The Signal and the Noise: Bayes Rules!

The concept of signal versus noise is one of the fundamental concepts citizens, consumers, and business people need to understand (but usually do not).

As performance improvement professionals signal and noise, and filtering one from the other, is a cornerstone of the ideas of characterizing process behavior and improving it. Nate Silver’s book, The Signal and the Noise is, therefore, a welcome vehicle and opportunity for raising awareness and education on this vital topic.

In particular, I think Silver does a good job of communicating the nature and fundamental insight of Bayes’ Theorem using practical examples such as the dominance of false positives of mammograms for women in their forties.

A note for all you Lean Six Sigma practitioners out there: see if you can spot the errors (there are at least two) in figure 1-2 on page 28.

Speaking of Bayes’ Theorem, there are a number of books published recently on the work of Thomas Bayes (born 1701 or perhaps 1702), an English minister. One is “Proving History: Bayes’s Theorem and the Quest for the Historical Jesus” in which author Richard Carrier applies Baye’s Theorem to historical studies including the analysis of the historical Jesus. Another is Sharon McGrayne’s “The Theory That Would Not Die: How Bayes’ Rule Cracked the Enigma Code, Hunted Down Russian Submarines, and Emerged Triumphant from Two Centuries of Controversy.”

Bayes Rules!