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

Grey Swan Guild
9 min readFeb 6, 2024

Relevant Outtakes from Kahneman’s book on “Noise” Part III (Takeaways #19–25)

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

“Whether you make a decision only once or a hundred times, your goal should be to make it in a way that reduces both bias and noise. And practices that reduce error should be just as effective in your one-of-a-kind decisions as in your repeated ones.”
Daniel Kahneman, Noise: A Flaw in Human Judgment

In our continuing series, we are listening intently for noise and generating our own 25 selfish takeaways from Daniel Kahneman’s 2021 book (with Olivier Sibony and Cass Sunstein), Noise: A Flaw in Human Judgment. Here are my concluding last seven thought kernels and actions from our series.

Noise Takeaway #19 — Exercise the Limits of Eccentricity

  • the uniqueness of people’s personalities is what makes them capable of innovation and creativity; when it comes to many forms of judgment however, this is less of an asset
  • by suppressing noise, organizations and societies can foster a more reliable and consistent environment where performance is not solely dependent on rare instances of brilliance but is rather the product of collective work, collaboration, and reliable processes
  • the less noisy approach allows for more sustainable and consistent outcomes, ultimately leading to better overall results

Takeaway #19: We like the think creativity has no limits but when the stakes are high and there is a premium on accuracy, fair judgment and correct thinking, conducting a noise audit (as outlined in the book’s epilogue) and refraining from the hope of virtuoso right-brained creative thinking is in order.

Noise Takeaway #20 — Importance of Having a System (like our 15 frameworks)

  • mechanical adherence to even simple rules can perform better than human judgement and could improve judgements to difficult problems
  • for example, aggregating diverse views is known as the Delphi method; this method involves multiple rounds during which the participants submit estimates to a moderator and remain anonymous to one another; the process encourages estimates to converge and harnesses both from aggregation and social learning.
  • This involves implementing processes and systems that promote consistency, standardization, and fairness, Kahmeman calls it good decision hygiene
LinkedIn Survey

Takeaway #20: I read a recent survey on LinkedIn (above) that when faced with a critical decision in their life, people prefer to go with their gut — unfortunately, your gut lies and is noisy; have some rules with weights and ratings that you can follow objectively when confronted with big forks in the road — I’ve done it for finding a house, purchasing software and looking for talent — have a system of finding what you want before you’ll find any interesting thing will do.

Value-Focused Systems Decision Making (Gregory Parnell)

Noise Takeaway #21 — Be on Guard for System Credibility

Takeaway #21: every decision that is more than two standard deviations from the mean deserves some scrutiny, these decisions shouldn’t be eliminated, but in organizations, major decisions that zigged when others zagged should be subject to board or oversight review.

Noise Takeaway #22 — Self-Imposed Guidelines

  • upfront requirements on how to approach a problem can limit unwanted variability; in their absence, personal biases, subjective interpretations, or random factors grow rampant
  • we have a structured process for hiring decisions, engineering solutions and patient diagnosis, why not for strategic, investment and foresight thinking and decisions?
  • noise thrives when there is no clear rule to guide judgment; established standards or definitive guidelines should be adopted in most settings

Takeaway #22: throwing thinking against the wall gives you splat; even the most exploratory efforts should have some guardrails on what can and cannot be approached and adopted.

Decision Guidliens Matrix (Source: Asana)

Noise Takeaway #23 — Sequencing and Delayed Judgment

  • minimize confirmation bias by sequencing information to limit the formation of premature intuition
  • instead of the whole, judge individual components of a system or decision; push off holistic judgment, do not exclude intuition, just delay it
  • mini-Delphi, can be deployed within a single meeting (also called estimate-talk-estimate), it requires participants first to produce separate, silent estimates, then to explain and justify them, and finally to make a new estimate in response to the estimates and explanations of others; the consensus judgment is the average of the individual estimates obtained in that second round

Takeaway #23: in group discussions or asychronous input, make sure participants are not able to see other’s already submitted inputs and request their perspectives in phases or chunks of the overall subject matter challenge.

Communication flow diagram for Estimate-Talk-Estimate approach (Paresh Sarma)

Noise Takeaway #24 — Group Amplification Mania

  • deliberating groups and polarized groups when not independent can amplify noise, particularly without clear evidence to refute
  • independence is the prerequisite for wisdom of crowds; focusing on only one or a first perspective might produce erroneous evaluations and have harmful incentive effects
  • group deliberation often adds more error in bias than it removes in noise; to truly harness the power of diversity, organizations must welcome the disagreements that will arise when team members reach their judgments independently

Takeaway #24: In many key decision forums, have people or groups make their decisions, requests or predictions in separate pods and find value in the basis for their different decisions, ensuring reviewers are not prejudicial or have a selfish vested interest in one type of answer is integral to the success of the effort — find the very best judgment referees.

Noise Takeaway #25 —The Universality of Noise

  • after reading Noise, it’s clear to me is that the concept of noise is relevant for every domain where decisions and judgements are made, in some areas there is more allowance for noise, but in all areas unwanted noise can be reduced
  • we can be blind to the obvious, and we are also blind to our blindness, the statement distills a truth about humans as inherently flawed creative beings, our checkered ability to recognize and acknowledge the obvious (and recognize the fact we have done so) often eludes us
  • in many cases, the smartest and most confident among us can particularly be the most engrossed in our perceptions and biases that we overlook the simple truths that lie before us; embrace the fact that our understanding of reality is far from infallible

Takeaway #25: Recognizing the limitations of our perception and the importance of humility is paramount; eschewing overconfidence when we see it, having a respected independent jury of peers willing to feedback, stepping back and away from key decisions, and having some type of semi-objective system (perhaps aided by AI) are all good coping strategies.

Read our Part #1 — Stop The Noise Takeaways #1–9, and our Part #2— Stop the Noise Takeaways #10–18

Grey Swans — A Month of Specialty Posts:

This is a 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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