13.1 Historic Tolerance Thresholds
191
Fig. 13.3 Empirically (facilitated workshops) developed risk-tolerance thresholds for a set of
medium to large corporations. The envelope is displayed in blue shade
is ready to make to save a life or its “willingness to pay” (WTP) attitude (Marin
1992; Mooney 1977; Jones-Lee 1989; Lee and Jones 2004; Pearce et al. 1996).
13.1.3 Examples of Monetary Acceptable and/or Tolerance
Thresholds Curves
For a monetary-only tolerance threshold the curves have a totally different appearance. The reason is that in the event of a certain consequence being realized, the
company will fail, or lose its freedom, no matter what. It is therefore modelled as an
activation function. For a set of clients we developed the set of tolerance thresholds
shown in Fig. 13.3. The curves are bundled to preserve confidentiality.
13.2 Modern Risk Tolerance
Risks can be sorted by decreasing value and a prioritized list can be delivered.
However that prioritization is far from “best practices” as it lacks a vital piece of
information: what risks actually do have the potential to “hurt”? It is also vital for
the client to distinguish between high-probability low-consequence events and their
opposite, i.e., low-probability, high-consequence events, something that common
PIGs do not allow, simply because their colouring schemes have been arbitrarily
defined, without proper understanding of their meanings. Indeed, in many common
practice approaches (FMEA, risk matrices) one can see that a Fukushima-type of
event receives the same colour as, say, the next migraine of the plant director, which
191
Fig. 13.3 Empirically (facilitated workshops) developed risk-tolerance thresholds for a set of
medium to large corporations. The envelope is displayed in blue shade
is ready to make to save a life or its “willingness to pay” (WTP) attitude (Marin
1992; Mooney 1977; Jones-Lee 1989; Lee and Jones 2004; Pearce et al. 1996).
13.1.3 Examples of Monetary Acceptable and/or Tolerance
Thresholds Curves
For a monetary-only tolerance threshold the curves have a totally different appearance. The reason is that in the event of a certain consequence being realized, the
company will fail, or lose its freedom, no matter what. It is therefore modelled as an
activation function. For a set of clients we developed the set of tolerance thresholds
shown in Fig. 13.3. The curves are bundled to preserve confidentiality.
13.2 Modern Risk Tolerance
Risks can be sorted by decreasing value and a prioritized list can be delivered.
However that prioritization is far from “best practices” as it lacks a vital piece of
information: what risks actually do have the potential to “hurt”? It is also vital for
the client to distinguish between high-probability low-consequence events and their
opposite, i.e., low-probability, high-consequence events, something that common
PIGs do not allow, simply because their colouring schemes have been arbitrarily
defined, without proper understanding of their meanings. Indeed, in many common
practice approaches (FMEA, risk matrices) one can see that a Fukushima-type of
event receives the same colour as, say, the next migraine of the plant director, which