Logic and meaningful choices don’t always go hand in hand. There are instances when decision-making seems like it should be logical and make sense, but for reasons inexplicable, it turns out to be neither. Typically, this comes down to irrational thinking stemming from one specific flaw in human judgement. Prominent psychologist Daniel Kahneman calls it “noise”. And in his fantastic book “Noise: A Flaw in Human Judgement”, he gives us valuable actionable tips on what to do about it.
Noise in a nutshell
Daniel Kahneman has been researching the human mind for decades. After years of research, he finally discovered how our brains are constantly influenced by our surroundings and how we can control them.
Noise deliberates what happens when we experience aspects of life as too noisy or confusing. The book offers us insight into human behaviour by investigating our instinctive systems that cannot be controlled by rational thinking. But rather, it’s our emotions that play a big part in influencing decisions.
What is noise? How is it different from bias?
“Noise” is a term that Daniel Kahneman uses to describe the cognitive illusions that people have about their own judgements. Noise is a key concept in the book and is defined as “the sum of all information that we receive but fail to attend to.” It includes all the things that interfere with our ability to understand and make decisions about what’s going on around us.
For instance, when you see a professional-looking person with a briefcase, you may have difficulty forming a first impression about who they are—a lawyer, a banker, a manager, or even an independent consultant. That’s the noise in your head, hampering your attempts to form a judgement.
But with bias, you would automatically assume that the person was a banker. Bias is an error in judgement powered by automatic assumptions such as “suit and briefcase equals banker.” Where bias is a conscious decision or preference, noise is just an illusion of what we think we are doing when, in reality, we are not doing anything. Bias, according to Kahneman, is a “systematic deviation”, whereas noise is a “random scatter”—both are the different components that cause the same error.
Wherever there is judgement, there is noise
In the world of social media, there is a lot of judgement. The judgement is mostly based on the content that we share and what we say. This can lead to a lot of noise, and it can be hard to find what you are looking for.
The noise in our heads is something we often try to avoid and ignore. It can be overwhelming and make us feel like we are not good enough or that there is something wrong with us. This noise regularly leads to feelings of guilt, shame, depression, and anxiety—any single one of which can impair judgement.
What causes noise in judgement?
Given equal scenarios and the same set of circumstances, two individuals will often come to different judgements. Daniel Kahneman chalks it down to three sources of noise:
- Level noise: The individual’s ability to make decisions based on their past experiences. The person may not have had enough time to weigh all the available information.
- Occasion noise: The impact of surrounding circumstances and external factors such as time, weather, location, and culture. It is mostly because of differences in the attention span across different people.
- Pattern noise: The influence of the same situations being repeated over time. It can also be is due to the fundamental attribution error, which means that people tend to attribute someone’s behaviour based on their character rather than the situation they are in.
The six ways to overcome noise
Daniel Kahneman then proceeds to explain different measures one can use to overcome noise. He proposes practising “decision hygiene.” He likens decision hygiene to washing your hands to protect against germs.
1. Recognise that accuracy, not individual expression, drives decision-making.
Accuracy can be achieved when individuals rely on good decision-making skills and a thorough understanding of their goals and objectives.
When you’re in a position of power, it’s tempting to say whatever you want and do whatever you like without taking the time to think about the consequences. This can lead to bad decisions that can damage your reputation and your company’s bottom line. But focusing on accuracy and using all the information at hand can lead to better decisions.
2. Apply a statistical view and look at the situation objectively
A statistical view is an approach to making choices where the research is done without personal bias. This approach takes a data-driven and objective perspective that allows for better decisions when it comes to business, relationships, and other areas of life. The statistical view is often used when there is a large amount of data, and it can be very helpful in making decisions.
3. Divide judgement into separate tasks
Separating judgement into different tasks eradicates the problem of “excessive coherence”. The “excessive coherence” problem arises when people lie about facts that don’t fit into a story. This problem prevents people from making good choices because they feel like they’re no longer able to make independent judgements about their actions and situations. The solution to this issue is to integrate the process of judgement and decision-making into different tasks.
4. Delay intuitive thinking
When individuals or organisations put off rational thinking and make decisions based on their intuition, they ignore the value of truly understanding their decision and reasoning process. Intuitive decision-making can be influenced by an individual’s or a group’s collective emotions, which is why these decisions are often more impulsive and less reliable. The author suggests that the ability to delay intuitive thinking and avoid jumping to conclusions is crucial for making better choices.
5. Include the opinions of various impartial observers.
When making a decision, it is important to remember that everyone has different opinions. The opinions of impartial observers can uncover many potential issues which may otherwise have been overlooked. Using the opinions of impartial observers can help individuals and organisations make better decisions. The perspective of those who would be impacted by the decision can help organisations reach a better solution and also avoid mistakes in judgement.
6. Always favour relative judgements over absolute ones
Relative judgements are more stable and can be applied consistently throughout a given situation. Absolute judgements are not as reliable because they must be addressed in relation to different factors. When we make decisions, we often find ourselves in a situation where two different choices have both pros and cons. Kahneman believes that relative judgements are helpful in making these choices because they allow individuals to make more informed decisions. They also provide a more holistic view of a problem or situation.
Wrap up
Noise is a powerful book that has been translated into more than 30 languages and has sold over 6 million copies worldwide. It is a must-read for anyone interested in the psychology of decision-making, cognitive bias, and behavioural economics.