What is Signal and What is Noise?


Train signalsYears ago, my father owned a company that made a business of storing information on microfiche. (Remember microfiche?) As the computer age dawned, he was definitely an early adopter and enthusiast in our home. He was swept up in the latest and greatest developments and it seemed as if he read everything published about computers and computing. He was caught up in all the chatter and noise about this new industry, but the irony is, he missed the one true signal he needed to hear: computers would revolutionize the information storage industry.

If he had paid attention to the signal instead of the noise, perhaps his company would have been an industry leader today. But instead, he missed the opportunity to innovate, shuttered the company in the early 80s and moved on to other ventures.

My dad’s a smart guy, and he’s definitely not the only one to miss the signal in the midst of all the noise. New ideas are emerging all the time, with more and more speed it seems, and it’s hard to recognize what’s a fad and what will become entrenched fashion.

In philanthropy, we tend to lean toward the assumption that most of what’s new is noise. And sometimes we’re right. But sometimes we miss the boat.

How many of us pooh-pooh’ed Twitter as just a way to share what you had for lunch? Now it’s a standard means of foundation communications while many early iconic social media platforms have fizzled.

How many of us thought that policy advocacy would never be an appropriate foundation activity? Now it’s becoming a staple of philanthropic strategy.

How many of us are currently engrossed in crowd-funding or crowd-sourcing, and how many of us think it will eventually prove to be ineffective? (I think it remains to be seen.)

The challenge in separating signal from noise is not to jump on something new just because it’s enthralling, or to push it off as inconsequential – but to really think through its applications for your work or your life. How does it apply to your current reality? How might it support or detract from your forward movement?

The bottom line for evaluating signal versus noise is as timeless as the invention of the wheel:

  • What is it you’re trying to accomplish? Are you trying to create microfiche files or provide information storage? Do you want to feed the hungry or eliminate hunger?
  • How might the new idea or invention you’re considering help you accomplish your goal? If your business is data storage, then any development that makes that faster and easier is worth consideration. If your goal is to provide just-in-time bed space for domestic violence victims, then a crowdfunding app to pay for hotel rooms might be ideal. If you want to prevent violence, perhaps an advocacy-related app is more appropriate.
  • Does this new idea change your strategy? Or is it a tool to help you implement your strategy more effectively? Information storage is still information storage, no matter what media you use. New inventions and trends usually fall in the “tools” column, although they often get treated as strategies. Be clear about the difference.
  • Whose opinions and knowledge can help feed your perspective? Tunnel vision is one of the biggest hurdles in determining the difference between signal and noise. Trade all the chatter for deeper, quiet conversations with others in the field whose insight and opinions you trust.

As I often tell our children – just because something seems like a good idea doesn’t mean it is. And just because something seems superfluous at first doesn’t mean it won’t take root. In evaluating signal versus noise, we have to examine all aspects of the issue, weighing our gut reactions against logical arguments for and against. When we do that well, we can leverage the trends that are most likely to enhance our effectiveness.

© 2015 Kris Putnam-Walkerly. All rights reserved. Permission granted to excerpt or reprint with attribution.

Kris Putnam-Walkerly is a philanthropy expert and advisor. To learn more about how to sledgehammer bureaucracy and streamline your giving, read “Why RFPs Waste Time,” “Stop the Board Docket Madness,” and “Delusional Altruism.”

Kris will is speaking November 12th on “Tips, Tools and Lessons on Multi-Media Storytelling” at the Southeastern Council on Foundations annual meeting in Asheville, NC.

Kris is a sought after philanthropy advisor, expert and award-winning author. She has helped over 90 foundations and philanthropists strategically allocate and assess over half a billion dollars in grants and gifts.

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