Members in the Media
From: Harvard Business Review

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

Harvard Business Review:

At a global financial services firm we worked with, a longtime customer accidentally submitted the same application file to two offices. Though the employees who reviewed the file were supposed to follow the same guidelines—and thus arrive at similar outcomes—the separate offices returned very different quotes. Taken aback, the customer gave the business to a competitor. From the point of view of the firm, employees in the same role should have been interchangeable, but in this case they were not. Unfortunately, this is a common problem.

Professionals in many organizations are assigned arbitrarily to cases: appraisers in credit-rating agencies, physicians in emergency rooms, underwriters of loans and insurance, and others. Organizations expect consistency from these professionals: Identical cases should be treated similarly, if not identically. The problem is that humans are unreliable decision makers; their judgments are strongly influenced by irrelevant factors, such as their current mood, the time since their last meal, and the weather. We call the chance variability of judgments noise. It is an invisible tax on the bottom line of many companies.

Read the whole story: Harvard Business Review

More of our Members in the Media >


APS regularly opens certain online articles for discussion on our website. Effective February 2021, you must be a logged-in APS member to post comments. By posting a comment, you agree to our Community Guidelines and the display of your profile information, including your name and affiliation. Any opinions, findings, conclusions, or recommendations present in article comments are those of the writers and do not necessarily reflect the views of APS or the article’s author. For more information, please see our Community Guidelines.

Please login with your APS account to comment.