30-year historical averages for weather planning are not just usually wrong, but consistently wrong.
In the “The Flaw of Averages: Why We Understand Risk in The Face of Uncertainty,” author Sam L. Savage shows how “…when we use single numbers to estimate uncertain future outcomes…” such as 30-year historical averages for weather planning in the construction industry and built environment “…we are not just usually wrong, but we are consistently wrong.” The key point of The Flaw of Averages: plans based on average assumptions are wrong on average. Savage summarizes The Flaw of Averages in the “Seven Deadly Sins of Averaging” — underscoring how commonplace the problem of average assumptions is across our everyday construction operations.
Plans based on average assumptions are wrong on average.
Across the construction industry and built environment, the poor practice of relying upon 30-year historical averages for estimating, planning and scheduling for weather events and weather delays is wrong on average. Again, plans based on average assumptions are wrong on average — “using single numbers to estimate future outcomes are consistently wrong.” Further, in the “The Flaw of Averages: Why We Understand Risk in The Face of Uncertainty,” Savage highlights numerous problems including climate change and supply chains, both mission-critical to successful project and program delivery for new construction and ongoing operations and maintenance (O&M).
Solutions to the systemic problem of plans based on average assumptions
In the final section “The Flaw of Averages: Why We Understand Risk in The Face of Uncertainty,” Savage proposes a series of potential solutions to the systemic problem of plans based on average assumptions. Savage recommends predictive analytics with simulations, enabling managers and executives to interact with variables to make better-informed decisions. Further, Savage showcases a new data type, the distribution string, touted as a major breakthrough in the communication of risk and uncertainty, with practical applicability to weather risk management in the construction industry and built environment.
(Source: Savage, Sam L. The flaw of averages: why we underestimate risk in the face of uncertainty. John Wiley & Sons, Inc., 2012.)
More in the next blog series about weather planning, Weather Controls® and weather risk management for the construction industry and built environment…
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