Probability Management

A question... What are the possible applications of aggregating uncertainty or risk in our asset intensive businesses?

Here's why I ask... I attended a very interesting webinar last week called "Probability Management Revolution" by Sam Sage (author of The Flaw of Averages: Why We Underestimate Risk in the Face of Uncertainty) with PROBABILITY MANAGEMENT INC. I was introduced to this non-profit organization by Doug Hubbard (author of How to Measure Anything).

Their organization is getting others to rethink how they understand and use uncertainty through communication, calculation, Probability Management promotes a fully quantitative approach to probability challenges. The organization offers some interesting resources including video tutorials and access to some tools.

In this webinar Sam showed us how to make better decisions by aggregating risk across the enterprise. It is easy to see, once you know how to properly aggregate, how errors can be made in the perception of summed probabilities. Probability Management promotes simple, open source tools anyone can use. It was fascinating, but if I'm honest I'm still trying to wrap my head around the possible use cases in our business.