Shut Out Noise to Make Sound Decisions

Falsely accused of a crime you didn’t commit, you’ve finally been told to head to court for a 5pm hearing. Your lawyer reassures you your name can be cleared.

What are you worried about? The evidence that will be presented by the counterparty? Your representation? According to Daniel Kahneman, author of Thinking Fast & Slow and Noise, the real cause for concern is 5pm.

It’s the end of the day, judges are tired and Kahneman’s research shows that they will be less lenient with their sentencing. If it’s rearranged to 12 noon, you’ll have to hope they’ve had an early lunch.

Kahneman is shining a light on “noise”, which he calls “a flaw in human judgement”. Noise is different to bias. As he puts it: “bias is all shots landing systematically off-target in the same direction, noise is all over the place — aiming at the target and missing it.”

Why Does Noise Matter?

If receiving an unjust prison sentence isn’t enough to convince you noise matters, keep reading. Noise clouds our judgement and shapes our everyday decisions as a result. Noise distracts you from the facts when you’re making critically important decisions.

In the example above, the time of day drastically affects sentences. It refers to a 2011 study of more than 1,000 rulings by eight judges. The judges’ most lenient rulings coincided with early mornings and after breaks. At the end of the day or just before lunch, the chance of receiving a favourable ruling was zero.

We make on average 35,000 decisions per day. It’s no wonder the quality deteriorates over time or when we’re low on energy. The more worrying factor is that in our time-pressed society, we’re so used to making time-bound decisions that we fail to notice when our decision-making slips or when noise clouds our judgement.

I was recently reminded of the judge case study as I reviewed two prospective candidates’ assignments. After reviewing the first, the mid-afternoon slump swallowed me up and I succumbed to the siren call of the snack table.

Refuelled and recharged, I turned my attention to the second assignment. What clarity! This one is much stronger, I thought. Or am I much stronger? Was my empty stomach standing in the way of a candidate’s success? I decided not to give hungry Emily the benefit of the doubt and to re-read the first assignment post-snack. My initial decision held true, but much more detailed feedback jumped out at me, and my feedback was of higher quality.

This made me wonder how my behaviours would differ each day after a good meal, a good sleep, or when my mind is less preoccupied. How many job rejections are down to the candidate vs. a hangry reviewer? Would our world leaders make better decisions with the luxury of a good night’s sleep?

Be on the lookout for noise

Here are a few ways noise can show up.

Anchoring — “A wealthy car enthusiast told me Teslas cost half a million US Dollars in Singapore. What do they cost?” If you were browsing Teslas online in Singapore last week and had seen exact prices, you might correct me (it’s actually a mere ~$185k including the permit). If you weren’t, chances are your answer will be swayed by my anchoring and your guess will be closer to half a million than to the $185k. The information around the question distorts our judgement.

The statement doesn’t even need to be related to the answer. An anchoring bias study asked people for the last two digits of their social security number, e.g. 34. They were shown an array of products such as wine and chocolates. For each item, they were asked two questions: Are you willing to pay your two-digit number? (e.g. $34). What’s the maximum amount you are willing to pay?

People whose random social security number digits were higher were willing to pay significantly more for the same products compared to those with lower numbers.

Incredibly, according to The Decision Lab “the anchoring bias also holds when anchors are obtained by rolling dice or spinning a wheel and even when researchers remind people that the anchor is irrelevant.”

Perception — Phil Barden’s Decoded explains that “our attention is driven by what we value at a given time”.

An eye-tracking study analysed participants’ focus as they wandered a busy highstreet. Those who were hungry focused on a McDonald’s sign to the right, whereas those who were not turned their attention towards the high street shops on the left.

Our basic needs have the power to alter how we see the world, let alone the decisions we make. This study has stuck with me since I first read the book in 2018 and I often catch myself eagerly eyeing all food outlets I pass when I’m walking along feeling peckish.

Systems — In Malcolm Gladwell’s Outliers he references the Canadian Junior A hockey team — the pool from which the nation’s top future ice hockey players are selected.

He challenges the meritocratic way in which individual kids work their way up by showing patterns in the data: “in any elite group of hockey players 40 percent of the players will have been born between January and March, 30 percent between April and June, 20 percent between July and September, and 10 percent between October and December.”

The January 1st eligibility cutoff date for age-class hockey is the culprit — introducing noise (a 12-month maturity gap) that prevents players born in December from meeting the standard of players born in January.

It’s not bias — the selected kids are bigger and better, fair and square, it’s a glitch in the system.

The stakes are high

Lots of the above examples speak to “distraction”. If we’re hungry, our focus shifts. If someone prefaces a question with a statement, our thoughts are anchored in that statement.

Insurance premium quotes can vary by up to 55% depending on the underwriter.

If we assume underwriters work relatively undisturbed in an environment that allows them to focus, what about sports referees or medical professionals in an emergency ward? The stakes are high and the (both literal and figurative) noise levels around them are high too.

What does this mean for our working environments? Is a noisy open plan office where someone can be approached by any team member at any time a good environment for sound decision-making?

Cal Newport coined the concept of “Deep Work” and “Deep Rest” is also increasingly top-of-mind for people. We recognise the importance of focus in these moments. But decisions are often made in discussion with others, or asked of us at a moment’s notice. How do we cultivate an environment for “deep decision-making”?

Join readers like you who’ve signed up for The Weekly Roundup

Reduce the Noise

Less noise makes for sound decisions.

There’s a ‘biological needs’ thread running through many of the examples above so it’s no wonder one of the most common pieces of advice around decision-making is to “sleep on it”. It would be fair to add “eat on it”, “relax on it” and “walk on it” to the list.

Without the luxury of feeling satisfied vs. hangry and sleep-deprived as many of us do day-to-day, we need to explore other strategies:

• Get a second opinion independently to avoid group think

• Take a second look and sandwich a separate task in the middle — especially a task that requires little brainpower

• Appeal to your gut: write down the 2 options in “tweet” form on a piece of paper and leave it on a table. Walk away and ignore it. Come back later and immediately circle the one you’re drawn to the most. It gives an indication of your gut response before your logical brain kicks in.

Use Noise to your Advantage

Knowledge is power. Now you know to look for noise, you’ll start to see others affected by it. Don’t fall victim to poor decision-making. Use noise to guide your approach. You may even consider creating noise to sway a decision in your favour.

Data suggests you should ask for that raise early in the day. People are much more likely to give favourable decisions.

But it’s worth going beyond the data and checking your colleague’s calendar — how’s their day looking? Will they have had a chance to grab lunch? How will they be feeling from the meeting before? A wrongly timed meeting starts any conversation on the back foot.

Perhaps you realise on the day itself that the person’s stress levels aren’t conducive to the conversation you’d planned: acknowledge how they’re feeling and suggest moving it. Set yourself up for better by reducing the noise for others.

In negotiation, it’s time to create noise. Like the Tesla example above, negotiators often distort perceptions by tabling information that sets the bar high or frames expectations, before putting their own offer on the table. Providing factual information such as market rate salaries or opening with a more extreme figure can change the listener’s frame of reference.

In a world where we’re working hard to eliminate bias and discrimination, it’s easy to forget that noise sneaks in to cloud our judgement, often unnoticed and out of our control. Sharpening our awareness of noise and using this to our advantage is the key to sound decision-making.

If nothing else, have a snack and sleep on it.

Love to live life on the edge? Take a chance on one of the buttons below.