"Noise. The Imperfections of Human Judgment" by Daniel Kahneman, Olivier Sibony and Cass R. Sunstein

This time we will talk about a book whose title obliges us to include in our review only what can be interpreted unambiguously. Very eminent authors talk about how to choose strategies and make decisions (and what cognitive pitfalls there are). Among them is the recently departed Nobel laureate in economics, Daniel Kahneman. He is well known to Russian-speaking and other readers as the author of the bestseller “Think Slowly… Decide Fast.” The co-authors were Olivier Sibony, a professor at the Ecole Supérieure de Commerce in Paris with extensive research on the quality of strategic decisions, and Harvard professor Cass Sunstein.

The reading we offer today is not devoid of American flair, but is still universal. Perhaps, with the exception of examples such as decision-making in court proceedings – in the United States, case law is case law, and cases are often tried by a jury. We also have such an institution, but when reading it is still worth making allowances for differences in legal systems and other things.

So, noise. By this concept, the authors mean systematic deviations and scattering of judgments, which ultimately lead to errors. For example, when a group of people make several erroneous opinions and, without knowing it, move away from the truth, reinforcing each other’s wrongness. But it is worth noting that three professors wrote a multi-page book about all this, so what we described in a nutshell is also not worth taking as truth. The category of noise is multifaceted, cannot be described in a simple concept and requires qualitative explanations.

From the very first pages, using the example of targets, much becomes clearer. For example, if in a shooting range all participants hit the top ten, then the obvious fact will be the accuracy of the players and the serviceability of the weapon they chose. If all participants hit almost the same point, but with a displacement, then we can assume that they all showed the same accuracy, but, let’s say, the sight was knocked down. There are other situations when bullet holes are dispersed throughout the target field, like judgments in meetings and negotiations. And if you approach the target from the back side, you will see only a sieve – without any coordinate system. The same thing sometimes happens at work and in business: judgments can create noise.

If you try to criticize the book, then you think about why the reader doesn’t simply study a good Soviet textbook on logic and a base on cognitive distortions. These two tools can positively influence thinking and life, and then, it seems, it is not necessary to read Kahneman and his friends.

However, the authors offer reading not only their vision, but also practical exercises. This reading habit is a good one. Turns on the brain and transforms what you just read into some experience.

As for the content, we will make judgments in favor of reading with a bulleted list:

The authors state that “noise can be detected and measured without knowing anything about the target or the offset—one of its fundamental properties.” Let's remember that example with the back side of the target – once. The fact that noise can be measured is two. If something can be measured, then it can already be used in business;
Examples about noise from the book are not only about business, but also about medicine, guardianship, insurance cases, personnel issues, forensics and other areas of activity. Doctors also make decisions, and sometimes they make mistakes. Or they make the right decisions, but there is still a lot of noise around. For example, the authors call psychiatry one of the noisiest branches in medicine for the high level of subjective judgments in it;
There is not much in the book about noise in the issuance of patents, but there is some: “The authors of a leading study on patent applications emphasize the role of noise: “The outcome of a patent application depends largely on who is assigned to review it.” From an impartiality perspective, such variability is of course a concern.” Again, we make allowances for the fact that this is a different country and a completely different approach to approving an application, but it’s interesting to read;
The book has interesting ideas about the architecture of choice. The very approach to decision making as architecture is progressive;
The team of authors systematized the subtypes of noise. It turned out popular and very good;
Much attention is paid to forecasting: planning error, strategic decisions, understanding cause-and-effect relationships, correlation and forecast accuracy. If you are a forward-thinking leader, you will most likely gain interesting information for yourself;
Surely everyone will find something of their own in this book. The missing puzzle that critical thinking or just reading comprehension needs. For example, in our opinion, the thesis about ways to regulate behavior, namely rules and standards, turned out to be interesting. “The rules are created to eliminate the possibility of alternative solutions. The standards encourage freedom of action depending on the situation,” the authors write.

The last one, about rules and standards, is like a filter for judgments. You can see how having a clear rule reduces the noise. This is good, but there is a nuance. In reality, there is much more “interference,” and Kahneman and his colleagues write about this in detail.

In general, if you want to analyze decisions in your organization, subject the judgments of colleagues and subordinates to audit, make forecasts, or simply learn to observe and identify distortions, then this book is definitely for you.

Draw for registration of 5 trademarks.

Useful from Online Patent: