Firms tell us all the time their staff needs to improve critical thinking skills, and we’ve built courses and an entire curriculum around the premise that we need to build these skills from scratch. But I’ve always had this nagging sense that our approach was incomplete, and a group of young professionals taught me what we’d been missing.
I was observing the delivery of a new hire program we had created. The course was built around a fictitious company that we introduced with a video interview of the company’s CEO in which he explained his plans for the upcoming year.
Later in the course is a module on audit analytic procedures, for which the auditing standards require a specific analytical process:
- make observations
- form a hypothesis
- test the hypothesis
- draw a conclusion
At its core, a properly performed analytical procedure is an exercise in critical thinking, the very skill firms tell us is in short supply.
As evidence of this skills gap, they describe the way in which teams typically perform their analytical procedures. The usual procedure is a simple comparison of current year balances to prior year balances and the investigation of differences that exceed a certain threshold. The auditor presents these outliers to the client for explanation. The unspoken assumption in this process that the client’s business and industry have not changed since the previous year and therefore the current year balances, ratios and trends should likewise remain unchanged.
The flaws to this approach seem obvious: 1) the method would not identify situations where balances should have changed from the prior year but did not and 2) information about the client’s business is obtained after the analysis is performed to justify why the balances are correct not to obtain insight into how they might be wrong.
What this approach lacks in analytical rigor it makes up for in expediency. As practiced by most teams, these analytical procedures are a rote exercise that is easy to perform, execute and explain and teach to others.
The staff brings more to the table than you think
Firm managers taught and facilitated the case study; I just observed. If our understanding of the skills gap was correct, then we would have expected the new hires and interns—who have little if any understanding of the applicable auditing standards—to be unable to perform a proper analysis.
Instead, with no coaching, the did it perfectly, exactly as described in the auditing standards. All the facilitators did was ask a few carefully selected questions.
- What did you learn about the company and its industry from the CEO interview? (step one: make relevant observations)
- How should the company’s financial statements change or not change given what they had learned about the client’s business (step two: form a hypothesis)
- Finally, the facilitators presented different sets of financial statements that compared current balances to prior year balances. They asked, which set of financial statements were consistent with their expectations (step three: test the hypothesis and form a conclusion)
The facilitators never said a single word about the auditing standards. All they did was ask questions and let the participants discover and reveal their innate critical thinking skills, the same skills that are lacking in their more experienced colleagues.
How did critical thinking skills disappear?
What happened to the experienced auditors? How did they lose their innate critical thinking skills?
Learning isn’t just about the formal classroom. You have to think about learning holistically, to include informal, on the job training, a large portion of which consists of the coaching and supervision the staff receives from their supervisors. So our exploration of the missing critical thinking skills turned to the supervisors. Were they coaching and developing their staff in ways that reinforced the behavior we’d seen in the classroom?
What we discovered lead to the realization that we’ve been framing the critical thinking skills gap all wrong. It’s not a question of teaching the staff a new skill. They come to the profession with that very skill.
The issue is how do we train the supervisors and managers so they develop rather than discourage the innate analytic skills new professionals bring to the job on day 1. The analytical procedure short cuts we see in practice don’t come from formal classroom training; they come from on the job experience. To address the critical thinking of the staff will require firms to also address gaps in their supervision and coaching training.
The art of the constructive challenge
We’ve seen how coaching can work in the classroom. We build our courses around scenarios, role plays and case studies that typically lack a single correct answer. The emphasis in on the participants’ thought process. In our train the trainer sessions, we teach the firm managers to challenge the participants’ thinking not their answers. We help them learn the value of asking the right question as opposed telling them the right answers.
We help them develop the skills to constructively challenge their staff. The purpose of the constructive challenge is not to undermine the other person’s thinking but to help them achieve greater clarity and build their thinking skills.
The art of the constructive challenge is a skill that can be taught and that should be a part of a firm’s supervisory and coaching skills curriculum. Rarely, if ever is this the case. The coaching and supervision skills curriculums we see have a strong task orientation, intended to drive productivity not build critical thinking.
So it’s not surprising that these supervisors focus on task and correcting any deficiencies in the work product. Which is how we get to a place where the natural analytical skills of a new hire get nipped in the bud and have to be rebuilt later in their career.
Rethink manager training
The good news is that closing the critical thinking skills gap is not as difficult as imagined. Firms don’t have to teach a skill for which young professionals have no aptitude. Young professionals have a natural aptitude for analysis, and the firm’s job is to nurture these instincts and—to be candid—get out of its own way!
Supervisors should become adept at the skills our client’s managers demonstrated in the new hire training program. They need to not suppress the young professional’s thinking skills for short term, on the job expediency.
Rethink manager training and the coaching and supervision curriculum. Helping managers learn the art of the constructive challenge will be a force multiplier, reinforcing, rather negating, all the good work the staff is accomplishing in the classroom.