By Daniel Kahneman, Oliver Sibony and Cass R. Sunstein
When I started my Psychology degree way back in 1989 Daniel Kahneman was already one of the most influential researchers in social psychology. Along with his long time collaborator Amos Tversky he produced much of the pioneering work on decision making, judgement and cognitive bias. He has published a number of books over his career but exploded into public consciousness with the bestselling “Thinking Fast and Slow” in 2012.
I’m feeling a bit nostalgic for 1989 thanks to the first section of the book which felt like a recap of psych 101 and statistics 101. While the writing style and language are easy to follow some of the math and science can be complicated. Even though I was familiar with most of the concepts already it was a bit hard going at some parts. However this laid important groundwork for the content to follow.
The term “noise” refers to system noise,” or unwanted variability within a system of judgments. Bias refers to people’s systematic but flawed patterns of responses to judgment and decision problems.
Some judgments are biased; they are systematically off target. Other judgments are noisy, as people who are expected to agree, end up at very different points around the target.
Wherever there is judgment, there is noise—and more of it than you think.
The Real World
The middle of the book explores the different types of noise and bias with lots of real life examples and the different approaches that have been taken to improve decision making. For example studies have shown that judges will give widely different sentences for the same crime. While some of this is expected due to the differing circumstances of the perpretator other influencing factors were unexpected. Such as time of day, the weather, the individual judge, their mood and fatigue levels at the time. Clearly these are undesirable influences and strategies such as sentencing guidelines have attempted to control their effect.
Where “Noise” really blew my mind was when they took all the different concepts and combined them into real world management advice. A radically different approach to recruitment used by Google was described. The approach acknowledges that traditional interviews are a poor predictor of job success and relies more on aptitude testing, work samples and references from existing Google employees.
The Mediating Assessments Protocol is an approach to strategic decision making. I wish I had known about this when I was a board chair! This approach delays intuitive decisions and group think by requiring that you:
- Define each assessment criteria in advance
- Use fact-based independently made assessments
Once individuals have a good grasp of the facts the group can come together to discuss and use an iterative process to come to a consensus decision.
I gained a lot of learning and insight from the book and would recommend it to managers, quality professionals and anyone interested in improving the quality of their decision making.
Have you read the book? What did you think?