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Six thinking hats for accountants

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7th Oct 2013
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"6 Thinking Hats" is a powerful decision making tool developed by Edward de Bono many years ago, explains Mark Lee.

It’s unnatural but that’s part of what makes it useful when we have tough decisions to make – whether in our personal lives or regarding our businesses or practices. I have found myself explaining it to people again recently after a gap of some years.

The idea requires us to consider the full complexity of a decision, and spot issues and opportunities which we might not otherwise notice. I have long found it helpful when considering key decisions and plans.

Accountants typically make decisions from a very rational, positive viewpoint, and this is part of the reason that accountants are generally successful. Often, though, we may fail to look at problems from emotional, intuitive, creative or negative viewpoints. This can mean that we underestimate resistance to change, don't make creative leaps, and fail to make essential contingency plans.

Similarly, pessimists may be excessively defensive, and accountants who only use a very logical approach to problem solving may fail to engage their creativity or listen to their intuition. 

The six thinking hats is a metaphor that can help us use all of these approaches to develop the best solution.

In effect you consider the issues ‘wearing’ each of the hats in turn. I have also adapted the technique to simply recognise that my thinking process is unclear when I am only ‘wearing’ one of the hats. The options before me can look quite different when I swap hats.

Each hat is known by its colour which is also a reminder of the thinking style to which it relates.

White hat
We are ‘wearing’ the white hat when we focus only on the available data. The pure (white) facts and figures. Look at the information you have, and see what you can learn from it. Look for gaps in your knowledge, and either try to fill them or take account of them. Your facts may include past trends and historic information.

Red hat
The red hat is the one we wear when our thinking is coloured by (fiery red) emotion. It legitimises the use of our intuition and gut reaction – even though this is not based on evidential facts. When others are involved you might recognise when they are ‘wearing’ a red hat and need to accept that they are following their emotions and gut reactions too. You will rarely win an argument with these by quoting (white hat) facts.

Black hat
The black hat is the one we wear when we are focused on negative (black) thoughts. When we are being pessimistic, cautious and defensive. I wear this when I am trying to see why ideas and approaches might not work. It’s an important part of the process and it can highlight the weak points in a plan or course of action. It allows you to eliminate them, alter your approach, or prepare contingency plans to counter problems that arise.

Black hat thinking helps to make your plans tougher and more resilient. It can also help you to spot fatal flaws and risks before you embark on a course of action. Black hat thinking is one of the real benefits of this technique, as many successful people get so used to thinking positively that often they cannot see problems in advance, leaving them under-prepared for difficulties. Other people seem to only wear a black hat and sometimes need to be encouraged to remove it for a while.

Yellow hat
The yellow hat is the one for bright, sunny (yellow) optimistic thinking. This helps you to see all the benefits of the decision and the value in it, and spot the opportunities that arise from it. Yellow hat thinking helps you to keep going when everything looks gloomy and difficult. But it’s risky if used in isolation. Enthusiasm alone is rarely sufficient to drive success.

Green hat
We wear the green hat when we want to focus on creative ideas and see where the decision or opportunities may go (or grow). No emotional judgement, no facts, no criticism; nothing but bright (green) creative ideas.

Blue hat
The blue hat is the one we put on to plan our thinking and decision making process. It’s the one that goes above the others (like the blue sky). It’s when someone ‘wears’ the blue hat that they can see the need for others, or even themselves, to change the hat they are ‘wearing’. When running into difficulties because ideas are running dry, they may direct activity into green hat thinking. When contingency plans are needed, they will ask for black hat thinking, and so on.

Contrived?

Yes, of course the six thinking hats process is contrived but so are all tools intended to help us organise our thinking. It would be somewhat arrogant to argue that any of us can do this without the use of tools or techniques as it’s not natural to do so.

Example

The two partners in a firm of accountants are considering how to grow their practice. They’ve discussed this many times but keep going around in circles.

They have now decided to use the six thinking hats technique to see if it can help them reach a conclusion.

Looking at the problem with the white hat, they analyse the data they have which concerns their own practice to date. The numbers suggest that they are both fully occupied and working at full stretch. They have also reviewed articles on AccountingWEB and elsewhere which set out the options available to firms that wish to expand and they have collated all salient facts about their current office, the length of the lease and the local competition.

With red hat thinking, the partners admit their concerns about bringing anyone new into the practice. They are also concerned about what would happen if one of them were to fall ill and there is no one to share the resultant burden. On the other hand they are excited by the idea of moving to larger premises. They realise that they ‘feel’ they are working as hard as they could, but they each suspect that they may not be working as ‘smart’ as they could.

When they think with the black hat, they doubt that they will find a way to grow the practice that meets both of their aspirations. It’s going to cost money and there isn’t a lot spare to go around. They start to dismiss the various ideas they have explored as being impractical, too costly, too slow or unproven.

With the yellow hat, however, they start to speculate about how soon they might reap the benefit of their expansion plans and how much easier life will become if they bring someone new on board.

With green hat thinking they look at a wider range of options including some they have not previously considered including a business coach or mentor, telesales, PR, merger, takeover, recruitment or the use of more outsourcers. Do they need more professional support or more administrative support?

The blue hat has been used by the partners when they decided to switch hats or to ‘call’ each other for forgetting which hat they were supposed to be wearing during each part of their discussion.

Key points

De Bono’s ‘6 Thinking Hats’ is an effective technique for looking at the effects of a decision from a number of different points of view. It allows accountants to include a measured amount of emotion and scepticism in what would otherwise be purely rational decisions. It opens up the opportunity for creativity when big decisions are required. It can also help, for example, persistently pessimistic accountants to be positive and creative.

Have you ever tried this technique? Or do you have other preferences to organise your thinking process?

Mark Lee is consultant practice editor of AccountingWEB. If you like this article, do check out his BookMarkLee blog and ebooks for accountants who want to accelerate their success. He is also chairman of the Tax Advice Network of independent tax specialists.

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Replies (15)

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By JCresswellTax
07th Oct 2013 14:03

Wow

Just wow.

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By wilcoskip
07th Oct 2013 14:30

Interesting

My daughter in year 7 was taught the hat stuff as part of her study skills training.

Whilst it initially sounds odd, it is in fact a good way of consciously recognising the different approaches to thinking and problem solving, and in doing so making sure you're not neglecting any areas or being tied down to just one approach.

I've not seen it linked with communication and engaging others before.

Thanks, Mark.

WS.

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Man of Kent
By Kent accountant
09th Oct 2013 09:31

Marketing consultants gimmicks

I'm sorry but I can't take this sort of stuff seriously.

If I sat down with Mrs KA (my fellow director) and decided to have a '6 hats' meeting to discuss how to grow the business we would spend equal amounts of time trying to remember what each hat did and falling about laughing - "I've got my yellow hat on now, no wait, I mean green...".

May work for big businesses with 100's and 1000's of staff but can't see it working for sole/small practitioners.

Ridiculous.

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Replying to D V Fields:
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By Mark Lee
09th Oct 2013 13:39

No marketing consultants here @kentaccountant

In my experience the technique works best in small meetings - sometimes just between two people. It's simply a tool that you can use if you wish to do so. 

You''re entitled to your view of course and no one is forcing you to try it. The widespread use of and reference to the technique suggests that it may be worth more than a dismissive swipe. 

Each to their own (including you, whoever you are)

Mark

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Replying to lionofludesch:
By JCresswellTax
09th Oct 2013 14:17

Childish

bookmarklee wrote:

In my experience the technique works best in small meetings - sometimes just between two people. It's simply a tool that you can use if you wish to do so. 

You''re entitled to your view of course and no one is forcing you to try it. The widespread use of and reference to the technique suggests that it may be worth more than a dismissive swipe. 

Each to their own (including you, whoever you are)

Mark

You criticise for KA taking a 'dismissive swipe' and you then end your post with "whoever you are".

Seriously? Pot, kettle, black springs to mind.

Unbelievably petty.

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Man of Kent
By Kent accountant
09th Oct 2013 15:12

Best

put your toys back in the pram.

Always the way, you can't take any critical remarks.

Rather than resort to personal remarks you need to focus on posting meaningful content.

 

 

 

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By Mark Lee
09th Oct 2013 17:16

Sorry

As I have indicated on previous threads, I'm not inclined to take seriously or to debate with those who criticise behind a cloak of anonymity.

It's disappointing when some, like this person, routinely seem to ignore the thrust of what I post and then imply I am unable to take criticism simply because I have a different point of view.

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Replying to Kent accountant:
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By tom123
09th Oct 2013 20:40

Bit harsh?

bookmarklee wrote:

As I have indicated on previous threads, I'm not inclined to take seriously or to debate with those who criticise behind a cloak of anonymity.

That's a bit harsh, Mark...

When I first used AWeb 12 years ago, you had to use your own name. I didn't really mind that, until I realised that one of my staff had typed my fairly uncommon name into google and it brought up my Aweb question.

Now - I was in my first management job, and the question, whilst not too complex,would have been a bit embarassing to have in general circulation in the company. (Such as how do you fill out a P11d, or something)

Since that time, I have used an abbreviation of my name.

If I was working full time on my own account, I would perhaps revert to my full name - but whilst in employment I am apprehensive of that.

Anyway, I find the user names of long standing members as good as names anyway.

Going back to your blog post - I think we used a similar approach to reviewing tenders etc. We had a 'black hat review team' who had the last word before the stuff went out. 

But then, we also have 'Tiger Teams' when problems need sorting - so there you go.

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By Mark Lee
09th Oct 2013 21:37

Point taken 'Tom'

Thanks for clarifying a good reason for not using a real name. At least you have a forename - whether or not it's real ;-) - and you put forward logical arguments.

NB: My comment concerned those who CRITICISE behind a cloak of anonymity. Happy to debate with anyone - within reason.

Mark

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By JCresswellTax
10th Oct 2013 09:22

Why does it matter

If you have a username or a real name?

For example your name isn't even Mark Lee, its bookmarklee - for me that is just as bad!

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By Ashlea
10th Oct 2013 09:33

I appreciate the creativity and fresher approach, but I must admit I think about all these aspects naturally when I am making all my decisions, but that is me, I can't speak for anyone else. So I can see it being a good theory for others to use who perhaps struggle to make decisions and consider things in a balanced way. Again I like it for the fun twist it has, we need some quirks now and again, thank you!

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By Mark Lee
10th Oct 2013 12:28

@JCresswellTax

We will have to agree to differ. Each to their own.

I would be 'Mark Lee' everywhere if my name were not so common that I can rarely get it as a username as others have got there first. So instead I use a variation - consistently across the web. 

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By MattG
10th Oct 2013 13:54

Anonymity = Client Confidentiality

Further to Tom's comment, for those working on their own account I imagine client confidentiality plays a large part. I also have an unusual name that were I to ask a question relating to a particular niche business could lead to a potential breach in client confidentiality, no matter how generalised I try to keep my question (plus generalised the question too much might mean restrict other user's ability to offer meaningful views).

Additionally one's ability to debate a point should not be linked to being able to identify exactly who somebody is. Whether I post under my real or assumed identity what I say and what I mean will remain the same. One could argue that knowing who somebody is allows you to judge whether they have a vested interest (a software rep promoting their own product for example), but equally one could argue that an anonymous profile ensures that ones views are taken objectively.

It strikes me that a large part of the 6 Hats principle could be more simply achieved with a list of Pros and Cons, particularly in the case of small business with few stakeholders.

Having qualified as a CIMA accountant I had to study a lot of what I would term "management speak". Had I known more about what each qualification entails I probably would have gone down the ACCA/ACA route, though curiously it has been far easier to get a practicing certificate through CIMA than it would have been with ACCA/ICAEW. Alas all the "cool" kids were doing CIMA so I jumped on the bandwagon.

Some of these models were fairly sensible, others were contrived, stating the obvious, or just complete tosh. A simple SWOT analysis is hard to argue with, but some of the models, often adhering to the naming convention of "the 9 rs", the "12 ms" or the "15784 ps" just seem so utterly contrived as to be meaningless.

Having done a quick Google of De Bono I am starting to come round to his way of thinking though - apparently he confirmed what I'm sure many of us have suspected for a long time - the solution to world peace* is more Marmite!

http://www.independent.co.uk/news/world/middle-east/de-bonos-marmite-plan-for-peace-in-middle-yeast-740189.html

*well peace in the Middle Yeast in any case...

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By Mark Lee
11th Oct 2013 09:36

I agree @Matt

Having reflected further on this I think my only gripe is with those who criticise behind a cloak of anonymity in such a way that I feel they are not interested in debate or discussion.

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By carole.businessheads
19th Oct 2013 12:38

Hats off to you!

This is great Mark, I have never heard of it.  Its like SWOT analysis with knobs on!  I'm sure the addition of the green hat in particular could make a big difference to accountants as we often doen't allow ourselves the luxury of being creative.

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