Noise: How to Overcome the High, Hidden Cost of Inconsistent Decision Making

Good article about noise vs bias in decision making.

“D” shows that with both noise and bias the right decision might be made at times.

That looks like a discussion of Accuracy vs Precision but using sightly different terms.

Accuracy is the ability of the instrument to measure the accurate value. In other words, it is the closeness of the measured value to a standard or true value.

Precision means two or more values of the measurements are closed to each other. In other words, it is the ability of a given instrument to repeatedly give the same reading.

In shooting, accuracy is how close you are to the bullseye (the average center of all your shots) whereas precision is how tight of a grouping you have.



The Navy spent a lot of money beating that into my head when I was training as a medical lab tech.

The terms precision and accuracy can be good terms for describing measurements, you could say imprecision is caused by noise and lack of accuracy caused by bias.

When evaluating a plan the terms noise and bias work better. For example an over-confident mariner might make plans biased towards too much risk.

On the other hand an incompetent mariner not following any set procedure may make plans that are high noise, inconsistent, sometimes more risk, sometimes less.

The planning of a mariner that is incompetent and has a high tolerance for risk will be both biased towards risk and inconsistent.

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This is somewhat analogous to ship board security. It’s understood that it’s not possible to achieve 100% security, just trying to mitigate the risk at low cost. It called hardening the target in ship security.

With decision making errors can’t be eliminated entirely, the goal is to reduce the amount of error.