How to Explain Probablity and Risk
For some time now I’ve been looking for good ways of explaining probability and risk. What I’m looking for are the simple comparisons that we understand intuitively. Let me explain what I mean.
Nanometers (nm) are the unit of size for integrated circuits. Intel are currently producing chips with 32nm features. But how big is a nanometer? No doubt you’ve heard comparisons to the thickness of a human hair. A nanometer is about 1/20,000 of the diameter of a human hair. (The thickness actually varies a lot, but that’s the order of magnitude). But that comparison doesn’t mean much to me and I doubt it means much to you.
I was impressed therefore when a speaker on the BBC Radio science podcast Material World came up with a far more meaningful comparison:
A nanometer is the amount your fingernails grow in a second.
Easy to remember, and (for me) intuitively appealing.
Is there some similar comparison we can make for a business risk?