Stop the Noise — Hurdles to Great Critical, Futures & Strategic Thinking

Grey Swan Guild
11 min readFeb 2, 2024

Relevant Outtakes from Kahneman’s book on “Noise” Part I (Takeaways #1–9)

Author: Sean Moffitt, Grey Swan Guild Founder and CEO, Cygnus Ventures

A coherent story gives us the illusion that we have a good understanding of the world, when we actually have no idea what is going on. — Daniel Kahneman

I’ve recently been investing myself in Nobel Prize winner Daniel Kahneman’s recent book Noise: A Flaw in Human Judgment, co-authored with Olivier Sibony and Cass Sunstein in 2022. It kicks off my year of formally reviewing a book-a-month. Who knows, perhaps it will turn into a Grey Swan Guild Book Club?

First off, Noise is a good one. Twenty-eight chapters dedicated to our somewhat flawed machine called the human mind. The book spotlights an entirely new field of cognitive challenge beyond the realm of bias (i.e. prejudice in favor of or against one thing, person, or group compared with another) to the issue of noise (i.e. unwanted variability in judgement that should be closer to identical).

Noise (Kahneman/Sibony/Sunstein)

Top 25 Takeaways & Applications From “Noise” #1–9

I have lifted some of the more interesting conclusions from Kahneman, Sibony and Sunstein’s work that cast a light on getting to better decisions and knowledge here.

As much as I have enjoyed the authors’ evidence-based revelations, new framework and branch of thinking, and well-supported conclusions, there are three paradoxes to the work that my practitioner-friendly brain needs some filling in of the blanks:

  • Noise steers academic and is more explanatory than prescriptive — nearly 90% of book makes the case for noise by providing niche, heavily researched lighthouse use cases vs. providing expansive methods to overcome it, I have tried to provide an actionable conclusion to each of my takeaways below.
  • Noise seems to delight in the frailty of human intuition and creativity and basks in the superiority of mechanical systems and statistical wisdom (they almost acknowledge this imbalance and try to pull off a pithy mea culpa in the last couple of chapters caveating some of their work) —they are not entirely wrong, but I don’t entirely buy into their conclusions (they may be accused of their own noisiness by all being behavioral economics and strategy academics) and acting on all their conclusions would certainly turn us into an AI-driven and decidedly unfun world, I have tried to provide some humanity balance to their algorithmic ambitions below.
  • Noise goes back to the same turf over again, and even with chapter summaries, it can be difficult to craft the main summary takeaways —at the risk of being noisy and reductive, I have tried to headline and illustrate the twenty-five distinct conclusions I have made from the book in what follows.

In my Moffitt-ian tradition (for those that know me, I love lists), I have tried to rank my takeaways here in terms of revelation, resonance and impact. In this post you will get the first nine. Pump up the volume on Noise! Let’s begin.

Noise Takeaway Ranked #1 — “Noise” — a Category Distinct and Beyond “Bias”:

  • noise is defined as unwanted variability humans bring to decision-making, random errors of judgment which can lead to compromised fairness, decision risk and uncertainty
  • frequently we try to address bias and not noise, because it takes less expertise and we can more easily address it at the time judgment is happening
  • when we make land on certain knowledge, unfair verdicts and bad decisions, we sometimes are experiencing more noise than bias (see visual metaphor below)

Takeaway #1: there are 19 questions at the back of the book Noise; A Flaw in Human Judgement that get at the heart of noise (Appendix B- A Checklist for a Decision Observer) that cover off approaches to judgment, prejudgments, information processing and decision making, you would be wise to follow them — one of key ones “were alternatives fully considered and was evidence that would support them actively sought?”.

“Noise: How to Overcome the High, Hidden Cost of Inconsistent Decision Making” Visualization

Noise Takeaway #2 — Beware the Respect-Experts

  • where judgments are less verifiable (like in many of our managerial sciences, including futures thinking, sensemaking reasoning and strategic decision making), there are people whose confidence we have in their judgments are entirely based on their peers, perhaps even more so in a connected world, Kahneman calls them respect-experts
  • these presumed experts form hypotheses quickly, construct coherent stories, and fit the facts to the stories easily — whether they are an accurate portrayal or not; medieval astrologers likely had these same qualities
  • although they are notoriously intelligent and gifted in storytelling, they may be amplifying noise in decision making; in modern day environments, many keynote speakers never let the authentic evidence interrupt a great story

Takeaway #2 : When confronted with a simple argument from a respect-expert, look for tangible examples, applications, exceptions and consider the contrary for at least a brief moment.

Noise Takeaway #3 — Letting the Independent Outside-In

  • outside views can and should be more systematically integrated into decision making processes; there is a heightened need in organizations to critically assess the relevance and reliability of the information we incorporate into our decision-making processes, frequently its scant and skewed
  • consideration of outside-in factors are essential as today’s knowledge workers need to balance multiple, sometimes contradictory objectives to arrive to better conclusions and decisions
  • organizations that want to harness the true power of diversity must welcome the disagreements reached independently; this will often be the easiest, cheapest, and most broadly applicable decision hygiene strategy.

Takeaway #3: eliciting and aggregating external judgments that are both independent and diverse should be required on all key ventures and decisions of an organization, team or even personal forks-in-the-road.

Grey Swan Hunting and 25 Sources of Outside-In Collisions (Grey Swan Guild/Futureproofing)

Noise Takeaway #4 — The Danger of Coherence Pattern Chasing, Stories and TED-itis

  • the confidence we have in our beliefs is not a measure of their accuracy or quality, but rather of the coherence of the stories we construct; TED Talks is frequently my multimedia poster boy for these charismatic but biased utopian views and straw man arguments
  • there is high fallibility in the human confidence in our beliefs. frequently conviction in our ideas or judgments stems from the degree of coherence within the narrative we have created around them not their validity, if all you are doing is getting your news from Tik Tok, you are likely culpable here
  • a human tendency exists to rely on our storytelling abilities to make sense of the world, often sacrificing objective truth for the comfort of a coherent and understandable narrative, this can be used for good or for bad purposes, but frequently obscures the truth

Takeaway #4: always consult multiple sources (and types of sources) when considering a point of view that may change a belief, deconstruct why these stories are so resonant in your head and look for flaws before acceptance.

#5 Noise Takeaway #5 — Humble Balance Between Objective Truth & Creativity

  • Objective Truth Bullet #1 — personal experiences that have made you who you are, are less relevant to a lot of the task at hand of interpreting the way the world works
  • Objective Truth Bullet #2 — the gains from subtle rules in human judgment that exist are generally not sufficient to compensate for the detrimental effects of noise; you may believe that you are subtler, more insightful and more nuanced than most algorithms, but you are likely noisier
  • Creativity Bullet #1 — societal evolution of beliefs and human creativity are frequently in conflict with tolerance of the costs and unfairness of noise, stepped progress usually requires this suspended judgment of current noise
  • Creativity Bullet #2 — automation and algorithms are not always the answer as they can be biased too even though they remove noise

Takeaway #5 — Balance your organizations, teams, personal networks and your own mind with allowance for objective truth AND creativity, match fit for need.

Noise Takeaway #6 — Overconfidence Based on Experience

  • causal thinking and the illusion of understanding the past contribute to overconfident predictions of the future
  • noise from previous and limited anecdotal experience is the enemy of good decision-making. it’s an elusive yet pervasive force on our ability to make sound judgments
  • the random variation in our thinking and actions, muddles our ability to consistently assess information objectively; it introduces an element of unpredictability and inconsistency that impairs our capacity to reach optimal outcomes.

Takeaway #6 — whether making decisions in personal or professional realms, limit experience and step outside yourself to discern patterns, new distortions, and rational repeatable choices.

2024 Jobless Coaches : Carroll & Belichick - perhaps too much experience and over-confidence

Noise Takeaway #7 — Prediction & Futures Dislike

  • it’s natural and common to disagree with a prediction, foresight or a future thought, but is this a case of a “broken leg” in the evaluation effort or is it somebody who dislikes the prediction?
  • too often, particularly in matters of politics, faith, startups, siloed corporate and social media opinion, we dismiss discordant opinion in favour of the one we seek
  • frequently with research, we commission these poor analysts to run things again until we get a more favourable answer

Takeaway #7 : A matter of judgment should be one with some ongoing uncertainty about the answer, where we allow for the possibility that reasonable and competent people might disagree, and that we might need to conclude on an unpopular answer.

Noise Takeaway #8 —Don’t Dismiss Those Feeling Noisy Spider Senses

  • you are not the same person at all times, your mood affects judgement; stress and fatigue increase occasion noise
  • studies show that tired doctors prescribe more opioids at 5 PM then at 9 AM, even the weather can influence professional judgments
  • our decisions are shaped by the noise in our minds, more than by the signal in the information we receive. emphasizing the significant influence of internal emotional factors on our decision-making process.

Takeaway #8: Recognizing the presence of this occasion noise, step away from. key conclusions, decisions or courses of action for days when you can and give it a fresh dispassionate look before publishing, declaring or pushing forth.

Noise Takeaway #9: Naive Realism and The Illusion of Agreement

  • we often hold a single interpretation of the world around us at any single time, we frequently hold a naive realism that we see the world around us objectively, and that people who disagree with us must be uninformed, irrrational or biased
  • whenever you cast judgement, there is an illusion of agreement that other experts would see it the same way, they don’t, and that causes noise, and much more of it than we think
  • we normally invest very little effort in creating plausible alternatives to this naive realism

Takeaway #9: Have an expert sounding board ihat you respect in your personal and professional life culled from different disciplines, geographies, political stripes and backgrounds to counter your naive realism.

Naive Realism Triangles Perceptions of Views Robinson et al., 1995, and Ross & Ward, 1996.

Stay tuned for Part #2 — Stop The Noise Takeaways #10–18 and Part #3 - Stop the Noise Takeaways #19–25

Grey Swans — A Month of Specialty Posts:

This is sa special edition of a set of posts on different methods and frameworks for chasing Grey Swans. but we have so much other commentary on this valuable but often overlooked chase for the non-obvious:

I — Grey Swan Week and defining Grey Swans

II — Our 2023 Report Card of Grey Swans (last year’s review and performance)

III — Fifteen Ways to Hunt for Grey Swans (methods and frameworks) —

IV — Stop The Noise I — 25 Outtakes from Kahneman’s book

V — Fifty Grey Swan Wild Card Influences in 2024 (ranking the categories)

VI — Twelve Grey Swans Revealed (<25%) — Cloudy Swans

VII — Twelve Grey Swans Revealed (<5%) — Stormy Swans

VIII — Twelve Grey Swans Revealed (<1%) — Shadow Swans

Stay tuned with us here, as well as on our website for all the rundowns.

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