as a personal act to fulfil development through affective and developmental needs, with a view to becoming self-actualised, mature, and autonomous. The educator thus acts to facilitate the wider development of the whole person, in a liberating environment (Merriam et al. 2007 ).

Within general business education, there has been a humanistic transformation of management pedagogy (Dierksmeier 2016 ), which has supported calls for developing learners’ skills and competencies to help them act in a socially, ecologically, and morally sustainable manner in their future careers (Dierksmeier 2020 ). Within other educational philosophies, there has been limited attention paid to how the education influences the learners, the corporate environments and the society that they will end up in (Morrell and Learmonth 2015 ; Ungaretti et al. 2015 ). A shift to pedagogy underpinned by humanism can provide movement towards the human side of economic agency, rather than traditional economics (Dierksmeier 2016 ), as humanistic education is concerned with promoting social development (Leach 2018 ). There is a developing critical stream of entrepreneurship education research that seeks to highlight alternative ways to underpin and teach entrepreneurship in order to move the field away from supporting the neoliberal paradigm (e.g., Berglund & Verduyn 2018 ; Lackéus 2017 ). Applying a humanistic philosophy to underpin entrepreneurship education can support such a move. Such a movement away from the neoliberal paradigm can help to support entrepreneurship education to be opened up to learners from a wide range of disciplines, especially outside of the business school, allowing them to follow a path of entrepreneurship not focused solely on profit maximisation.

Philosophical assumptions within humanism include that the learner is autonomous, capable of smart decision-making, possessing an urge towards self-actualisation, and are focused on their own growth and development (Elias and Merriam 1995 ; Leach 2018 ). Therefore, the learner can direct their own learning to maximise their own personal growth (Morris 2019b ). It is proposed that such self-directed learning can prepare learners to deal with future challenges inherent in rapidly changing environments (Rogers 1969 ) and can play an important part in entrepreneurial learning. Similar to constructivism, humanism promotes learning through experience and doing, which has widely been proposed as essential for developing entrepreneurs (Jones and Iredale 2010 ).

Underpinning learning and pedagogy with humanism leads to a redefinition of both how learners should learn, and what they should learn, so that in the future they will have the skills and outlook to act in a positive manner (Schaltegger and Wagner 2011 ; Hesselbarth and Schaltegger 2014 ; Greenberg 2015 ). Laasch and Moosmayer ( 2015 ) suggest that humanism provides a transition from the learning of competences to the learning for competence in the ever changing and adapting economic environment. Humanism seeks to move learning from being a socially isolated activity to a more relational activity, and from a perspective of learner’s self-interest to a more community-oriented perspective (Dierksmeier 2020 ). Humanistic learning environments are characterised by relationships, community, respect, and consciousness, and it has been found that the application of these characteristics in the classroom can foster and support the development of post-industrial social skills (Leach 2018 ).

Within a humanistic learning environment, educators demonstrate care by connecting with learners outside of the class through promoting social bonds (Brown 2003 ; Weinstein et al. 2003 ). Educators act as a coach or mentor in the co-learning process (Hannon 2005 ) and engage with discussions about learner’s feelings and support their emotional well-being (Ullucci 2009 ). Such actions have been highlighted as important when supporting learners learning ‘for’ entrepreneurship and ‘through’ entrepreneurship, as supporting learners in these scenarios involves connecting with learners outside of the classroom to ensure that the learners engage with real audiences to develop their entrepreneurial skills and behaviours. Literature also highlights the need to support learners’ emotional well-being to develop resilient learners, as the entrepreneurial learning process commonly involves failure (Shepherd 2004 ; Testa and Frascheri 2015 ), and learning from such failure is important in supporting learners to try again (Kauppinen et al. 2019 ). Failing to control and adequately support learner failures in entrepreneurship education has been posited as a potential ‘dark side’ of entrepreneurship education (Bandera et al. 2020 ). To support learners learning from failure, it is important to engage with learners’ emotions as this can contribute to learners in achieving the learning outcomes, and educators can facilitate this process (Rose et al. 2019 ).

Within humanistic learning environments there should be positive and respectful interactions between peers, in a warm, accepting, and nonthreatening atmosphere (Allender 2001 ). Therefore, it is essential that the educator creates a safe environment where learners respect each other’s views (Leah 2018 ). As in constructivist learning environments the educator should support positive constructive criticism and feedback, although this can be challenging for learners who are not familiar with such an approach (Bell 2020b ).

A growing focus within entrepreneurship education is value creation pedagogy, which focuses on learners learning through creating value to at least one external stakeholder outside their group, class, or school (Lackéus et al. 2016 ). This is in line with the definition of entrepreneurship as it involves acting upon opportunities and ideas and transforming them into value for others (Vestergaard et al. 2012 ), and it enables learners to meet several of the tenets within humanism through designing and directing their own projects, working with communities and building relationships in the pursuit of identifying opportunities and creating value for stakeholders. Such an approach can put less focus on neoliberal economic principles and could more effectively suit contexts where the entrepreneurial learning goals are more social developmental focused, potentially making it more acceptable to educators in non-business disciplines (Lackéus et al. 2016 ) and education in socialist market economies (Bell 2020a ).

Having discussed behaviourism, cognitivism, constructivism, and humanism, and the benefits of these and how they can be applied in the entrepreneurship classroom to underpin pedagogy, the next section will conclude by presenting an overview of some of the practicalities that are involved.

This paper has linked educational philosophy and theory to entrepreneurship education and practice by discussing and highlighting how behaviourism, cognitivism, constructivism, and humanism can be used to underpin and support learning in entrepreneurship education. This has contributed to the literature by meeting calls to provide connections between educational theory and entrepreneurship education practice (Fayolle et al. 2016 ) by providing links between education literature, theory, and learning (Neergaard et al. 2020 ) and conceptualising how educational philosophies and theory can be integrated into entrepreneurship education to support learners (Bell and Bell 2020 ).

It is important for educators to understand the philosophies that underpin entrepreneurship education pedagogy and practice, to have a deeper understanding of how to deliver it and the reasoning behind it (Hannon 2006 ). The educational philosophy and theory of learning chosen by the educator informs and guides the teaching practice which will have implications on what they deliver, how it is delivered, and how they undertake assessment of the learners. The main features of the four approaches discussed in this paper are summarised below.

The traditional behaviourist approach is based on the didactic transmission of objectivist knowledge. Repetition, reinforcement, and the testing of learned facts are common features in this approach. It is a convenient vehicle, based on efficient and functional mechanical processes (Löbler 2006 ). It is efficient for the delivery of factual knowledge and instructional information. However, it can stifle creativity and only requires learners to feed back the information. In entrepreneurship education, it can be used to provide the theory of entrepreneurship, the process, and the value. In this way, it can support the teaching of the ‘about’ entrepreneurship.

Cognitivism builds on behaviourism by supporting the development of objectivist knowledge, but also supports learners to critically analyse problems and situations through the processing of existing knowledge in relation to unique and developing situations to inform decision making. Through this, learners can develop the critical thinking skills that are essential in business and entrepreneurship to support making informed and reasoned assessments to support decision making. Developing critical thinking skills can be part of the teaching ‘for’ entrepreneurship. However, cognitivism alone is likely to struggle to fully prepare learners for entrepreneurship due to its limited ability to help learners to relate experience to knowledge and context through reflection which is important within entrepreneurship. The ability for entrepreneurs to understand ‘how’ and be able to learn from their entrepreneurial experiences has been highlighted as crucial to the entrepreneurial process (Ferreira 2020 ).

Constructivism involves individuals constructing their own meaning on reflection from experience, in relation to their own context and experience. Constructivism builds on cognitivism in that learners need to apply critical thinking skills to solve a problem or task in context, and then produce meaning from the experience through reflection. This can support the development of key entrepreneurial skills ‘for’ entrepreneurship and ‘through’ entrepreneurship depending on the context, the individual, and the experience. ‘Through’ entrepreneurship would involve a real entrepreneurial experience whilst ‘for’ entrepreneurship would involve a less authentic experience designed to develop more general skills. It is widely argued that approaches based on constructivism are the most efficacious for entrepreneurship education (Balan and Metcalfe 2012 ; Kyrö 2015 ).

Humanism is like constructivism in that they both support the development of subjective knowledge; however, humanism provides a different lens to the learning process. Humanism promotes the acquisition of value-oriented skills and the development of integrative judgments within learners. It incorporates personal acts of fulfilment which can include working and engaging with the community. The reduced focus on neo-liberal principles potentially opens entrepreneurship education to a wider audience and greater participation. Like constructivism it can be used both ‘for’ and ‘through’ entrepreneurship depending on the task or context.

Importantly, the underpinning educational approach should be in alignment with what the teaching seeks to impart and achieve, and the roles of the educator and learners within the process. It is worth noting that the four approaches are not necessarily exclusive, and different philosophies and theories of learning can be applied to meet different learning objectives in a course or module. For example, the first part of a session can involve a behaviourist approach and the second part a cognitivist or constructivist approach. Indeed, learning approaches based on the development of subjective knowledge require that learners have an adequate grounding in basic objectivist knowledge first, to ensure learners can undertake the task or experience and are able to critically reflect to allow them to make meaning and learn from the experience. However, challenges can exist when moving away from established traditional didactic teaching approaches focused on delivering objective knowledge, to approaches which support the delivery of subjective knowledge, as this can be unsettling to learners who need to make a transition to the new teaching structures and rituals (Neergaard and Christensen 2017 ). Educators can help and support learners to embrace these new approaches until they become comfortable with the process. Similarly, educators may find embracing new approaches difficult and time consuming at first and may prefer to use traditional approaches (Bell and Liu 2019 ), in which case encouragement and support of the educators may be required. Educators might need to be supported to develop a new mindset when transitioning to different teaching practices (Zhang and Price 2020 ).

Context is also an important consideration and includes age, education, the critical thinking skills of the cohort and whether the course is intra-or extra-curricular. Learners for example, must have adequate knowledge and critical thinking skills and the ability to be self-directed, before moving to constructivist and humanist experiences which support the creation of subjective knowledge. Institutional contexts might also present challenges to the successful implementation of constructivist and humanistic learning environments, where more traditional behaviourist or cognitivist teaching is the norm (Bell and Liu 2019 ). In some institutional contexts, the teaching of more subjective knowledge might need to be delivered through extracurricular activities and events (Cui et al. 2019 ).

Whilst, there is a growing consensus that educational and pedagogic approaches which support the development of subjective knowledge are the most effective within entrepreneurship education, it is essential that learners have the underpinning knowledge and critical thinking skills to support learning within subjective learning processes. This means that often a range of educational philosophies and theories will need to be adopted to underpin teaching and pedagogy which seeks to support different educational objectives and outcomes, to develop learners’ entrepreneurial behaviours for future entrepreneurship and employment. This aligns with the suggestion from Rae ( 2005 ) that entrepreneurship education and entrepreneurial learning requires a holistic lens. It has also been highlighted that it is essential to find a suitable balance between approaches to achieve the desired learning objectives and impact on the learners (Kirby 2004 ).

Limitations and future research

Whilst, this paper outlines how a range of educational approaches can be applied to underpin entrepreneurship education, individual educators will need to determine what the goals and objectives of their educational programs will be, and which educational philosophies and theories are most appropriate for achieving these goals and objectives in their context. Within this paper, the application and pertinence of the philosophies and theories considered have been unpacked in relation to higher education. It may, however, have transferability and be of value to educators in other settings and at other levels. Whilst the educational philosophies and theories might be applicable across a range of contexts and levels, their prominence will likely need to be adjusted to match the different educational goals and cohort characteristics at different levels. It should also be acknowledged that institutional factors and expectations might necessitate a particular educational approach and underpinning philosophy and theory of learning, limiting the ability of the educator to determine their own approach. Additionally, whilst this paper posits the benefits of using a mix of educational philosophies and theories to support the learner’s development in entrepreneurship education, it does not explore how to effectively transition between educational philosophies and theories in the classroom, which would benefit from greater exploration.

Whilst this paper is purely conceptual, it lays the groundwork for empirical research to explore the application of different learning approaches and educational philosophies and theories. Future research could explore how educators and learners embrace humanistic entrepreneurship education processes. Links could also be drawn to the potential benefits (and limitations) of humanistic approaches to entrepreneurship education and how this supports the development of entrepreneurs and entrepreneurial behaviours. The educational philosophies and theories of learning considered in this paper are not exhaustive and the field would still benefit from greater application of philosophy and theory.

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Bell, R. Underpinning the entrepreneurship educator’s toolkit: conceptualising the influence of educational philosophies and theory. Entrep Educ 4 , 1–18 (2021). https://doi.org/10.1007/s41959-020-00042-4

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Article • 11 min read

Entrepreneurial Skills

The skills you need to start a great business.

By the Mind Tools Content Team

Are you thinking about setting up your own business? If the answer is yes, you're not alone. The pandemic may have laid waste to great swathes of industry, but it's fueled an extraordinary surge in startups and new small businesses, as those laid off from affected firms explore new opportunities.

Reports from the U.S., Japan and across Europe show record-breaking levels of business registrations. [1] For example, figures from the U.S. Census Bureau show that new business registrations in July 2020 were 95 percent higher than during the same period in 2019. [2]

But what does it take to be a successful entrepreneur? Whether you've seen an exciting gap in the market, or feel forced to reassess your career following job loss, this article explores the skills you need to make it as an entrepreneur. It also signposts resources that you can use to develop the skills required for success.

What Are Entrepreneurial Skills?

Entrepreneurial skills are those normally associated with being an entrepreneur, although anyone can develop them.

Being an entrepreneur usually means starting and building your own successful business, but people with entrepreneurial skills can thrive within larger organizations, too.

Many researchers have studied entrepreneurial skills, but found no definitive answers. Some common themes are:

• Personal characteristics.
• Interpersonal skills.
• Critical and creative-thinking skills.
• Practical skills and knowledge.

Regardless of how you define it, entrepreneurship isn't easy. So be prepared to do the "hard yards," even after you've learned the skills we describe below.

The following sections examine each skill area in more detail, and look at some of the questions you'll need to ask yourself if you want to become a successful entrepreneur.

The Personal Characteristics of an Entrepreneur

Do you have the mindset to be a successful entrepreneur? For example, entrepreneurs tend to be strongly innovative in outlook, and they may take risks that others would avoid.

Examine your own personal characteristics, values and beliefs, and ask yourself these questions:

• Optimism: Are you an optimistic thinker? Optimism is an asset, and it will help you through the tough times that many entrepreneurs experience as they find a business model that works for them.
• Initiative: Do you have initiative, and instinctively start problem-solving or business-improvement projects?
• Drive and persistence: Are you self-motivated and energetic? And are you prepared to work hard, for a very long time, to realize your goals?
• Risk tolerance: Are you able to take risks, and make decisions when facts are uncertain?
• Resilience: Are you resilient, so that you can pick yourself up when things don't go as planned? And do you learn and grow from your mistakes and failures? (If you avoid taking action because you're afraid of failing, our article, Overcoming Fear of Failure , can help you to face your fears and move forward.)

Entrepreneurial Interpersonal Skills

As an entrepreneur, you'll likely have to work closely with others – so it's essential that you're able to build good relationships with your team, customers, suppliers, shareholders, investors, and other stakeholders.

Some people are more gifted in this area than others, but you can learn and improve these skills.

Evaluate your people skills by taking our How Good Are Your People Skills? self-test.

The types of interpersonal skills you'll need include:

• Leadership and motivation: Can you lead and motivate others to follow you and deliver your vision? And are you able to delegate work to other people? As an entrepreneur, you'll have to depend on others to get beyond the early stages of your business – there's just too much to do by yourself!
• Communication skills: Are you skilled in all types of communication? You need to be able to communicate well to sell your vision of the future to a wide variety of audiences, including investors, potential clients and team members.
• Listening: Do you hear what others are telling you? Your ability to listen and absorb information and opinions can make or break you as an entrepreneur. Make sure that you're skilled at active and empathic listening .
• Personal relationships: Do you have good "people skills"? Are you self-aware, good at regulating your emotions, and able to respond positively to feedback or criticism? Our article, Emotional Intelligence , offers a range of strategies for developing these crucial attributes.
• Negotiation: Are you a strong negotiator? Not only do you need to negotiate favorable prices, but you'll also need to resolve differences between people in a positive, mutually beneficial way.
• Ethics: Do you deal with people based on respect, integrity, fairness, and trust? Can you lead ethically? You'll find it difficult to build a happy, productive business if you deal with staff, customers or suppliers in a shabby way.

Many startups are single-owner ventures, or small numbers of friends or family members looking to make it together. For information on how to work or manage in these micro- or family enterprises, see these useful Mind Tools resources:

• How to Manage People in a Micro Business
• Working in a Family Business
• Managing in a Family Business
• Working for a Small Business

Critical and Creative-Thinking Skills for Entrepreneurs

As an entrepreneur, you need to come up with fresh ideas, and make good decisions about opportunities and potential projects.

Many people think that you're either born creative or you're not. But creativity is a skill that you can develop, and there are many tools available to inspire you.

• Creative thinking: Are you able to see situations from a variety of perspectives to generate original ideas? Tools like the Reframing Matrix can help you to do this.
• Problem solving: You'll need sound strategies for solving business problems that will inevitably arise. Tools such as Cause & Effect Analysis , the 5 Whys technique, and CATWOE are a good place to start.
• Recognizing opportunities: Do you recognize opportunities when they present themselves? Can you spot a trend? And are you able to create a workable plan to take advantage of the opportunities you identify?

Practical Entrepreneurial Skills and Knowledge

Entrepreneurs also need solid practical skills and knowledge to produce goods or services effectively, and to run a company.

• Goal setting: Setting SMART goals (Specific, Measurable, Achievable, Relevant, and Time-Bound) will focus your efforts and allow you to use your time and resources more effectively.
• Planning and organizing: Do you have the talents, skills and abilities necessary to achieve your goals? Can you coordinate people to achieve these efficiently and effectively? Strong project-management skills are important, as are basic organization skills. And you'll need a coherent, well thought-out business plan , and the appropriate financial forecasts .
• Decision making: Your business decisions should be based on good information, evidence, and weighing up the potential consequences. Core decision-making tools include Decision Tree Analysis, Grid Analysis, and Six Thinking Hats .

Take our self-test, How Good Is Your Decision Making? , to learn more.

You need knowledge in many different areas when you're starting or running a business, so be prepared for some serious learning!

Be sure to include:

• Business knowledge: Ensure that you have a working knowledge of the main functional areas of a business: sales, marketing, finance, and operations. If you can't fulfilll all these functions yourself, you'll need to hire others to work with you, and manage them competently.
• Entrepreneurial knowledge: How will you fund your business, and how much capital do you need to raise? Finding a business model that works for you can require a long period of experimentation and hard work.
• Opportunity-Specific Knowledge: Do you understand the market you're attempting to enter, and do you know what you need to do to bring your product or service to market?
• Venture-Specific Knowledge: Do you know what it takes to make this type of business successful? And do you understand the specifics of the business that you want to start?

You can also learn from others who've worked on projects similar to the ones that you're contemplating, or find a mentor – someone else who's been there before and is willing to coach you.

As an entrepreneur, you must also learn the rules and regulations that apply in the territory or territories that you're operating in. These websites may be useful:

• Australia – Business.gov.au
• Canada – Canada Business Network
• India – startupindia
• United Kingdom – GOV.UK
• United States – U.S. Small Business Administration

Working in a business like the one you want to launch is a great way to learn the ropes. But be aware of non-compete clauses in your employment contract. In some jurisdictions, these clauses can be very restrictive. You don't want to risk your future projects by violating the rights of another entrepreneur or organization.

Is Entrepreneurship Right for You?

Before you proceed with your plan to become an entrepreneur, assess your skills against all of the questions and considerations above. Use a Personal SWOT Analysis to examine your Strengths and Weaknesses, your Opportunities, and the Threats that you may face.

Be honest with yourself about your motivations and the level of commitment you're prepared to give to your project. This could prevent you from making a costly mistake.

As you work through your analysis, you may feel that you're ready to plunge into your exciting new venture. Alternatively, you may decide to wait and further develop your skills. You may even decide that entrepreneurship isn't for you after all.

Becoming an entrepreneur is an important career decision, so avoid the temptation to act impulsively. Do your homework. Reflect on your needs, your objectives, and your financial and personal circumstances. Entrepreneurialism can take a huge amount of time and dedication, so make sure that it feels right.

While there's no single set of traits or skills for being a successful entrepreneur, there are many that you can learn to help you succeed.

These can be divided into four broad categories:

Examine your own strengths and weaknesses in these areas and assess the time and commitment you'll need to get "up to speed."

Take time to decide whether this is the right path for you.

[1] Forbes (2021). Pandemic Fuels Global Growth Of Entrepreneurship And Startup Frenzy [online]. Available here . [Accessed May 23, 2022.]

[2] U.S. Census Bureau. Business Formation Statistics [online]. Available here . [Accessed May 23, 2022.]

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6.1 Problem Solving to Find Entrepreneurial Solutions

Portions of the material in this section are based on original work by Geoffrey Graybeal and produced with support from the Rebus Community. The original is freely available under the terms of the CC BY 4.0 license at https://press.rebus.community/media-innovation-and-entrepreneurship/.

Learning Objectives

By the end of this section, you will be able to:

• Define problem solving in the context of entrepreneurship
• Describe and compare the adaptive model and the innovative model of problem solving
• Identify the skills entrepreneurs need for effective problem solving
• Identify types of problem solvers

As you’ve learned, entrepreneurs often visualize an opportunity gap, a gap between what exists and what could exist, as Hirabayashi and Lidey did with Shine. Entrepreneurial problem solving is the process of using innovation and creative solutions to close that gap by resolving societal, business, or technological problems. Sometimes, personal problems can lead to entrepreneurial opportunities if validated in the market. The entrepreneur visualizes the prospect of filling the gap with an innovative solution that might entail the revision of a product or the creation of an entirely new product. In any case, the entrepreneur approaches the problem-solving process in various ways. This chapter is more about problem solving as it pertains to the entrepreneur’s thought process and approach rather than on problem solving in the sense of opportunity recognition and filling those gaps with new products.

For example, as we read in Identifying Entrepreneurial Opportunity , Sara Blakely (as shown in Figure 6.2 ) saw a need for body contouring and smoothing undergarments one day in the late 1990s when she was getting dressed for a party and couldn’t find what she needed to give her a silhouette she’d be pleased with in a pair of slacks. She saw a problem: a market need. But her problem-solving efforts are what drove her to turn her solution (Spanx undergarments) into a viable product. Those efforts came from her self-admitted can-do attitude: “It’s really important to be resourceful and scrappy—a glass half-full mindset.” 1 Her efforts at creating a new undergarment met resistance with hosiery executives, most of whom were male and out of touch with their female consumers. The hosiery owner who decided to help Blakely initially passed on the idea until running it by his daughters and realizing she was on to something. That something became Spanx , and today, Blakely is a successful entrepreneur. 2

Before getting into the heart of this chapter, we need to make a distinction: Decision making is different from problem solving . A decision is needed to continue or smooth a process affecting the operation of a firm. It can be intuitive or might require research and a long period of consideration. Problem solving , however, is more direct. It entails the solution of some problem where a gap exists between a current state and a desired state. Entrepreneurs are problem solvers who offer solutions using creativity or innovative ventures that exploit opportunities. This chapter focuses on different approaches to problem solving and need recognition that help potential entrepreneurs come up with ideas and refine those ideas.

Two Problem Solving Models: Adaptive and Innovative

There are two prominent established problem-solving models: adaptive and innovative . A renowned British psychologist, Michael Kirton , developed the Kirton Adaption-Innovation (KAI) Inventory to measure an individual’s style of problem solving. 3 Problem-solving preferences are dependent on the personality characteristics of originality, conformity, and efficiency, according to Kirton. The KAI inventory identifies an individual’s problem-solving approach by measuring agreement with statements that align with characteristics, such as the ability to produce many novel ideas, to follow rules and get along in groups, and to systematically orient daily behavior. The results categorize an individual as an innovator or an adaptor. Innovators are highly original, do not like to conform, and value efficiency less than adaptors.

The first and more conservative approach an entrepreneur may use to solve problems is the adaptive model. The adaptive model seeks solutions for problems in ways that are tested and known to be effective. An adaptive model accepts the problem definition and is concerned with resolving problems rather than finding them. This approach seeks greater efficiency while aiming at continuity and stability. The second and more creative approach is the innovative model of entrepreneurial problem solving, which uses techniques that are unknown to the market and that bring advantage to an organization. An innovative problem-solving style challenges the problem definition, discovers problems and avenues for their solutions, and questions existing assumptions—in a nutshell, it does things differently. It uses outside-the-box thinking and searches for novel solutions. Novelty is a shared trait of creative entrepreneurship, and it’s why entrepreneurs gravitate toward this method of problem solving. According to Dr. Shaun M. Powell , a senior lecturer at the University of Wollongong, Australia: “Creative entrepreneurs are notable for a distinctive management style that is based on intuition, informality and rapid decision making, whereas the more conventional thinking styles are not in accord with the unique attributes of creative entrepreneurs.” 4 This way of problem solving doesn’t alter an existing product. It is the creation of something entirely new.

For example, healthcare facilities have long been known as a source of methicillin-resistant Staphylococcus aureus (MRSA), a deadly infection that can have long-term effects on patients. Vital Vio , led by Colleen Costello , has developed white light technology that effectively disinfects healthcare facilities by targeting a molecule specific to bacteria. The light, safe to humans, can burn constantly to kill regenerative bacteria. An adaptive problem-solving model would seek to minimize harm of MRSA within a hospital—to respond to it—whereas the Vital Vio is an entirely new technique that seeks to eliminate it. Adaptive solutions to MRSA include established processes and protocols for prevention, such as having doctors, nurses, and other healthcare providers clean their hands with soap and water, or an alcohol-based hand rub before and after patient care, testing patients to see if they have MRSA on their skin, cleaning hospital rooms and medical equipment, and washing and drying clothes and bed linens in the warmest recommended temperatures. 5

Link to Learning

Visit Inc. Magazine for support and advice for up-and-coming startups to learn more. Examples of how “Dorm Room” entrepreneurs spot and pursue opportunities are shared along with tips and advice for making your startup a success.

Problem-Solving Skills

While identifying problems is a necessary part of the origin of the entrepreneurial process, managing problems is an entirely different aspect once a venture is off the ground and running. An entrepreneur does not have the luxury of avoiding problems and is often responsible for all problem solving in a startup or other form of business. There are certain skills that entrepreneurs possess that make them particularly good problem solvers. Let’s examine each skill (shown in Figure 6.3 ) .

Critical Thinking

Critical thinking is the complex analysis of a problem or issue with the goal of solving the problem or making a decision. The entrepreneur analyzes and peels away the layers of a problem to find the core of an issue facing a business. The entrepreneur focuses on the heart of the problem and responds reasonably and openly to suggestions for solving it. Critical thinking is not only important for developing entrepreneurial ideas: it is a sought-after asset in education and employment. Entrepreneur Rebecca Kantar dropped out of Harvard in 2015 to found the tech startup Imbellus , which aims to replace standardized college admissions tests like the SAT with interactive scenarios that test critical-thinking skills. Many standardized tests may include multiple choice questions asking for the answer to a straightforward knowledge question or math problem. Kantar seeks to create tests that are more concerned with the analytic ability and reasoning that goes into the process of solving the problem. Imbellus says it aims to test “how people think,” not just what they know. The platform, which has not yet launched, will use simulations for its user assessments. 6

Read more about problem solving and EnterpriseWorks/Vita’s story at Harvard Business Review .

Communication

Communication skills , the ability to communicate messages effectively to an intended recipient, are the skills entrepreneurs use to pool resources for the purposes of investigating solutions leading to innovative problem solving and competitive advantage. Good communication allows for the free association of ideas between entrepreneurs and businesses. It can illustrate a problem area or a shared vision, and seeks stakeholder buy-in from various constituencies. Networking and communication within an industry allow the entrepreneur to recognize the position of an enterprise in the market and work toward verbalizing solutions that move an organization beyond its current state. By “verbalizing,” we mean communication from and with the company/entity. Internal communications include company emails, newsletters, presentations, and reports that can set strategic goals and objectives, and report on what has been accomplished and what goals and objectives remain, so that employees within an organization are knowledgeable and can work on solving problems that remain within the organization. External communications could include press releases, blogs and websites, social media, public speeches, and presentations that explain the company’s solutions to problems. They could also be investor pitches complete with business plans and financial projections.

Ideation exercises, such as brainstorming sessions (discussed in Creativity, Innovation, and Invention , are good communication tools that entrepreneurs can use to generate solutions to problems. Another such tool is a hackathon —an event, usually hosted by a tech company or organization, which brings together programmers and workers with other degrees of specialization within the company, community, or organization to collaborate on a project over a short period of time. These can last from twenty-four hours to a few days over a weekend. A hackathon can be an internal company-wide initiative or an external event that brings community participants together. A business model canvas , which is covered in Business Model and Plan and other activities outlined in other chapters can be used internally or externally to identify problems and work toward creating a viable solution.

Networking is an important manifestation of useful communication. What better method is there of presenting one’s concept, gaining funding and buy-in, and marketing for the startup than through building a network of individuals willing to support your venture? A network may consist of potential employees, customers, board members, outside advisors, investors, or champions (people who just love your product) with no direct vested interest. Social networks consist of weak ties and strong ties. Sociologist Mark Granovetter studied such networks back in the 1970s, and his findings still apply today, even if we include social media networks in the definition too. Weak ties facilitate flow of information and community organization, he said, whereas strong ties represent strong connections among close friends, family members, and supportive coworkers. 7 Strong ties require more work to maintain than weak ties (as illustrated by the strong lines and weak dotted lines in Figure 6.4 ) and in a business context, they don’t lead to many new opportunities. Weak ties, in contrast, do open doors in that they act as bridges to other weak ties within functional areas or departments that you might not have had access to directly or through strong ties. 8

In fact, many young entrepreneurs, including tech entrepreneur Oliver Isaacs , realize college is a great place to begin building teams. Isaacs is the founder of viral opinion network Amirite.com , which is widely credited as the place where Internet memes started and online slang got a foothold. 9 Amirite.com consists of a large network of pages and partnerships on Facebook and Instagram that reach 15 million users each month. Isaacs recommends using your alumni network to build a team and customer base for your own venture because you never know if you’re talking to a future employee or partner.

Sharing of ideas and resources is highly valued in the entrepreneurial process. Communication is a vital skill in problem solving because the ability to identify and articulate the problem (define the problem space) is necessary to adequately address a problem. A problem can be too vague or broad or narrow. Thus, communicating the problem is important, as is conveying the solution.

Decisiveness

Decisiveness is as it sounds: the ability to make a quick, effective decision, not letting too much time go by in the process. Entrepreneurs must be productive, even in the face of risk. They often rely on intuition as well as on hard facts in making a choice. They ask what problem needs to be solved, think about solutions, and then consider the means necessary to implement an idea. And the decisions must be informed with research.

For example, as explained in Adam Grant’s book The Originals , the co-founders of Warby Parker, a venture-backed startup focused on the eyewear industry, started their company while they were graduate students. At the time they knew little about the industry, but after conducting some detailed research, they learned that the industry was dominated by one major player—Luxottica. They used this information and other data to refine their strategy and business model (focusing mainly on value, quality, and convenience via an online channel). By the time they decided to launch the business, they had thought through the key details, and they attained rapid early success. Today Warby Parker has over 100 retail stores in the US, is profitable, and is valued at almost $2 billion.

Decisiveness is the catapult to progress. Amazon founder Jeff Bezos preaches the importance of decisiveness throughout his organization. Bezos believes that decisiveness can even lead to innovation. Bezos advocates for making decisions after obtaining 70 percent of the information you need to do so: “Being wrong may be less costly than you think, whereas being slow is going to be expensive for sure,” Bezos wrote in a 2017 annual letter to stockholders. 10

Read this LinkedIn blog post on decisiveness to learn more.

Ability to Analyze Data

Data analysis is the process of analyzing data and modeling it into a structure that leads to innovative conclusions. Identifying Entrepreneurial Opportunity covered much of the sources of data that entrepreneurs might seek. But it is one thing to amass information and statistics. It is another to make sense of that data, to use it to fill a market need or forecast a trend to come. Successful founders know how to pose questions about and make meaning out of information. And if they can’t do that themselves, they know how to bring in experts who can.

In addition to public sources of broad data, a business can collect data on customers when they interact with the company on social media or when they visit the company website, especially if they complete a credit card transaction. They can collect their own specific data on their own customers, including location, name, activity, and how they got to the website. Analyzing these data will give the entrepreneur a better idea about the interested audience’s demographic.

In entrepreneurship, analyzing data can help with opportunity recognition, creation, and assessment by analyzing data in a variety of ways. Entrepreneurs can explore and leverage different data sources to identify and compare “attractive” opportunities, since such analyses can describe what has happened, why it happened, and how likely it is to happen again in the future. In business in general, analytics is used to help managers/entrepreneurs gain improved insight about their business operations/emerging ventures and make better, fact-based decisions.

Analytics can be descriptive, predictive, or prescriptive. Descriptive analytics involves understanding what has happened and what is happening; predictive analytics uses data from past performance to estimate future performance; and prescriptive analytics uses the results of descriptive and predictive analytics to make decisions. Data analysis can be applied to manage customer relations, inform financial and marketing activities, make pricing decisions, manage the supply chain, and plan for human resource needs, among other functions of a venture. In addition to statistical analysis, quantitative methods, and computer models to aid decision-making, companies are also increasingly using artificial intelligence algorithms to analyze data and make quick decisions.

Understanding of Business and Industry

Entrepreneurs need sound understanding of markets and industries. Often times, they are already working in a large organization when they see growth opportunities or inefficiencies in a market. The employee gains a deep understanding of the industry at hand. If the employee considers a possible solution for a problem, this solution might become the basis for a new business.

For example, consider a marketing agency that used traditional marketing for thirty years. This agency had an established clientele. An executive in the organization began studying social media analytics and social media. The executive approached the owner of the business to change processes and begin serving clients through social media, but the owner refused. Clients within the agency began to clamor for exposure on social media. The marketing executive investigated the possibility of building an agency in her locale servicing clients who wish to utilize social media. The marketing executive left the organization and started her own agency (providing, of course, that this is in compliance with any noncompete clauses in her contract). Her competitive advantage was familiarity with both traditional and social media venues. Later, the original agency started floundering because it did not offer social media advertising. Our intrepid executive purchased the agency to gain the clientele and serve those wishing to move away from traditional marketing.

A similar experience occurred for entrepreneur Katie Witkin . After working in traditional marketing roles, the University of Wisconsin-Madison graduate, pictured in Figure 6.5 , left agency life behind four years out of college to cofound her own company, AGW Group . In 2009, Witkin had been interning at a music marketing agency that didn’t have a social media department. She knew, both from her time at college and from observing industry trends, that social media was changing the way companies connected with customers. For her own venture, she expanded the focus to all supporting brands to manage all things digital. Today, the cultural and marketing communications agency has fifteen employees and big-name clients ranging from HBO to Red Bull. 11

Resourcefulness

Resourcefulness is the ability to discover clever solutions to obstacles. Sherrie Campbell , a psychologist, author, and frequent contributor to Entrepreneur magazine on business topics, put it this way:

“There is not a more useful or important trait to possess than resourcefulness in the pursuit of success. Resourcefulness is a mindset, and is especially relevant when the goals you have set are difficult to achieve or you cannot envision a clear path to get to where you desire to go. With a resourcefulness mindset you are driven to find a way. An attitude of resourcefulness inspires out-of-the-box thinking, the generation of new ideas, and the ability to visualize all the possible ways to achieve what you desire. Resourcefulness turns you into a scrappy, inventive and enterprising entrepreneur. It places you a cut above the rest.” 12

Entrepreneurs start thinking about a business venture or startup by talking to people and procuring experts to help create, fund, and begin a business. Entrepreneurs are risk takers, passionate about new endeavors. If they don’t have a college degree or a great deal of business experience, they understand there are many resources available to support them in the endeavor, such as the Service Corps of Retired Executives (SCORE) and the Small Business Administration (SBA) . There are many sources available to fund the business with little or no debt and options, as you will see in the chapter on Entrepreneurial Finance and Accounting . The entrepreneur follows a vision and researches opportunities to move toward a dream.

For example, in the late 1990s, Bill McBean and his business partner Billy Sterett had an opportunity to buy an underperforming auto dealership that would make their company the dominant one in the market. Neither wanting to take cash from other ventures nor wanting to borrow more money and tie themselves to more debt, the entrepreneurs were resourceful by finding another path forward to obtaining the money necessary for the acquisition they both coveted. They changed banks and renegotiated their banking payback requirements, lowering their interest payments, reducing fees, and lowering their monthly payments, ultimately freeing up a significant amount of cash that allowed them to buy the new company. 13

Types of Problem Solvers

Entrepreneurs have an insatiable appetite for problem solving. This drive motivates them to find a resolution when a gap in a product or service occurs. They recognize opportunities and take advantage of them. There are several types of entrepreneurial problem solvers, including self-regulators, theorists, and petitioners.

Self-Regulating Problem Solvers

Self-regulating problem solvers are autonomous and work on their own without external influence. They have the ability to see a problem, visualize a possible solution to the problem, and seek to devise a solution, as Figure 6.6 illustrates. The solution may be a risk, but a self-regulating problem solver will recognize, evaluate, and mitigate the risk. For example, an entrepreneur has programmed a computerized process for a client, but in testing it, finds the program continually falls into a loop, meaning it gets stuck in a cycle and doesn’t progress. Rather than wait for the client to find the problem, the entrepreneur searches the code for the error causing the loop, immediately edits it, and delivers the corrected program to the customer. There is immediate analysis, immediate correction, and immediate implementation. The self-regulating problem solvers’ biggest competitive advantage is the speed with which they recognize and provide solutions to problems.

Theorist Problem Solvers

Theorist problem solvers see a problem and begin to consider a path toward solving the problem using a theory. Theorist problem solvers are process oriented and systematic. While managers may start with a problem and focus on an outcome with little consideration of a means to an end, entrepreneurs may see a problem and begin to build a path with what is known, a theory, toward an outcome. That is, the entrepreneur proceeds through the steps to solve the problem and then builds on the successes, rejects the failures, and works toward the outcome by experimenting and building on known results. At this point, the problem solver may not know the outcome, but a solution will arise as experiments toward a solution occur. Figure 6.7 shows this process.

For example, if we consider Marie Curie as an entrepreneur, Curie worked toward the isolation of an element. As different approaches to isolating the element failed, Curie recorded the failures and attempted other possible solutions. Curie’s failed theories eventually revealed the outcome for the isolation of radium. Like Curie, theorists use considered analysis, considered corrective action, and a considered implementation process. When time is of the essence, entrepreneurs should understand continual experimentation slows the problem-solving process.

Petitioner Problem Solvers

Petitioner problem solvers ( Figure 6.8 ) see a problem and ask others for solution ideas. This entrepreneur likes to consult a person who has “been there and done that.” The petitioner might also prefer to solve the problem in a team environment. Petitioning the entrepreneurial team for input ensures that the entrepreneur is on a consensus-driven path. This type of problem solving takes the longest to complete because the entrepreneur must engage in a democratic process that allows all members on the team to have input. The process involves exploration of alternatives for the ultimate solution. In organizational decision-making, for example, comprehensiveness is a measure of the extent a firm attempts to be inclusive or exhaustive in its decision-making. Comprehensiveness can be gauged by the number of scheduled meetings, the process by which information is sought, the process by which input is obtained from external sources, the number of employees involved, the use of specialized consultants and the functional expertise of the people involved, the years of historical data review, and the assignment of primary responsibility, among other factors. Comprehensive decision-making would be an example of a petitioner problem-solving style, as it seeks input from a vast number of team members.

A charette —a meeting to resolve conflicts and identify solutions—is another example that employs a petitioner problem-solving approach. Often times, a developer of a new project might hold a community charette to aid in the design of a project, hoping to gain approval from elected officials. In the building example, this could consist of the developer and his team of architects, project designers, and people with expertise in the project working alongside community members, business executives, elected officials, or representatives like staff members or citizen-appointed boards like a planning board. Such an activity is representative of a petitioner problem-solving approach, as opposed to a developer representative designing the project with no input from anyone else.

In summary, there is no right or wrong style of problem solving; each problem solver must rely on the instincts that best drive innovation. Further, they must remember that not all problem-solving methods work in every situation. They must be willing to adapt their own preference to the situation to maximize efficiency and ensure they find an effective solution. Attempting to force a problem-solving style may prevent an organization from finding the best solution. While general entrepreneurial problem-solving skills such as critical thinking, decisiveness, communication, and the ability to analyze data will likely be used on a regular basis in your life and entrepreneurial journey, other problem-solving skills and the approach you take will depend on the problem as it arises.

There are a number of resources online that can help analyze your problem-solving abilities. Mindtools.com is one such resource. These are useful to learn your general problem-solving tendencies before being called upon to apply them in a real-world setting. One of the problem-solving techniques available from mindtools.com offers that problems can be addressed from six different perspectives. Called CATWOE , the approach is an acronym for Customers, Actors (people within the organization), Transformative, Worldwide, Owner, and Environment (organizational).

Learn more about the CATWOE technique for problem solving.

• 1 Helen Lock. “‘I Put My Butt on the Line’: How Spanx Took Over the World.” The Guardian. July 11, 2016. https://www.theguardian.com/small-business-network/2016/jul/11/put-butt-on-the-line-how-spanx-world
• 2 Gary Keller. “Business Success Series, Part 1: Sara Blakely-Spanx.” The One Thing. n.d. https://www.the1thing.com/blog/the-one-thing/business-success-series-part-1-sara-blakely-spanx/
• 3 “Characteristics of Adaptors and Innovators.” Kirton KAI Inventory Tool . n.d. http://pubs.acs.org/subscribe/archive/ci/31/i11/html/11hipple_box3.ci.html
• 4 Shaun Powell. “The Management and Consumption of Organisational Creativity.” Journal of Consumer Marketing 25, no. 3 (2008): 158–166.
• 5 N.C Healthcare-Associated Infections Prevention Program. Healthcare-Associated Infections in North Carolina: 2014 Annual Report, Healthcare Consumer Version. April 2015. https://epi.dph.ncdhhs.gov/cd/hai/figures/hai_apr2015_consumers_annual.pdf
• 6 Romesh Ratnesar. “What If Instead of Taking the SAT You Got to Play a Video Game?” Bloomberg BusinessWeek. March 19, 2019. https://www.bloomberg.com/news/features/2019-03-19/a-harvard-dropout-s-plan-to-fix-college-admissions-with-video-games
• 7 Mark Granovetter. “The Strength of Weak Ties.” American Journal of Sociology 5 (1973): 1360–1380.
• 8 Jacob Morgan. “Why Every Employee Should Be Building Weak Ties at Work.” Forbes. March 11, 2014. https://www.forbes.com/sites/jacobmorgan/2014/03/11/every-employee-weak-ties-work/#277851063168
• 9 John White. “Top UK Influencer Oliver Isaacs Reveals What It Takes to Go Viral.” Inc . August 6, 2017. https://www.inc.com/john-white/top-uk-influencer-oliver-isaacs-reveals-what-it-ta.html
• 10 Erik Larson. “How Jeff Bezos Uses Faster Better Decisions to Keep Amazon Innovating.” Forbes . September 24, 2018. https://www.forbes.com/sites/eriklarson/2018/09/24/how-jeff-bezos-uses-faster-better-decisions-to-keep-amazon-innovating/#492c351b7a65
• 11 Stephanie Schomer. “How Getting Laid Off Empowered This Entrepreneur to Start Her Own Award-Winning Marketing Agency.” Entrepreneur. January 15, 2019. https://www.entrepreneur.com/article/326212
• 12 Sherrie Campbell. “6 Characteristics of Resourceful People That Bring Them Success.” Entrepreneur. March 10, 2016. https://www.entrepreneur.com/article/272171
• 13 “Resourcefulness Is More Important Than Resources.” The Ecommerce Mindset: How Successful Store Owners Think. n.d. https://www.oberlo.com/ebooks/mindset/resourceful-entrepreneur

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Critical Thinking: A Simple Guide and Why It’s Important

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Critical Thinking: A Simple Guide and Why It’s Important was originally published on Ivy Exec .

Strong critical thinking skills are crucial for career success, regardless of educational background. It embodies the ability to engage in astute and effective decision-making, lending invaluable dimensions to professional growth.

At its essence, critical thinking is the ability to analyze, evaluate, and synthesize information in a logical and reasoned manner. It’s not merely about accumulating knowledge but harnessing it effectively to make informed decisions and solve complex problems. In the dynamic landscape of modern careers, honing this skill is paramount.

The Impact of Critical Thinking on Your Career

☑ problem-solving mastery.

Visualize critical thinking as the Sherlock Holmes of your career journey. It facilitates swift problem resolution akin to a detective unraveling a mystery. By methodically analyzing situations and deconstructing complexities, critical thinkers emerge as adept problem solvers, rendering them invaluable assets in the workplace.

☑ Refined Decision-Making

Navigating dilemmas in your career path resembles traversing uncertain terrain. Critical thinking acts as a dependable GPS, steering you toward informed decisions. It involves weighing options, evaluating potential outcomes, and confidently choosing the most favorable path forward.

☑ Enhanced Teamwork Dynamics

Within collaborative settings, critical thinkers stand out as proactive contributors. They engage in scrutinizing ideas, proposing enhancements, and fostering meaningful contributions. Consequently, the team evolves into a dynamic hub of ideas, with the critical thinker recognized as the architect behind its success.

☑ Communication Prowess

Effective communication is the cornerstone of professional interactions. Critical thinking enriches communication skills, enabling the clear and logical articulation of ideas. Whether in emails, presentations, or casual conversations, individuals adept in critical thinking exude clarity, earning appreciation for their ability to convey thoughts seamlessly.

☑ Adaptability and Resilience

Perceptive individuals adept in critical thinking display resilience in the face of unforeseen challenges. Instead of succumbing to panic, they assess situations, recalibrate their approaches, and persist in moving forward despite adversity.

☑ Fostering Innovation

Innovation is the lifeblood of progressive organizations, and critical thinking serves as its catalyst. Proficient critical thinkers possess the ability to identify overlooked opportunities, propose inventive solutions, and streamline processes, thereby positioning their organizations at the forefront of innovation.

☑ Confidence Amplification

Critical thinkers exude confidence derived from honing their analytical skills. This self-assurance radiates during job interviews, presentations, and daily interactions, catching the attention of superiors and propelling career advancement.

So, how can one cultivate and harness this invaluable skill?

✅ developing curiosity and inquisitiveness:.

Embrace a curious mindset by questioning the status quo and exploring topics beyond your immediate scope. Cultivate an inquisitive approach to everyday situations. Encourage a habit of asking “why” and “how” to deepen understanding. Curiosity fuels the desire to seek information and alternative perspectives.

✅ Practice Reflection and Self-Awareness:

Engage in reflective thinking by assessing your thoughts, actions, and decisions. Regularly introspect to understand your biases, assumptions, and cognitive processes. Cultivate self-awareness to recognize personal prejudices or cognitive biases that might influence your thinking. This allows for a more objective analysis of situations.

✅ Strengthening Analytical Skills:

Practice breaking down complex problems into manageable components. Analyze each part systematically to understand the whole picture. Develop skills in data analysis, statistics, and logical reasoning. This includes understanding correlation versus causation, interpreting graphs, and evaluating statistical significance.

✅ Engaging in Active Listening and Observation:

Actively listen to diverse viewpoints without immediately forming judgments. Allow others to express their ideas fully before responding. Observe situations attentively, noticing details that others might overlook. This habit enhances your ability to analyze problems more comprehensively.

✅ Encouraging Intellectual Humility and Open-Mindedness:

Foster intellectual humility by acknowledging that you don’t know everything. Be open to learning from others, regardless of their position or expertise. Cultivate open-mindedness by actively seeking out perspectives different from your own. Engage in discussions with people holding diverse opinions to broaden your understanding.

✅ Practicing Problem-Solving and Decision-Making:

Engage in regular problem-solving exercises that challenge you to think creatively and analytically. This can include puzzles, riddles, or real-world scenarios. When making decisions, consciously evaluate available information, consider various alternatives, and anticipate potential outcomes before reaching a conclusion.

✅ Continuous Learning and Exposure to Varied Content:

Read extensively across diverse subjects and formats, exposing yourself to different viewpoints, cultures, and ways of thinking. Engage in courses, workshops, or seminars that stimulate critical thinking skills. Seek out opportunities for learning that challenge your existing beliefs.

✅ Engage in Constructive Disagreement and Debate:

Encourage healthy debates and discussions where differing opinions are respectfully debated.

This practice fosters the ability to defend your viewpoints logically while also being open to changing your perspective based on valid arguments. Embrace disagreement as an opportunity to learn rather than a conflict to win. Engaging in constructive debate sharpens your ability to evaluate and counter-arguments effectively.

✅ Utilize Problem-Based Learning and Real-World Applications:

Engage in problem-based learning activities that simulate real-world challenges. Work on projects or scenarios that require critical thinking skills to develop practical problem-solving approaches. Apply critical thinking in real-life situations whenever possible.

This could involve analyzing news articles, evaluating product reviews, or dissecting marketing strategies to understand their underlying rationale.

In conclusion, critical thinking is the linchpin of a successful career journey. It empowers individuals to navigate complexities, make informed decisions, and innovate in their respective domains. Embracing and honing this skill isn’t just an advantage; it’s a necessity in a world where adaptability and sound judgment reign supreme.

So, as you traverse your career path, remember that the ability to think critically is not just an asset but the differentiator that propels you toward excellence.

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The Importance of Creativity in Business

• 25 Jan 2022

When you think of creativity, job titles such as graphic designer or marketer may come to mind. Yet, creativity and innovation are important across all industries because business challenges require inventive solutions.

Here’s an overview of creativity’s importance in business, how it pairs with design thinking, and how to encourage it in the workplace.

Access your free e-book today.

Why Is Creativity Important?

Creativity serves several purposes. It not only combats stagnation but facilitates growth and innovation. Here's why creativity is important in business.

1. It Accompanies Innovation

For something to be innovative, there are two requirements: It must be novel and useful. While creativity is crucial to generate ideas that are both unique and original, they’re not always inherently useful. Innovative solutions can’t exist, however, without a component of creativity.

2. It Increases Productivity

Creativity gives you the space to work smarter instead of harder, which can increase productivity and combat stagnation in the workplace. Routine and structure are incredibly important but shouldn’t be implemented at the expense of improvement and growth. When a creative and innovative environment is established, a business’s productivity level can spike upward.

3. It Allows for Adaptability

Sometimes events—both internal and external—can disrupt an organization’s structure. For example, the COVID-19 pandemic has dramatically changed how the present-day business world functions . In such instances, imaginative thinking and innovation are critical to maintaining business operations.

Creatively approaching challenges requires adaptability but doesn’t always necessitate significantly adjusting your business model. For example, you might develop a new product or service or slightly modify the structure of your operations to improve efficiency. Big problems don’t always require big solutions, so don’t reject an idea because it doesn’t match a problem’s scale.

Change is inevitable in the business world, and creative solutions are vital to adapting to it.

4. It’s Necessary for Growth

One of the main hindrances to a business’s growth is cognitive fixedness, or the idea that there’s only one way to interpret or approach a situation or challenge.

Cognitive fixedness is an easy trap to fall into, as it can be tempting to approach every situation similar to how you have in the past. But every situation is different.

If a business’s leaders don’t take the time to clearly understand the circumstances they face, encourage creative thinking, and act on findings, their company can stagnate—one of the biggest barriers to growth.

5. It’s an In-Demand Skill

Creativity and innovation are skills commonly sought after in top industries, including health care and manufacturing. This is largely because every industry has complex challenges that require creative solutions.

Learning skills such as design thinking and creative problem-solving can help job seekers set themselves apart when applying to roles.

Creativity and Design Thinking

While creativity is highly important in business, it’s an abstract process that works best with a concrete structure. This is where design thinking comes into play.

Design thinking —a concept gaining popularity in the business world—is a solutions-based process that ventures between the concrete and abstract. Creativity and innovation are key to the design thinking process.

In Harvard Business School Dean Srikant Datar’s course Design Thinking and Innovation , the process is broken down into four iterative stages:

• Clarify: In this stage, observation and empathy are critical. Observations can be either concrete and based on metrics and facts or abstract and gleaned from understanding and empathy. The goal during this stage is to gain an understanding of the situation and individuals impacted.
• Ideate: The ideation stage is abstract and involves creativity and idea generation. Creativity is a major focus, as the ideation phase provides the freedom to brainstorm and think through solutions.
• Develop: The development phase is a concrete stage that involves experimentation and trial and error. Critiquing and prototyping are important because the ideas generated from the ideation stage are formed into testable solutions.
• Implement: The fourth stage is solution implementation. This involves communicating the solution’s value and overcoming preexisting biases.

The value of design thinking is that it connects creativity and routine structure by encouraging using both the operational and innovation worlds. But what are these worlds, and how do they interact?

The Operational World

The operational world is the concrete, structured side of business. This world focuses on improving key metrics and achieving results. Those results are typically achieved through routine, structure, and decision-making.

The operational world has many analytical tools needed for the functional side of business, but not the innovative side. Furthermore, creativity and curiosity are typically valued less than in the innovation world. Employees who initiate unsuccessful, risky endeavors are more likely to be reprimanded than promoted.

The Innovation World

The innovation world requires curiosity, speculation, creativity, and experimentation. This world is important for a company’s growth and can bring about the aforementioned benefits of creativity in business.

This world focuses more on open-ended thinking and exploration rather than a company’s functional side. Although risky endeavors are encouraged, there’s little structure to ensure a business runs efficiently and successfully.

Connecting the Two Worlds

Although the operational world and innovation world are equally important to a business’s success, they’re separate . Business leaders must be ambidextrous when navigating between them and provide environments for each to flourish.

Creativity should be encouraged and innovation fostered, but never at the expense of a business’s functionality. The design thinking process is an excellent way to leverage both worlds and provides an environment for each to succeed.

Since the design thinking process moves between the concrete and abstract, it navigates the tension between operations and innovation. Remember: The operational world is the implementation of the innovative world, and innovation can often be inspired by observations from the operational world.

How to Encourage Creativity and Innovation

If you want to facilitate an innovative workplace, here are seven tips for encouraging creativity.

1. Don’t Be Afraid to Take Risks

Creativity often entails moving past your comfort zone. While you don't want to take risks that could potentially cripple your business, risk-taking is a necessary ingredient of innovation and growth. Therefore, providing an environment where it’s encouraged can be highly beneficial.

2. Don’t Punish Failure

Provide your team with the freedom to innovate without fear of reprisal if their ideas don’t work. Some of the best innovations in history were the product of many failures. View failure as an opportunity to learn and improve for the future rather than defeat.

3. Provide the Resources Necessary to Innovate

While it can be tempting to simply tell your team to innovate, creativity is more than just a state of mind. If your colleagues have the opportunity to be creative, you need to provide the resources to promote innovation. Whether that entails a financial investment, tools, or training materials, it’s in your best interest to invest in your team to produce innovative results.

4. Don’t Try to Measure Results Too Quickly

If an innovative idea doesn’t produce desirable results within a few months, you may consider discarding it entirely. Doing so could result in a lost opportunity because some ideas take longer to yield positive outcomes.

Patience is an important element of creativity, so don't try to measure results too quickly. Give your team the freedom to improve and experiment without the pressure of strict time constraints.

5. Maintain an Open Mind

One of the most important components of an environment that fosters creativity and innovation is keeping an open mind. Innovation requires constantly working against your biases. Continually ask questions, be open to the answers you receive, and don't require fully conceptualized ideas before proceeding with innovation.

6. Foster Collaboration

Collaborative environments are vital for innovation. When teams work together in pursuit of a common goal, innovation flourishes. To achieve this, ensure everyone has a voice. One way to do so is by hosting brainstorming sessions where each member contributes and shares ideas.

7. Encourage Diversity

Diversity fosters creativity and combats groupthink, as each individual brings a unique outlook to the table. Consider forming teams with members from different cultural backgrounds who haven’t previously worked together. Getting people to step outside their comfort zones is an effective way to encourage innovation.

Learning to Be Creative in Business

Creativity and innovation are immensely important skills whether you’re a job seeker, employer, or aspiring entrepreneur.

Want to learn more about design thinking? Start by finding fellow professionals willing to discuss and debate solutions using its framework. Take advantage of these interactions to consider how you can best leverage design thinking and devise different approaches to business challenges.

This exposure to real-world scenarios is crucial to deciding whether learning about design thinking is right for you. Another option is to take an online course to learn about design thinking with like-minded peers.

If you’re ready to take your innovation skills to the next level, explore our online course Design Thinking and Innovation , one of our online entrepreneurship and innovation courses. If you aren't sure which course is the right fit, download our free course flowchart to determine which best aligns with your goals.

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Is critical thinking a superpower in the ai era.

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Critical thinking skills are crucial for AI.

AI, particularly generative AI, is having an immediate and dramatic impact on our lives, both personally and professionally. AI enables everyone to become better writers, content creators, coders, and artists. Interestingly, to derive effective value from AI systems, we must also develop our "soft skills”, of which critical thinking becomes one of the most important.

Just a few years ago, to get real benefit from AI, you needed to build and train AI systems which required “hard” skills such as math, programming, or data engineering skills. Now, because of generative AI, you no longer need to be an expert in statistics & probability, calculus, or linear algebra to get value from using Generative AI. You also don’t need knowledge of different algorithms & modeling skills. Instead, you need to use soft skills such as communication, curiosity, problem solving, adaptability, and critical thinking.

Why Critical Thinking is Crucial for AI

There’s no doubt that in today's fast-paced business environment, workers will need to use AI tools to stay ahead in the market. While AI systems will let anyone get a basic grasp of hard skills, the soft skills are proving to be the most important to get value from AI systems. In particular, the soft skill of critical thinking is proving indispensable. Put simply, critical thinking is the ability to get a solid, reliable, and as truthful as possible understanding of information, and then use that understanding to make sound decisions based on that knowledge. This means scrutinizing information, questioning assumptions, and ensuring that conclusions are supported by solid evidence.

When it comes to using generative AI systems, being able to observe, analyze, discern, and ask the right questions is what not only allows you to get the required results from the AI, but also to determine if the outputs are credible, lack bias, and truthful. Critical thinking approaches provide the necessary mental tools to iteratively refine prompts and hone in to get more effective results. Trying different approaches using thinking skills leads to clearer, more accurate results. The ability to analyze complex requirements helps in designing effective prompts and assessing the quality of AI-generated responses.

How To Develop Critical Thinking Skills

Critical thinking skills will only become more important in our AI-driven organizations. This means that people of all ages will need to make sure to develop and use critical thinking skills to be able to stay ahead of the pack. A key approach to develop and refine critical thinking skills is to always approach interactions with AI systems with a healthy dose of skepticism, and question assumptions, especially your own. Ask yourself whether the information going into and out of AI systems make sense and what assumptions are being made. Look for evidence to support or refute these assumptions.

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Additionally, you’ll want to seek evidence. It goes without saying that especially in an AI-generated world, you can’t take what you see, hear, or read at face value. Large language models are known to hallucinate, or confidently provide you with the wrong information. Verify the sources of your information and ensure that your conclusions are backed by solid proof, research, or findings, and dive deeper to find supporting evidence.

Critical thinking also requires you to be aware of potential informational and data biases. Those biases could be represented in your thinking, data, analyses, outputs of LLM systems, or the way in which you utilize or scrutinize AI outputs. Work to observe and identify patterns and trends in data. This involves not just looking at the data, but understanding the context and relationships between different variables.

Key Benefits Of Critical Thinking in an AI-Centric World

As you continue to work on your critical thinking skills, you’ll see many key benefits, especially as more people make use of AI to augment or assist their work. Professionals are often required to make decisions based on various data points and pieces of information. Critical thinking enables you to sift through the mountains of AI-generated information, identify what is relevant, and then make decisions based on accurate interpretations. This is especially the case with generative AI. Without critical thinking, there is a risk of making decisions based on incomplete or incorrect information, which can lead to erroneous, suboptimal, or misleading results.

A key to critical thinking is problem solving skills. Critical thinking helps professionals approach problems systematically, considering all possible solutions and their implications before making decisions. This thorough approach reduces the likelihood of overlooking important factors and increases the chances of finding effective solutions. It also helps you become a better prompt engineer as you’ll not stop until you get a satisfactory response. You are able to evaluate complex situations to make informed decisions. This analytical ability helps in designing effective prompts and assessing the quality of AI-generated responses.

Setting Yourself Apart With Critical Thinking

Individuals who excel in critical thinking will stand out when it comes to the use of AI. These individuals can navigate complex information landscapes, create better results and responses from LLMs, make better informed decisions, iterate more effectively to get desired outcomes, and be more effective when it comes to communicating and sharing results.

The ability to critically evaluate and interpret information is a strategic advantage for those who are working with AI systems. As AI becomes an increasing part of our every day business processes, tools, and interactions, those with strong critical thinking abilities will be better equipped to harness AI’s full potential, driving innovation, better insights, and answers.

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