The Impact/Probability Paradox -- Driven by Tolerance

by Carl Pritchard

A rookie baseball player on a single-A farm team bobbles the ball and allows two runners to score. "He's learning the true finesse of the game," we contend, willing to forgive and forget. After all, it's not the major leagues. But management fires him. A multimillion-dollar star for the Washington Nationals bobbles the ball and allows two runners to score. We shout, "Fire the bum! I can't believe he's even getting paid for this!" It's just a game, and yet our reactions and behaviors are radically different. Does management "fire the bum?" No. Even though he has made significant mistakes, there is a tolerance for the failed performance, and it ties directly to risk management.