{"id":5328,"date":"2025-06-09T09:58:54","date_gmt":"2025-06-08T23:58:54","guid":{"rendered":"https:\/\/murrayslatter.me\/?p=5328"},"modified":"2025-06-09T09:58:57","modified_gmt":"2025-06-08T23:58:57","slug":"foundational-thinking-models-bayesian-updating","status":"publish","type":"post","link":"https:\/\/murrayslatter.me\/?p=5328","title":{"rendered":"Foundational Thinking Models: Bayesian Updating"},"content":{"rendered":"\n<h3 class=\"wp-block-heading\">Turning New Information into Better Decisions<\/h3>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p>Bayesian Updating \u201cWhen the facts change, I change my mind. What do <em>you<\/em> do, sir?\u201d<br>\u2014 (often attributed to) John Maynard Keynes<\/p>\n\n\n\n<p>Bayesian Updating is a disciplined way to <em>revise<\/em> what you believe in light of fresh evidence.<br>At its heart sits <strong>Bayes\u2019 Theorem<\/strong>:<\/p>\n<\/blockquote>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p><strong>Posterior \u221d Prior \u00d7 Likelihood<\/strong><\/p>\n<\/blockquote>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Prior<\/strong> \u2013 your starting belief about how probable something is.<\/li>\n\n\n\n<li><strong>Likelihood<\/strong> \u2013 how compatible the new data are with each possible explanation.<\/li>\n\n\n\n<li><strong>Posterior<\/strong> \u2013 your <em>updated<\/em> belief after blending prior knowledge with new evidence.<\/li>\n<\/ul>\n\n\n\n<p>Repeat the cycle whenever new data arrive and your mental model stays \u201clive\u201d\u2014never frozen in yesterday\u2019s assumptions.<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h3 class=\"wp-block-heading\">2. Why Executives Should Care<\/h3>\n\n\n\n<ol class=\"wp-block-list\">\n<li><strong>Faster, clearer pivots.<\/strong> Markets move; so must your conviction levels. Bayesian thinking forces you to quantify <em>how much<\/em> a new signal should shift your stance\u2014avoiding knee-jerk overreactions <em>and<\/em> stubborn inertia.<\/li>\n\n\n\n<li><strong>Back-testing intuition.<\/strong> By writing down \u201cpriors\u201d (explicit assumptions) you create an audit trail. That transparency builds organisational learning.<\/li>\n\n\n\n<li><strong>Risk-weighted bets.<\/strong> Resource allocation, M&amp;A, pricing experiments\u2014each hinges on the probability of multiple futures. Bayesian updating keeps those probabilities realistic.<\/li>\n\n\n\n<li><strong>Culture of evidence.<\/strong> Teams learn that opinions are <em>provisional<\/em> until the next data point\u2014lowering ego friction and promoting constructive challenge.<\/li>\n<\/ol>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h3 class=\"wp-block-heading\">3. Core Principles in Plain English<\/h3>\n\n\n\n<figure class=\"wp-block-table\"><table class=\"has-fixed-layout\"><thead><tr><th>Principle<\/th><th>Executive Translation<\/th><\/tr><\/thead><tbody><tr><td><strong>Priors matter<\/strong><\/td><td>Start with <em>something<\/em>\u2014even a rough base rate\u2014before new info arrives.<\/td><\/tr><tr><td><strong>Signal vs. noise<\/strong><\/td><td>Weight evidence by its reliability (sample size, data quality).<\/td><\/tr><tr><td><strong>Continuous refinement<\/strong><\/td><td>Don\u2019t \u201cflip the switch\u201d; nudge beliefs each time data accrue.<\/td><\/tr><tr><td><strong>Explicit probabilities<\/strong><\/td><td>Replace vague words (\u201clikely\u201d, \u201crisky\u201d) with numbers or probability ranges.<\/td><\/tr><tr><td><strong>Decision thresholds<\/strong><\/td><td>Define in advance what posterior probability will trigger action.<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h3 class=\"wp-block-heading\">4. A Five-Step Bayesian Playbook for Leaders<\/h3>\n\n\n\n<ol class=\"wp-block-list\">\n<li><strong>Frame the question.<\/strong> <em>What<\/em> probability actually matters? (e.g., \u201cProbability a pilot market will reach $10 m ARR inside 24 months.\u201d)<\/li>\n\n\n\n<li><strong>Elicit your prior.<\/strong> Use base rates, industry benchmarks, historical internal projects, or expert judgement\u2014but write it down.<\/li>\n\n\n\n<li><strong>Gather evidence &amp; score its reliability.<\/strong> Design experiments, run pilots, or collect market intelligence.<\/li>\n\n\n\n<li><strong>Update numerically (or at least directionally).<\/strong> Even simple scoring (\u20132 to +2) keeps the process disciplined if formal maths feels heavy.<\/li>\n\n\n\n<li><strong>Act or iterate.<\/strong> Compare the new posterior to your decision thresholds. If still uncertain, design the <em>next<\/em> evidence-generating loop.<\/li>\n<\/ol>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h3 class=\"wp-block-heading\">5. Corporate Case Study \u2013 Netflix &amp; Original Content<\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>2011 prior belief:<\/strong> In-house originals <em>might<\/em> boost retention but represented untested creative risk. Prior probability that a flagship show would materially lower churn: ~30 %.<\/li>\n\n\n\n<li><strong>Evidence wave 1:<\/strong> Big-data analysis of viewer clusters showed strong latent demand for political thrillers + Kevin Spacey fan overlap. Likelihood of success under a \u201cHouse of Cards\u201d concept much <em>higher<\/em> than generic drama. Posterior rose to ~55 %.<\/li>\n\n\n\n<li><strong>Evidence wave 2:<\/strong> Pilot marketing test trailers yielded record click-throughs; competitor bidding dynamics signalled urgency. Posterior >80 %.<\/li>\n\n\n\n<li><strong>Decision:<\/strong> Green-light $100 m two-season order, pivoting Netflix strategy toward originals\u2014eventually transforming the industry.<\/li>\n<\/ul>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h3 class=\"wp-block-heading\">6. Common Pitfalls<\/h3>\n\n\n\n<figure class=\"wp-block-table\"><table class=\"has-fixed-layout\"><thead><tr><th>Trap<\/th><th>How to Counter<\/th><\/tr><\/thead><tbody><tr><td><strong>Over-anchoring on priors<\/strong><\/td><td>Schedule explicit \u201cprior re-sets\u201d at milestones; invite dissenting voices.<\/td><\/tr><tr><td><strong>Data myopia<\/strong> (ignoring outside base rates)<\/td><td>Start with <em>outside-view<\/em> statistics before adjusting with inside info.<\/td><\/tr><tr><td><strong>False precision<\/strong><\/td><td>Use ranges (e.g., 40-60 %) when data quality is low; avoid spurious decimals.<\/td><\/tr><tr><td><strong>Confirmation loops<\/strong><\/td><td>Build dashboards that surface <em>disconfirming<\/em> evidence by default.<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h3 class=\"wp-block-heading\">7. Action Checklist<\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Capture one key prior for each strategic initiative in your OKR system.<\/li>\n\n\n\n<li>Add a column for \u201cevidence weight\u201d in decision logs.<\/li>\n\n\n\n<li>Train product and finance teams in basic Bayesian language.<\/li>\n\n\n\n<li>Hold quarterly \u201cbelief-update\u201d sessions\u2014red-team style.<\/li>\n\n\n\n<li>Reward teams for <em>updating early<\/em>, not for always being right at the start.<\/li>\n<\/ul>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h3 class=\"wp-block-heading\">8. Quick Self-Assessment<\/h3>\n\n\n\n<ol class=\"wp-block-list\">\n<li>Can you name the implicit priors behind your next board paper?<\/li>\n\n\n\n<li>Do your dashboards flag how <em>much<\/em> a KPI change should shift beliefs\u2014or just show the change?<\/li>\n\n\n\n<li>When was the last time you <em>publicly lowered<\/em> confidence in a pet project?<\/li>\n<\/ol>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h3 class=\"wp-block-heading\">9. Reflection Prompts for Leadership Teams<\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Which long-held assumption about our customers feels least examined by fresh data?<\/li>\n\n\n\n<li>How could we create a \u201cminimum viable dataset\u201d to test it in the next 30 days?<\/li>\n\n\n\n<li>What decision thresholds would trigger a pivot\u2014and are they written down?<\/li>\n<\/ul>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h3 class=\"wp-block-heading\">10. Further Reading<\/h3>\n\n\n\n<ol class=\"wp-block-list\">\n<li><strong>\u201cThe Signal and the Noise\u201d \u2013 Nate Silver<\/strong> \u2013 Accessible intro with business examples.<\/li>\n\n\n\n<li><strong>\u201cSuperforecasting\u201d \u2013 Tetlock &amp; Gardner<\/strong> \u2013 Practical methods for probability calibration.<\/li>\n\n\n\n<li><strong>\u201cBayesian Statistics the Fun Way\u201d \u2013 Will Kurt<\/strong> \u2013 Gentle quantitative walkthroughs.<\/li>\n\n\n\n<li><strong>McKinsey Quarterly: \u201cBias Busters\u2014Updating Beliefs\u201d (2023)<\/strong> \u2013 Short case vignettes.<\/li>\n\n\n\n<li><strong>Harvard Business Review: \u201cA Better Way to Think About Risk\u201d<\/strong> \u2013 Applying Bayes to corporate strategy.<\/li>\n<\/ol>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h3 class=\"wp-block-heading\">Closing Thought<\/h3>\n\n\n\n<p>Bayesian Updating isn\u2019t about perfect predictions\u2014it\u2019s about becoming <em>less wrong<\/em> faster than the competition. In an era where agility trumps certainty, the executive who updates early and often turns uncertainty into strategic edge.<\/p>\n\n\n\n<p><\/p>\n\n\n\n<p><\/p>\n\n\n\n<p>Missed out on the <a href=\"https:\/\/murrayslatter.me\/?p=5292\">over all series<\/a>?<\/p>\n\n\n\n<p><strong>Murray Slatter<\/strong><\/p>\n\n\n\n<p>Strategy, Growth, and Transformation Consultant: <a href=\"https:\/\/outlook.office.com\/bookwithme\/user\/ffef0aaaf9ce4fa9bc29e062d1cb0d0f@qfactor.com.au?anonymous&amp;ep=bwmEmailSignature\">Book time to meet with me here!<\/a><\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Or Signup for the Newsletter<\/h2>\n\n\n\n<div class=\"wp-block-leadin-hubspot-form-block\">\n\t\t\t\t\t\t<script>\n\t\t\t\t\t\t\twindow.hsFormsOnReady = window.hsFormsOnReady || [];\n\t\t\t\t\t\t\twindow.hsFormsOnReady.push(()=>{\n\t\t\t\t\t\t\t\thbspt.forms.create({\n\t\t\t\t\t\t\t\t\tportalId: 24391455,\n\t\t\t\t\t\t\t\t\tformId: \"03fd50b1-a049-4bdb-b064-cff39a5f75dd\",\n\t\t\t\t\t\t\t\t\ttarget: \"#hbspt-form-1779090334000-1386303570\",\n\t\t\t\t\t\t\t\t\tregion: \"na1\",\n\t\t\t\t\t\t\t\t\t\n\t\t\t\t\t\t\t})});\n\t\t\t\t\t\t<\/script>\n\t\t\t\t\t\t<div class=\"hbspt-form\" id=\"hbspt-form-1779090334000-1386303570\"><\/div><\/div>\n\n\n\n<p><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Turning New Information into Better Decisions Bayesian Updating \u201cWhen the facts change, I change my mind. What do you do, sir?\u201d\u2014 (often attributed to) John Maynard Keynes Bayesian Updating is a disciplined way to revise what you believe in light [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":5367,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"content-type":"","_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[1],"tags":[],"class_list":["post-5328","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uncategorized","clearfix"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.3 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Foundational Thinking Models: Bayesian Updating - Murray Slatter<\/title>\n<meta name=\"description\" content=\"Bayesian Updating \u201cWhen the facts change, I change my mind. What do you do, sir?\u201d\u2014 (often attributed to) John Maynard Keynes\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/murrayslatter.me\/?p=5328\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Foundational Thinking Models: Bayesian Updating - Murray Slatter\" \/>\n<meta property=\"og:description\" content=\"Bayesian Updating \u201cWhen the facts change, I change my mind. What do you do, sir?\u201d\u2014 (often attributed to) John Maynard Keynes\" \/>\n<meta property=\"og:url\" content=\"https:\/\/murrayslatter.me\/?p=5328\" \/>\n<meta property=\"og:site_name\" content=\"Murray Slatter\" \/>\n<meta property=\"article:published_time\" content=\"2025-06-08T23:58:54+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2025-06-08T23:58:57+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/murrayslatter.me\/wp-content\/uploads\/2025\/06\/20250605-Bayesian-Analysis.png\" \/>\n\t<meta property=\"og:image:width\" content=\"1454\" \/>\n\t<meta property=\"og:image:height\" content=\"826\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/png\" \/>\n<meta name=\"author\" content=\"Murray Slatter\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Murray Slatter\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"4 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\\\/\\\/murrayslatter.me\\\/?p=5328#article\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/murrayslatter.me\\\/?p=5328\"},\"author\":{\"name\":\"Murray Slatter\",\"@id\":\"https:\\\/\\\/murrayslatter.me\\\/#\\\/schema\\\/person\\\/9774d7f727e6b917f43267614574f6d5\"},\"headline\":\"Foundational Thinking Models: Bayesian Updating\",\"datePublished\":\"2025-06-08T23:58:54+00:00\",\"dateModified\":\"2025-06-08T23:58:57+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\\\/\\\/murrayslatter.me\\\/?p=5328\"},\"wordCount\":793,\"commentCount\":0,\"image\":{\"@id\":\"https:\\\/\\\/murrayslatter.me\\\/?p=5328#primaryimage\"},\"thumbnailUrl\":\"https:\\\/\\\/i0.wp.com\\\/murrayslatter.me\\\/wp-content\\\/uploads\\\/2025\\\/06\\\/20250605-Bayesian-Analysis.png?fit=1454%2C826&ssl=1\",\"inLanguage\":\"en\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\\\/\\\/murrayslatter.me\\\/?p=5328#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\\\/\\\/murrayslatter.me\\\/?p=5328\",\"url\":\"https:\\\/\\\/murrayslatter.me\\\/?p=5328\",\"name\":\"Foundational Thinking Models: Bayesian Updating - Murray Slatter\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/murrayslatter.me\\\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\\\/\\\/murrayslatter.me\\\/?p=5328#primaryimage\"},\"image\":{\"@id\":\"https:\\\/\\\/murrayslatter.me\\\/?p=5328#primaryimage\"},\"thumbnailUrl\":\"https:\\\/\\\/i0.wp.com\\\/murrayslatter.me\\\/wp-content\\\/uploads\\\/2025\\\/06\\\/20250605-Bayesian-Analysis.png?fit=1454%2C826&ssl=1\",\"datePublished\":\"2025-06-08T23:58:54+00:00\",\"dateModified\":\"2025-06-08T23:58:57+00:00\",\"author\":{\"@id\":\"https:\\\/\\\/murrayslatter.me\\\/#\\\/schema\\\/person\\\/9774d7f727e6b917f43267614574f6d5\"},\"description\":\"Bayesian Updating \u201cWhen the facts change, I change my mind. What do you do, sir?\u201d\u2014 (often attributed to) John Maynard Keynes\",\"breadcrumb\":{\"@id\":\"https:\\\/\\\/murrayslatter.me\\\/?p=5328#breadcrumb\"},\"inLanguage\":\"en\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\\\/\\\/murrayslatter.me\\\/?p=5328\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en\",\"@id\":\"https:\\\/\\\/murrayslatter.me\\\/?p=5328#primaryimage\",\"url\":\"https:\\\/\\\/i0.wp.com\\\/murrayslatter.me\\\/wp-content\\\/uploads\\\/2025\\\/06\\\/20250605-Bayesian-Analysis.png?fit=1454%2C826&ssl=1\",\"contentUrl\":\"https:\\\/\\\/i0.wp.com\\\/murrayslatter.me\\\/wp-content\\\/uploads\\\/2025\\\/06\\\/20250605-Bayesian-Analysis.png?fit=1454%2C826&ssl=1\",\"width\":1454,\"height\":826},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\\\/\\\/murrayslatter.me\\\/?p=5328#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\\\/\\\/murrayslatter.me\\\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"Foundational Thinking Models: Bayesian Updating\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\\\/\\\/murrayslatter.me\\\/#website\",\"url\":\"https:\\\/\\\/murrayslatter.me\\\/\",\"name\":\"Murray Slatter\",\"description\":\"Empowering Good teams to be Great!\",\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\\\/\\\/murrayslatter.me\\\/?s={search_term_string}\"},\"query-input\":{\"@type\":\"PropertyValueSpecification\",\"valueRequired\":true,\"valueName\":\"search_term_string\"}}],\"inLanguage\":\"en\"},{\"@type\":\"Person\",\"@id\":\"https:\\\/\\\/murrayslatter.me\\\/#\\\/schema\\\/person\\\/9774d7f727e6b917f43267614574f6d5\",\"name\":\"Murray Slatter\",\"image\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en\",\"@id\":\"https:\\\/\\\/secure.gravatar.com\\\/avatar\\\/8aa0f1751d211918ccc2037a8b3ce22431cec7bef7edf9c993cee70e20717c88?s=96&d=mm&r=g\",\"url\":\"https:\\\/\\\/secure.gravatar.com\\\/avatar\\\/8aa0f1751d211918ccc2037a8b3ce22431cec7bef7edf9c993cee70e20717c88?s=96&d=mm&r=g\",\"contentUrl\":\"https:\\\/\\\/secure.gravatar.com\\\/avatar\\\/8aa0f1751d211918ccc2037a8b3ce22431cec7bef7edf9c993cee70e20717c88?s=96&d=mm&r=g\",\"caption\":\"Murray Slatter\"},\"url\":\"https:\\\/\\\/murrayslatter.me\\\/?author=2\"}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"Foundational Thinking Models: Bayesian Updating - Murray Slatter","description":"Bayesian Updating \u201cWhen the facts change, I change my mind. What do you do, sir?\u201d\u2014 (often attributed to) John Maynard Keynes","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/murrayslatter.me\/?p=5328","og_locale":"en_US","og_type":"article","og_title":"Foundational Thinking Models: Bayesian Updating - Murray Slatter","og_description":"Bayesian Updating \u201cWhen the facts change, I change my mind. What do you do, sir?\u201d\u2014 (often attributed to) John Maynard Keynes","og_url":"https:\/\/murrayslatter.me\/?p=5328","og_site_name":"Murray Slatter","article_published_time":"2025-06-08T23:58:54+00:00","article_modified_time":"2025-06-08T23:58:57+00:00","og_image":[{"width":1454,"height":826,"url":"https:\/\/murrayslatter.me\/wp-content\/uploads\/2025\/06\/20250605-Bayesian-Analysis.png","type":"image\/png"}],"author":"Murray Slatter","twitter_card":"summary_large_image","twitter_misc":{"Written by":"Murray Slatter","Est. reading time":"4 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"Article","@id":"https:\/\/murrayslatter.me\/?p=5328#article","isPartOf":{"@id":"https:\/\/murrayslatter.me\/?p=5328"},"author":{"name":"Murray Slatter","@id":"https:\/\/murrayslatter.me\/#\/schema\/person\/9774d7f727e6b917f43267614574f6d5"},"headline":"Foundational Thinking Models: Bayesian Updating","datePublished":"2025-06-08T23:58:54+00:00","dateModified":"2025-06-08T23:58:57+00:00","mainEntityOfPage":{"@id":"https:\/\/murrayslatter.me\/?p=5328"},"wordCount":793,"commentCount":0,"image":{"@id":"https:\/\/murrayslatter.me\/?p=5328#primaryimage"},"thumbnailUrl":"https:\/\/i0.wp.com\/murrayslatter.me\/wp-content\/uploads\/2025\/06\/20250605-Bayesian-Analysis.png?fit=1454%2C826&ssl=1","inLanguage":"en","potentialAction":[{"@type":"CommentAction","name":"Comment","target":["https:\/\/murrayslatter.me\/?p=5328#respond"]}]},{"@type":"WebPage","@id":"https:\/\/murrayslatter.me\/?p=5328","url":"https:\/\/murrayslatter.me\/?p=5328","name":"Foundational Thinking Models: Bayesian Updating - Murray Slatter","isPartOf":{"@id":"https:\/\/murrayslatter.me\/#website"},"primaryImageOfPage":{"@id":"https:\/\/murrayslatter.me\/?p=5328#primaryimage"},"image":{"@id":"https:\/\/murrayslatter.me\/?p=5328#primaryimage"},"thumbnailUrl":"https:\/\/i0.wp.com\/murrayslatter.me\/wp-content\/uploads\/2025\/06\/20250605-Bayesian-Analysis.png?fit=1454%2C826&ssl=1","datePublished":"2025-06-08T23:58:54+00:00","dateModified":"2025-06-08T23:58:57+00:00","author":{"@id":"https:\/\/murrayslatter.me\/#\/schema\/person\/9774d7f727e6b917f43267614574f6d5"},"description":"Bayesian Updating \u201cWhen the facts change, I change my mind. What do you do, sir?\u201d\u2014 (often attributed to) John Maynard Keynes","breadcrumb":{"@id":"https:\/\/murrayslatter.me\/?p=5328#breadcrumb"},"inLanguage":"en","potentialAction":[{"@type":"ReadAction","target":["https:\/\/murrayslatter.me\/?p=5328"]}]},{"@type":"ImageObject","inLanguage":"en","@id":"https:\/\/murrayslatter.me\/?p=5328#primaryimage","url":"https:\/\/i0.wp.com\/murrayslatter.me\/wp-content\/uploads\/2025\/06\/20250605-Bayesian-Analysis.png?fit=1454%2C826&ssl=1","contentUrl":"https:\/\/i0.wp.com\/murrayslatter.me\/wp-content\/uploads\/2025\/06\/20250605-Bayesian-Analysis.png?fit=1454%2C826&ssl=1","width":1454,"height":826},{"@type":"BreadcrumbList","@id":"https:\/\/murrayslatter.me\/?p=5328#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/murrayslatter.me\/"},{"@type":"ListItem","position":2,"name":"Foundational Thinking Models: Bayesian Updating"}]},{"@type":"WebSite","@id":"https:\/\/murrayslatter.me\/#website","url":"https:\/\/murrayslatter.me\/","name":"Murray Slatter","description":"Empowering Good teams to be Great!","potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/murrayslatter.me\/?s={search_term_string}"},"query-input":{"@type":"PropertyValueSpecification","valueRequired":true,"valueName":"search_term_string"}}],"inLanguage":"en"},{"@type":"Person","@id":"https:\/\/murrayslatter.me\/#\/schema\/person\/9774d7f727e6b917f43267614574f6d5","name":"Murray Slatter","image":{"@type":"ImageObject","inLanguage":"en","@id":"https:\/\/secure.gravatar.com\/avatar\/8aa0f1751d211918ccc2037a8b3ce22431cec7bef7edf9c993cee70e20717c88?s=96&d=mm&r=g","url":"https:\/\/secure.gravatar.com\/avatar\/8aa0f1751d211918ccc2037a8b3ce22431cec7bef7edf9c993cee70e20717c88?s=96&d=mm&r=g","contentUrl":"https:\/\/secure.gravatar.com\/avatar\/8aa0f1751d211918ccc2037a8b3ce22431cec7bef7edf9c993cee70e20717c88?s=96&d=mm&r=g","caption":"Murray Slatter"},"url":"https:\/\/murrayslatter.me\/?author=2"}]}},"jetpack_featured_media_url":"https:\/\/i0.wp.com\/murrayslatter.me\/wp-content\/uploads\/2025\/06\/20250605-Bayesian-Analysis.png?fit=1454%2C826&ssl=1","jetpack-related-posts":[{"id":5292,"url":"https:\/\/murrayslatter.me\/?p=5292","url_meta":{"origin":5328,"position":0},"title":"Mental Models for Executives : Series &amp; Coaching","author":"Murray Slatter","date":"May 31, 2025","format":false,"excerpt":"A Playbook for Thinking Clearly at C-Level \u201cWhen the stakes are high and the variables messy, strategy is less about having the right answers than using the right lenses.\u201d Welcome to The Executive Mental Models Series\u2014a blog-cum-training journey designed to weaponise clear thinking for CEOs, founders, and rising C-suite leaders.\u2026","rel":"","context":"Similar post","block_context":{"text":"Similar post","link":""},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/murrayslatter.me\/wp-content\/uploads\/2025\/05\/Mental-Models.png?fit=1200%2C849&ssl=1&resize=350%2C200","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/murrayslatter.me\/wp-content\/uploads\/2025\/05\/Mental-Models.png?fit=1200%2C849&ssl=1&resize=350%2C200 1x, https:\/\/i0.wp.com\/murrayslatter.me\/wp-content\/uploads\/2025\/05\/Mental-Models.png?fit=1200%2C849&ssl=1&resize=525%2C300 1.5x, https:\/\/i0.wp.com\/murrayslatter.me\/wp-content\/uploads\/2025\/05\/Mental-Models.png?fit=1200%2C849&ssl=1&resize=700%2C400 2x, https:\/\/i0.wp.com\/murrayslatter.me\/wp-content\/uploads\/2025\/05\/Mental-Models.png?fit=1200%2C849&ssl=1&resize=1050%2C600 3x"},"classes":[]},{"id":5380,"url":"https:\/\/murrayslatter.me\/?p=5380","url_meta":{"origin":5328,"position":1},"title":"Margin of Safety","author":"Murray Slatter","date":"June 10, 2025","format":false,"excerpt":"Building Strategic Buffers for Better Decisions Why Margin of Safety Matters Beyond Investing Benjamin Graham coined margin of safety to shield investors from analytical error and market volatility. Executives face the same twin threats\u2014imperfect information and unpredictable environments\u2014but the stakes span capital, reputation, and people. Embedding deliberate buffers into plans:\u2026","rel":"","context":"Similar post","block_context":{"text":"Similar post","link":""},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/murrayslatter.me\/wp-content\/uploads\/2025\/06\/Margin-of-Safety.png?fit=1200%2C548&ssl=1&resize=350%2C200","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/murrayslatter.me\/wp-content\/uploads\/2025\/06\/Margin-of-Safety.png?fit=1200%2C548&ssl=1&resize=350%2C200 1x, https:\/\/i0.wp.com\/murrayslatter.me\/wp-content\/uploads\/2025\/06\/Margin-of-Safety.png?fit=1200%2C548&ssl=1&resize=525%2C300 1.5x, https:\/\/i0.wp.com\/murrayslatter.me\/wp-content\/uploads\/2025\/06\/Margin-of-Safety.png?fit=1200%2C548&ssl=1&resize=700%2C400 2x, https:\/\/i0.wp.com\/murrayslatter.me\/wp-content\/uploads\/2025\/06\/Margin-of-Safety.png?fit=1200%2C548&ssl=1&resize=1050%2C600 3x"},"classes":[]},{"id":3140,"url":"https:\/\/murrayslatter.me\/?p=3140","url_meta":{"origin":5328,"position":2},"title":"Schedule Management: The Critical Role of Contract Administrators in Ensuring Timely Project Completion","author":"Murray Slatter","date":"July 25, 2024","format":false,"excerpt":"In the dynamic environment of construction projects, effective schedule management is pivotal to ensuring timely project completion. It's a complex balancing act that requires careful planning, continuous monitoring, and the flexibility to adapt as the project evolves. Contract Administrators play a crucial role in this process, acting as the linchpin\u2026","rel":"","context":"In &quot;Contract Administrator&quot;","block_context":{"text":"Contract Administrator","link":"https:\/\/murrayslatter.me\/?cat=67"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/murrayslatter.me\/wp-content\/uploads\/2024\/07\/contracts-administrator-module.png?fit=461%2C260&ssl=1&resize=350%2C200","width":350,"height":200},"classes":[]},{"id":4318,"url":"https:\/\/murrayslatter.me\/?p=4318","url_meta":{"origin":5328,"position":3},"title":"Stephen Brown","author":"Murray Slatter","date":"December 6, 2024","format":false,"excerpt":"Integrating Facilities Management with Organizational Strategies Stephen Brown is an influential figure in the field of facilities management (FM), particularly known for his work on integrating FM with broader organizational strategies. His research has been pivotal in demonstrating how FM can go beyond operational tasks to play a strategic role\u2026","rel":"","context":"In &quot;Facilities Management and Asset Management&quot;","block_context":{"text":"Facilities Management and Asset Management","link":"https:\/\/murrayslatter.me\/?cat=103"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/murrayslatter.me\/wp-content\/uploads\/2024\/12\/services-facilities-asset-mgmt.jpg?fit=1024%2C541&ssl=1&resize=350%2C200","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/murrayslatter.me\/wp-content\/uploads\/2024\/12\/services-facilities-asset-mgmt.jpg?fit=1024%2C541&ssl=1&resize=350%2C200 1x, https:\/\/i0.wp.com\/murrayslatter.me\/wp-content\/uploads\/2024\/12\/services-facilities-asset-mgmt.jpg?fit=1024%2C541&ssl=1&resize=525%2C300 1.5x, https:\/\/i0.wp.com\/murrayslatter.me\/wp-content\/uploads\/2024\/12\/services-facilities-asset-mgmt.jpg?fit=1024%2C541&ssl=1&resize=700%2C400 2x"},"classes":[]},{"id":2665,"url":"https:\/\/murrayslatter.me\/?p=2665","url_meta":{"origin":5328,"position":4},"title":"#7 of 12: So you want to be a Project Manager","author":"Murray Slatter","date":"January 27, 2024","format":false,"excerpt":"Managing Project Risks Identifying, analyzing, and mitigating potential risks that could impact project outcomes. As a project manager, one of your primary responsibilities is to ensure that the project you are managing is completed on time, within budget, and meets the desired quality standards. However, achieving these objectives is not\u2026","rel":"","context":"In &quot;Project management&quot;","block_context":{"text":"Project management","link":"https:\/\/murrayslatter.me\/?cat=18"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/murrayslatter.me\/wp-content\/uploads\/2024\/01\/Slide7.jpg?fit=1200%2C675&ssl=1&resize=350%2C200","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/murrayslatter.me\/wp-content\/uploads\/2024\/01\/Slide7.jpg?fit=1200%2C675&ssl=1&resize=350%2C200 1x, https:\/\/i0.wp.com\/murrayslatter.me\/wp-content\/uploads\/2024\/01\/Slide7.jpg?fit=1200%2C675&ssl=1&resize=525%2C300 1.5x, https:\/\/i0.wp.com\/murrayslatter.me\/wp-content\/uploads\/2024\/01\/Slide7.jpg?fit=1200%2C675&ssl=1&resize=700%2C400 2x, https:\/\/i0.wp.com\/murrayslatter.me\/wp-content\/uploads\/2024\/01\/Slide7.jpg?fit=1200%2C675&ssl=1&resize=1050%2C600 3x"},"classes":[]},{"id":2183,"url":"https:\/\/murrayslatter.me\/?p=2183","url_meta":{"origin":5328,"position":5},"title":"CoE Risk #1: Fundamentals of Risk Management","author":"Murray Slatter","date":"January 14, 2024","format":false,"excerpt":"What Great Looks Like: A Guide for Project and Program Managers Risk management is a crucial function of any successful project or program. Effective risk management enables project and program managers to identify potential risks, assess their likelihood and impact, develop strategies to mitigate or respond to those risks, and\u2026","rel":"","context":"In &quot;CoE - Risk Management&quot;","block_context":{"text":"CoE - Risk Management","link":"https:\/\/murrayslatter.me\/?cat=33"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/murrayslatter.me\/wp-content\/uploads\/2023\/12\/Risk-CoE-Slide1.jpg?fit=1200%2C675&ssl=1&resize=350%2C200","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/murrayslatter.me\/wp-content\/uploads\/2023\/12\/Risk-CoE-Slide1.jpg?fit=1200%2C675&ssl=1&resize=350%2C200 1x, https:\/\/i0.wp.com\/murrayslatter.me\/wp-content\/uploads\/2023\/12\/Risk-CoE-Slide1.jpg?fit=1200%2C675&ssl=1&resize=525%2C300 1.5x, https:\/\/i0.wp.com\/murrayslatter.me\/wp-content\/uploads\/2023\/12\/Risk-CoE-Slide1.jpg?fit=1200%2C675&ssl=1&resize=700%2C400 2x, https:\/\/i0.wp.com\/murrayslatter.me\/wp-content\/uploads\/2023\/12\/Risk-CoE-Slide1.jpg?fit=1200%2C675&ssl=1&resize=1050%2C600 3x"},"classes":[]}],"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/murrayslatter.me\/index.php?rest_route=\/wp\/v2\/posts\/5328","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/murrayslatter.me\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/murrayslatter.me\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/murrayslatter.me\/index.php?rest_route=\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/murrayslatter.me\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=5328"}],"version-history":[{"count":2,"href":"https:\/\/murrayslatter.me\/index.php?rest_route=\/wp\/v2\/posts\/5328\/revisions"}],"predecessor-version":[{"id":5368,"href":"https:\/\/murrayslatter.me\/index.php?rest_route=\/wp\/v2\/posts\/5328\/revisions\/5368"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/murrayslatter.me\/index.php?rest_route=\/wp\/v2\/media\/5367"}],"wp:attachment":[{"href":"https:\/\/murrayslatter.me\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=5328"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/murrayslatter.me\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=5328"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/murrayslatter.me\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=5328"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}