Signal to Noise

In physics, the SNR – signal to noise ratio is the basically the power of signal (the information we want) divided by the power of noise (the information we don’t want).

In our business and personal lives, maybe the same principle applies. And therein lies a challenge.

The signal we look for – things that are meaningful to us – the art, relationships, meaning and the contribution we can make, amongst many others, is pretty much a constant. when we have clarity of purpose, when we are loved, we don’t go round saying I need more of it. These things are not consumables.

On the other hand, the noise in amongst which we look for signal has increased exponentially. The ability to communicate , social media, advertising, a drive to consume, and spam in all it’s forms has changed our signal to noise rations out of all proportion in the last twenty years. When we don’t understand that, we can lose signal altogether in trying to deal with the noise.

But there’s an upside. Without noise, we wouldn’t be able to identify signal. It provides the contrast, the background that allows us to separate one from the other.

But we have to give signal a chance. Processes to get rid of noise are all very well, but they may just take signal with them. Penzias and Wilson in 1964 tried for three years to get rid of background noise in their experiments, only to find that it contained the information that would win them a Nobel Prize.

To separate signal from noise we need to give it space. Time out. An opportunity to reflect. The time to discuss with others without an agenda – time to let our brilliant brains do what they do best – make connections that computers can’t. As yet, digital devices process brilliantly, but don’t wonder about things.

It’s Sunday. Use it to advantage.

Have a great week ahead.

The Clarity Factor

One of the highlights at the end of the year is the BBC Reith Lecture. They are always worth listening to, and this year, the topic is “Why doctors fail”, with Dr. Atul Gawande. One of the key messages is that we could save and improve more lives by using what we know more effectively, rather than searching for new knowledge. Nassim Nicholas Taleb makes a similar point in his concept of anti fragility ( it’s a challenging concept, and a brilliant book. Here’s a five minute introduction)

In his book, Taleb makes much of  Iatrogenics – the term used to define the unintentional damage done by Doctors. I think the same is true of many businesses.

We now have more tools, and more data that at any time in our history, but we often either fail to use it, or misuse it, in a search for the next big thing and in doing so create the potential for significant damage without realising it.

Business is simple. Creating something that adds value to people’s lives that they will pay more for than it costs to create. In our search for shortcuts, we have created unnecessarily complicated products (including financial devices that nobody really understood).

BCG calculated that business complexity has increased by a factor of six since 1955, but that business complicatedness has increased by a factor of thirty five – almost a power law. Here’s a 12 min video of Yves Morieux explaining:

As complexity increases further, the implications of this power law are frightening.

We have all we need to create and run great businesses. We do not need magic potions.

We do need clarity and purpose. With these in place, everything else follows. Investment in generating clarity pays.