|Probability Management - A Cure for
the Flaw of Averages
|March 31st 2015
|12:30 PM EDT, 10:30 AM MST and 9:30 AM PST
|One hour (a 45 to 50 minute presentation
followed by 10-15 minutes Q&A)
|One. Certificate upon successful completion
of quiz at the end of the session
The Flaw of Averages states that
plans based “average” assumptions are wrong
on average. It explains why most projects are behind
schedule, beyond budget and below projection.
The discipline of Probability Management addresses this
problem from three perspectives.
1) Technological: Interactive Simulation creates a more
intuitive understanding of uncertainty and risk.
2) Informational: Databases of Monte Carlo trials may
be used to transparently communicate and aggregate uncertainties.
3) Managerial: Responsibility must be assigned for determining
and maintaining probabilistic assumptions. A competent
Chief Probability Officer (CPO) can give your organization
the permission to be uncertain.
Examples will be drawn from scheduling, purchasing,
managing R&D portfolios, and finance.
No prior understating of statistics is assumed, but
for those with extensive training in the subject, this
presentation will attempt to repair the damage.
Part two of the presentation will be on: Probability
Management comes to City Hall: "Early movers"
in the discipline of probability management within local
government and models to help public managers learn
|Dr. Sam L. Savage
Shayne Kavanagh is
the Senior Manager of Research for Government
Finance Officers Association. Shayne has been
developing the practice and technique of long-term
financial planning for local government 2002.
In addition to working with local governments
in a consulting capacity on financial planning
and risk analysis, he is the author of a number
of publications on financial planning and budgeting,
• The leading book about long-term financial
planning in local government, Financing the Future:
Long-Term Financial Planning for Local Governments.
• The leading book on policies for establishing
financial governance, Financial Policies
• He has written about probability management
for local government in Government Finance Review
and Analytics Magazine
|Email CPD committee at email@example.com