Book Review – Noise: A Flaw in Human Judgment

Ever wonder why people make bad decisions? If so, Noise: a Flaw in Human Judgment by Daniel Kahneman, Oliver Sibony, and Cass R. Sunstein should make your holiday gift wish list. The New York Times bestseller sheds light on how people make decisions.

More than that, this insightful book may also help you tune out the noise that interferes with judgment. This could reduce variability and help you make sound choices.

The authors argue that bad decisions often come down to noise clouding your judgment. They distinguish between systematic deviation or bias, and random scatter, AKA noise. Ultimately noise seems to do as much damage as bias.

The authors each impart their expertise. Daniel Kahneman has already won the Nobel Memorial Prize in Economic Sciences for his work on behavioral economics. Olivier Sibony teaches business strategy at HEC Paris and formerly worked as a partner at McKinsey. And Cass R. Sunstein is a distinguished legal scholar and behavioral economist currently teaching at Harvard.

The stakes certainly are high. Gartner has found that poor operational decisions alone can cost 3 percent of profits. Meanwhile, research suggests that the average adult makes roughly 35,000 “remotely conscious” decisions per day. Choosing between orange juice or coffee may not matter, but deciding which candidate to hire or which marketing campaign to focus on may ultimately determine your business’s success or failure.