Issue link: https://beckershealthcare.uberflip.com/i/1383677
43 WOMEN'S LEADERSHIP 43 CEO / STRATEGY The ironically quiet threat plaguing organizations By Molly Gamble N oise is unwanted variability in judg- ments that should be identical, and most senior executives underesti- mate just how loud it is within their organi- zations. e term comes from three prominent pro- fessors: Nobel Prize-winning psychologist Daniel Kahneman, PhD, with Princeton Uni- versity; Olivier Sibony, PhD, with HEC Paris and Oxford's Saïd Business School; and Cass Sunstein, founder and director of the Pro- gram on Behavioral Economics and Public Policy at Harvard Law School. e premise is the thesis of their new 400-page book aptly titled, Noise: A Flaw in Human Judgment. One example of noise the authors put forth is turning to three different physicians for con- sults and receiving three different opinions. "So your three physicians made judgments about the same case, and we would expect them to give identical answers. e fact that they're variable is an indication that something is wrong with the system," Dr. Kahneman told WBUR. Noise differs from bias. Dr. Sibony illustrates bias with an analogy of stepping on the scale each morning to receive a weight that is one pound lighter than you actually are, on av- erage, every day. Noise is stepping on scale three times in rapid succession and receiv- ing a different number each time — random variability of something that should be the same. Ironically, noise is usually quiet and unde- tected in systems. When the professorial trio asked 828 senior executives in a variety of industries how much variation they expected to find in expert judgments, the median an- swer was 10 percent. In reality, the variation in expert judgments can be four to five times that. e reason noise is easy to underestimate? We don't anticipate people seeing the world differently from how we do. "And therefore we can't imagine that there is as much noise as there is," Dr. Sibony told WBUR. Furthermore, noise can only be identified in statistics, making it more difficult to think about and more likely to go undiscussed, Dr. Kahneman told nonprofit media outlet net- work, e Conversation. Physicians and medicine are hardly the only profession with risk for noise. A noise audit for an insurance company found the medi- an difference in the pricing determined by its underwriters for identical policies was 55 percent. e median difference in the payouts determined by its claims adjusters for identical claims was 43 percent. A senior executive estimated that the annual cost of this unwanted variability totaled hundreds of millions of dollars, according to strate- gy+business magazine. Noise exists in crim- inal sentencing, job interviewing, fingerprint examinations and employee performance re- views, among other fields and functions. Human complexity and our cognitive flaws mean there is no straightforward way to eliminate noise, although the authors offer advice for curbing it in decision-making. eir recommendations include conducting noise audits to better understand the level of noise within organizations and practice de- cision-making hygiene in singular decisions, which involves sequencing information, re- sisting "premature intuition" (the feeling you "know" something even if you are not sure why) and dividing complex judgments into more digestible components. n for them and also creating models that are reproducible across organizations. We are looking to take a leadership role to improve care in the United States." Morgan Health said it has three core focus areas at its launch: improving healthcare by investing $250 million into organizations that are improving employer-sponsored healthcare; piloting new benefits for employees; and promoting healthcare equity for its employees and the broader community. One employee benefit Morgan Health will be piloting is ad- vanced primary care, Mr. Mendelson said. Morgan Health said it is working to create improved primary care capacity to enable employees to better navigate the healthcare sys- tem. One example of this is instead of having employees see just a primary care physician, they would be directed to a clinic that leverages more healthcare talent, such as pharmacists and nurses, to improve health outcomes. Morgan Health said it will work with a range of partners, including provider groups, health plans and other em- ployers. One such organization is CVS Health/Aetna, which is one of JPMorgan Chase's insurance carriers, Mr. Mendelson said. "CVS Health has a lot of innovation within the organization that we are not currently tapping into," Mr. Mendelson said. "It's a great example of a great American company that is ripe for further partnership and innovation in this effort." Morgan Health initially will have 20 dedicated employ- ees, but Mr. Mendelson said the healthcare unit is tap- ping talent from other existing departments at JPMorgan Chase, including its legal, communications and bene- fits departments. "This is a company that is very passionate about leading; there's a very deep reservoir of support from the organi- zation to accomplish the objectives," Mr. Mendelson said. "These are objectives that are hard — it will take us time to accomplish and to show meaningful improvement. But there's a sense that this is so important that there's going to be a sustained effort in this regard and that we will achieve our objectives together." Prior to joining Morgan Health, Mr. Mendelson served as an operating partner at private equity firm Welsh, Carson, Anderson & Stowe. He also is the founder and former CEO of healthcare advisory firm Avalere Health and worked in the White House Office of Management and Budget during the Clinton administration. Mr. Mendelson said his passion for establishing collabo- rative partnerships in healthcare will help him succeed in his new role. n Continued from page 42.