Odds, upside and downside
Probability and the risk-opportunity matrix.
- Level
- Bitesize
- Learning time
- 1 hour 15 minutes
- Where
- Strategic Risk
- Price
- £39
When you step up to a higher level, what you paid in the last 12 months for lower-level courses inside the bigger course comes off its price, in proportion to how much of each is inside it, whichever topic it's from. Courses at the same or a lower level don't give credit against each other. A Focus course or above always costs at least £15. Read the full terms
Certificate of Completion
Overview and Outcomes.
Overview
Most risk failures are not failures of process but of the probability judgement feeding into it. Drawing on Kahneman and Tversky, this module names three biases, availability, the law of small numbers and authority anchoring, and uses Feynman's analysis of the Challenger disaster to show a thousandfold gap in estimates. It sets out four debiasing tools, their pitfalls, and why fat tails, correlation and black swans mean the model is not the world. ISO 31000 defines risk as the effect of uncertainty on objectives, positive effects included, yet most registers only manage the downside. This module extends the probability and impact matrix to capture opportunity, sets out three disciplines for a two sided matrix, and reads Pfizer and BioNTech's decision to manufacture a vaccine at risk. It explores survivorship bias, the conditions that justify a deliberate bet, and why inaction is also a bet.
What you'll develop
In this Bitesize, you will develop the ability to:
- Identify the availability heuristic, the law of small numbers and authority anchoring in live risk discussions.
- Apply reference class forecasting, the pre-mortem, structured dissent and written ranges, and recognise when each has been introduced in a hollow way.
- Explain how fat tails, breaking correlations and black swans cause models to understate extreme risk.
- Apply a two sided risk matrix that assesses opportunity with the same rigour as threat.
- Explain why inaction is also a bet and why a good result is not proof of a good decision.
The Modules.
1 hour 15 minutes of learning.
- 12Risk and Statistics: Thinking in ProbabilitiesMost risk failures are not failures of process but of the probability judgement feeding into it. Drawing on Kahneman and Tversky, this module names three biases, availability, the law of small numbers and authority anchoring, and uses Feynman's analysis of the Challenger disaster to show a thousandfold gap in estimates. It sets out four debiasing tools, their pitfalls, and why fat tails, correlation and black swans mean the model is not the world.38 min
- 13The Risk-Opportunity Matrix: The Upside of UncertaintyISO 31000 defines risk as the effect of uncertainty on objectives, positive effects included, yet most registers only manage the downside. This module extends the probability and impact matrix to capture opportunity, sets out three disciplines for a two sided matrix, and reads Pfizer and BioNTech's decision to manufacture a vaccine at risk. It explores survivorship bias, the conditions that justify a deliberate bet, and why inaction is also a bet.36 min
Go deeper, and pay only the difference
- You are hereBitesize, 1 hour 15 minutes, £39
- Next stepFocus, Weighing the odds, 2 hours 30 minutes, £69. Already own the Bitesize? You pay £30.
- Explore, Owning the risk, 5 hours, £129. Already own the Bitesize? You pay £90.
- The whole topicImmerse, Risk worth taking, 9 hours 30 minutes, £249. Already own the Bitesize? You pay £210.
When you step up to a higher level, what you paid in the last 12 months for lower-level courses inside the bigger course comes off its price, in proportion to how much of each is inside it, whichever topic it's from. Courses at the same or a lower level don't give credit against each other. A Focus course or above always costs at least £15. Prices per person. Read the full terms
Also part of: From data to decisions
Other Bitesize in the Strategic Risk topic
- Why risk belongs to leadersRisk management basics for leaders45 minutes£39
- Risk as part of the planRisk culture and risk in strategy1 hour 30 minutes£39
- Joining up the risk pictureEnterprise risk management and COSO1 hour 15 minutes£39
- How much risk is enough?Risk assessment and board risk appetite1 hour 15 minutes£39
- When reputations are on the linePublic sector risk and reputational risk1 hour 15 minutes£39
- What lies over the horizonGlobal and emerging risk case studies1 hour 15 minutes£39