The one sentence summary
Noise causes flaws in human judgement and if ignored it can come at a great cost to individuals and organizations.
Can’t be bothered to read it? Too much screen time lately? Listen to the 5-minute podcast.
- Noise produces errors in many fields including medicine, law, public health, economic forecasting, forensic science, child protection. Classic examples include judges giving wildly different punishments for identical crimes.
- Using the analogy of shots hitting a target, closely grouped shots could be spot on, or consistently biased if off-centre, albeit still in a tight cluster. Widely spaced shots are subject to noise.
- Respected professionals in many fields maintain an illusion of agreement when in fact a noise audit can reveal a large variance in estimates (43% in insurance for example). Meanwhile, the bosses believe that this is only likely to be about 10%.
- A singular decision is a recurrent decision that is made only once. Your mind is essentially a measuring instrument.
- Level noise is variability in the average level of judgement.
- Pattern noise is variability in responses to particular cases. Part of this is occasion noise (being influenced by the context).
- This can be offset by assuming that your first estimate is wrong and providing an alternative estimate. Seeking an outside view from someone will also help. Both approaches can increase decision hygiene.
- Rules simplify life and reduce noise. Meanwhile, standards allow people to adjust to the particulars of a situation. Helpful questions include:
– Was an easier question substituted for the real one?
– Was any important factor or piece of evidence ignored?
– Was an outside view sought?
– Did dissenters express their views?
– Is bias at play?
– Does anyone stand to gain from this decision?
– Were alternatives fully considered?
WHAT’S GOOD ABOUT IT
- People who are in a good mood are more likely to let their biases affect their thinking, increasing their gullibility and propensity to agree with bullshit – a trait known as bullshit receptivity. This means that you are not the same person at all times – you can be more susceptible to noise at certain times and in certain moods.
- Judgement is like a free throw – it is never identical. Most predictive judgements are made in a state of objective ignorance because many things on which the future depends cannot be known.
- The effect of removing noise from your judgements will always be an improvement in your predictive accuracy. People who believe themselves capable of an impossibly high level of predictive accuracy are not just overconfident – their attitude amounts to a denial of ignorance.
- The views of many experts are unverifiable, so they are actually respect-experts – merely respected for their opinions.
WHAT YOU HAVE TO WATCH
- There is a lot of complicated maths which the layperson may not follow easily.
- There are business applications here but it’s not really a business book – it concentrates more heavily on education, law and medicine.