Analytical Skills

See also: Critical Thinking Skills

Many job advertisements require “strong analytical skills”, but what does this phrase really mean in practice?

Analytical skills are the skills required to gather, assess, and analyse data or information—and then use that information to support better decision-making and problem-solving. They therefore include research skills, data analysis skills (both of quantitative and qualitative data), critical and creative thinking, and finally communication skills.

The good news is that most of us use analytical skills all the time. For example, you need analytical skills to decide what to have for dinner based on an assessment of the contents of your fridge or cupboards, your ability to visit the shops and your budget. However, they are also needed for complex business problems such as handling a merger or acquisition.

What Are Analytical Skills?

Analytical skills are the skills needed to gather information, assess it critically, and then use it to make decisions and/or solve problems.

It is worth unpicking each of these areas in turn, because they are actually quite separate and require different basic skills. You can safely say that you have good analytical skills only once you have mastered all of these areas.

Analytical skills are about much more than numbers

Traditionally, the term analytical skills was used only to refer to skills in analysing numbers and numerical data. However, in most workplaces, the term is used much more widely, to mean being able to review and understand information, and then apply it.

1. Gathering Data and Information: Research

The first area is gathering data and information, often known as research. Somewhat confusingly, research also provides the context that enables you to turn data into information (see box).

Our page on Research Methods points out that most people are likely to encounter research first as part of a project at school or college. However, quality research is important in many jobs—and simply to provide you with the information you need to understand how to make almost any decision.

From Data to Wisdom: The Knowledge Pyramid

The knowledge pyramid is a useful way to visualise the relationships between data, information, knowledge and wisdom.

Knowledge Pyramid. Data to Information to Knowledge to Wisdom.
  • At the bottom of the pyramid lies data, individual facts and figures or measurements, in its raw, uncleaned form.
  • When you add context (for example, by cleaning and organising the data), it becomes information.
  • Adding meaning to information enables you to extend your knowledge, for example, by comparing your information with other work, or discussing it with others.
  • Finally, when you add insights, you may attain wisdom.

In this article, therefore, we use these terms with these very specific meanings. Data is NOT the same as information, and information NOT the same as insight or knowledge.

There are many different types of research, and many different types of data. The method you use, and the type of data that you choose to collect will depend on the questions that you want to answer. For example:

  • If you want to know broadly how many customers are satisfied with your products, or how highly they would rate them on a scale, you might decide to carry out a survey to obtain some quantitative data (numbers).

  • However, if you want more detailed data about what customers actually think about your products, and how they use them, you might want to carry out some focus groups or interviews to obtain some qualitative data (opinions).

You can find out more about this in our page on quantitative and qualitative research methods.

You may also be interested in how to carry out market research, and gather competitive intelligence, which is a specific application of research methods to business. Our page on this subject also provides some useful information about sources of information for competitive intelligence. These include both primary sources of information (you collect the data yourself) and secondary sources (someone else has collected the data and made it available for others to use).

2. Assessing and Analysing Information and Data

Once you have gathered your information or data through research, you then need to assess and analyse it to provide yourself with more knowledge.

The first step is to consider the quality of your data. There are several ways that you can do that, such as considering the characteristics of the data, and whether it is supported by evidence from other sources.

There is more about assessing data quality in our page on Turning Information into Action.

Once you are certain that your data quality is good enough, you can then turn to analysis. There are many different forms of this, depending on your type of data. If your data is in the form of numbers, you might start with some simple statistical analysis, or perhaps use more complex statistical techniques such as multivariate analysis. However, if you have qualitative data, you might need to use other methods, such as those set out in our page on Analysing Qualitative Data.

There are also many forms of qualitative analysis used in business to provide insights, such as:

  • Porter’s Five Forces, which is used to help you visualise your market and your product within it;

  • SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis, which is used to enable you to understand your company within the context of your situation; and

  • PESTLE analysis, which allows you to look at the external factors affecting your organisation.

3. Using Information to Support Decision-Making and Problem-Solving

Before you use any information that you gather, or the results of any analysis you have carried out, you need to apply the techniques of critical thinking.

Critical thinking is the ability to apply logic and knowledge to information that is provided.

For example, you might look at the ideas you have gathered, and assess how these link to your other knowledge about the situation. You need to be thinking about the patterns within your data, and what these tell you when set in context. You also need to consider how your thinking might be affected by your previous experience (positive or negative) and your own biases. Critical thinking is also essential for understanding and exploring the root causes of a problem—and therefore developing an effective solution.

Using these approaches will help you to be able to apply information effectively to decision-making.

Another key skill area in problem-solving is creative thinking. This is important because it helps you think more widely and come up with solutions to more complex problems.

To assess your creative thinking skills, you may be interested in our Creative Thinking Skills Self-Assessment.

Finally, it is essential to be able to communicate your findings or solutions to others. Many people underrate the importance of this area, but if you cannot communicate effectively, your ideas will not be accepted or adopted.

Our pages on communication skills provide more information about this crucial area, including effective speaking, and listening skills so that you can understand and respond effectively to objections.

A Final Thought

Analytical skills are an essential part of most jobs—but also how most of us live from day to day.

You may not be conscious of using them, or even of having developed them. However, it is highly likely that you use them all the time. The main issue with using them for work purposes is to assess the processes that you use, and ensure that they are reliable and robust.