Understanding Risk

Summary

Objectives

By the end of this session you should be able to:

• Identify and manage risk.

Key Points

• Risk is the probability of an outcome which is not desired.
• Risk is an inherent part of almost every activity.
• By quantifying risk, you can make good choices about how and when to mitigate risk.
• Humans tend to be bad at assessing risk.

Breakdown

Quantifying Risk

Humans tend to be bad at accurately assessing risk - scary, highly emotional risks tend to be overestimated while normalised, subtle risks tend to be underestimated. As an example, sky-diving is generally considered to be a riskier activity than driving when in fact it is over 15 times safer! For this reason, risks need to be assessed dispassionately - and are best quantified with data.