Noise to Signal Ratio in Decision-making

Black Swan Thinking > Best Practices

Noise to Signal Ratio in Decision-making
Jos Nieland, Teacher, Netherlands, SIG Leader
In Taleb's book "Fooled by Randomness", noise versus signal plays an important role.
If you are making complex decisions, exposure to too much data can cause severe side-effects.
Nowadays there's lots of data, because of the blessings of computers and connectivity, but the share of non-relevant data increases as one gets more immersed into it.
Beware of data overloadData can be very toxic in large quantities for decision-makers, even in moderate quantities. Note that the more frequently you look at data, the more noise you are likely to get (rather than the valuable part called the signal); hence the higher the 'noise to signal ratio'.
Say you look at stock price information on a yearly basis and that at this yearly frequency the ratio of signal to noise is about one to one (say half noise, half signal). That means about half of change...Sign up

Noise to Signal Ratio in Decision Making
Mauricio Calderon Ortiz, Consultant, Spain, Member
Keeping the indicators included in the control board limited to those that reflect value added towards what the organization cares about is one...Sign up

Noise to Signal Ratios
Chapados, CEO, United States, Member
I have three thoughts about the noise to signal ratio in decision making.
1. Knowing if the decision needs to be tactical (dealing with t...Sign up

Separating the Noise from the Signals
McCallum, Accountant, Australia, Member
Is there a precise definition for the signal within the background noise; or is relative to the stated objectives of the organisation?
Reg...Sign up

Nice But in Itself Represents Noise
Abdul Majid Ashraf, Manager, United States, Member
This is a nicely logical theory which ironically itself is noise in a sea of theories, this one saying less is more.
To me though it's a ...Sign up

3 Categories of Decision Data
Andrew Blaine, Business Consultant, South Africa, Member
Firstly I think the ratio is misnamed, it should be signal to noise ratio as the signal is the valuable part.
Secondly, one effective way to limi...Sign up

Let the Users Select
Alpin McGregor, freeelance, United Kingdom, Member
If an organisation rations data being distributed it may exclude information that is useful. If the organisation merely allows all data to be accessib...Sign up

Design Filters to Separate the Signal from Noise
FAYEZ, Management Consultant, Saudi Arabia, Member
We can look at it as trying to listen to a radio station with noise from other broadcasting stations.
Designing specific filters would hel...Sign up

Noise to Signal Ratio Dependent on Trust
Stibbe, Business Consultant, Netherlands, Member
Noise and signal are both dependent on trust (acceptance) in the sender. If the sender has a high trust profile, a signal and some key data are enough...Sign up

The Importance of Meaning in Resonate the Noise
Mohamad Reza Golgol, Manager, Iran, Member
Thanks Mr. Jos Nieland for telling us about this important comment by Taleb. I need to study more about this matter, and also I want to note the im...Sign up

The Noise versus the Signal in Decision-making
Belay Gezahegn, Director, Ethiopia, Member
It seems that decision making processes involves two processes:
1. Making decision based on the decider's ability with zero consumption of exter...Sign up

Data. Information, Knowledge and Wisdom
What's the difference between data, information, knowledge and wisdom? If data is toxic in large quantities is that due to lack of information, knowle...Sign up

Noise to Signal Ratio in Decision Making
Charis, Strategy Consultant, India, Member
Raw data versus filtered data, acceptance of the data from the source of filtration, degree of skew, drawing up the logic tree from accepted, filtered...Sign up

Data. Information, Knowledge and Wisdom
Jaap de Jonge, CEO, Netherlands, Editor
@Benhoumeur : Interesting question, to appreciate the differences between data, information, content, knowledge (and...Sign up

Noise Signal and Objectives
Jos Nieland, Teacher, Netherlands, SIG Leader
@McCallum: if the objectives are simple and clear it will be easier to recognize noise and signal....Sign up

Data Information Knowledge Wisdom
Andrew Clark, Business Consultant, Australia, Member
@Benhoumeur: I think you are correct, and that there is a lot of noise and confusion in this debate.
DataSign up

From Knowledge to Wisdom?
I would think that wisdom should be ranked above knowledge.
It's not easy to move from knowledge to wisdom.
Experts can lack wisdom. To my...Sign up

Wisdom, Knowledge and Character
Andrew Clark, Business Consultant, Australia, Member
@Benhoumeur: I disagree, wisdom comes from age and extraordinary experience carried on the back of character born of...Sign up

Wisdom, Knowledge an Time
@Andrew Clark : I half agree, wisdom is of course built on experiences and on knowledge (academic). Wisdom is here t...Sign up

Signal, Causes and Symptoms
Can we use signs, causes and symptoms interchangeably. If no. What is the differences between these concepts?...Sign up

Signs Symptoms and Causes
Chapados, CEO, United States, Member
Classically, a sign is an indication of a problem that can be objectively measured and might or might not be noticed by a person or group with ...Sign up

Knowledge and Wisdom
Andrew Blaine, Business Consultant, South Africa, Member
@Andrew Clark: I am not certain that I agree with your definition of wisdom. Wisdom is surely derived from the manne...Sign up

Clarifying what Wisdom Actually Is
Andrew Clark, Business Consultant, Australia, Member
@Andrew Blaine: Andrew, I know what you mean about knowledge accumulation not being the same as wisdom. If you spend...Sign up

Refocus on Signal / Noise Ratio in Decision-making
Jaap de Jonge, CEO, Netherlands, Editor
I agree with Andrew Clark that the discussion has drifted a little off topic. From here on after, no more reactions will be allowed on wisdom....Sign up


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