Why I read it
I really enjoyed Thinking, Fast and Slow, and having listened to Kahneman talk about his more recent work on a string of podcasts, I was excited to pre-order Noise. I knew that Kahneman and his team would be considered, detailed, and base their work on a large volume of research, and I wasn’t disappointed.
Noise is defined as the inconsistencies and flaws in our judgments; the reason why one courtroom judge can pass an extreme sentence, and the other a lenient one. Or why 10 members of the same team might all give different answers to the same question, even when they think they are holding a consistent approach with the others. The authors propose that much work has been done over the years on the effects of bias, but not nearly enough on noise.
The book examines different types of noise, such as singular versus pattern noise, as well as ways that we often miss this ‘invisible’ problem, and lastly looks at ways that we can reduce noise in our organisations.
Hugely technical and with lengthy explanations, often linked to specific industries, this isn’t a light read. But, when you persevere with the subject matter and think it through, there is much to learn from this genius group of thinkers.
- Noise affects us much more than we think – the authors use an example from an insurance firm – two underwriters were asked to come up with an estimate for an insurance premium. Executives from the company were then asked to estimate what the difference in their answers would be: they went for 10%, on average. In fact, the difference was 55% between the two estimates. This exemplifies two things for us all: one, that there is likely to be a big difference in the way we judge things versus our colleagues; and two, that we underestimate this variability and the effects of noise. The authors suggest that we often work with the ‘illusion of agreement’.
- Noise doesn’t average out – an organisation may audit their noise and find that, ultimately, the average of noise and inconsistency is a relatively low number, for example 10-15%. However, it would be a mistake to think this low number means it all cancels out over time – some noise will be high, some low. But each one tells a story, each one may have lead to a costly mistake.
- Mood influences us – unsurprisingly, as proven with judges in court, our mood, the weather, and other circumstances, can influence the consistency and validity of our judgements
- Recognising and reducing noise – for me, one of the major gains I made while reading this book was to understand how easily noise, inconsistency and bias creep into our judgements and decisions. The authors do discuss a ‘decision hygiene’ process and ‘noise audit’ to help identify and reduce noise in your organisation, but I will leave that to the book itself to detail for you. The noise audit is particularly useful, and I will be using something similar with the Heads of Year team soon, to understand how and why we make the decisions that we do.
I was shocked (for a moment) when I read the section on excessive coherence. Let’s say you are given some words to describe a candidate or student. Intelligent and persistent are the first two words. You are then given the next words: cunning, unprincipled. Studies show that your opinion of them changes, but not enough to seriously consider the final words, as you were influenced by your initial opinion of them. If we had received the latter words first, our opinion of them would be completely altered.
We form coherent impressions quickly and are slow to change them. We then assign less importance to the later information because of our confirmation bias that this was an intelligent and persistent person.
The key question we can apply to any situation is: would I have formed this judgement if I’d received this information in a different order? This reminds of me Maria Konnikova’s The Biggest Bluff, and becoming over confident with your poker hand at the early stages; once the latter cards are dealt, you still anchor your judgement on how you felt initially, disregarding the statistical, logical information you have latterly been given. I think we can all apply this valuable lesson to our work – we should disregard our feelings about early information, and logically consider the whole picture, before we make a judgement or decision.
Read this if…
You want to understand more about the flaws and idiosyncrasies in our judgements and decisions
You want to consider the inconsistencies and ‘noise’ in your own organisation