Imagine setting your own line when you bet $100 that the Packers will beat the Saints on opening day. Imagine if you were in possession of a mathematical formula that handicaps risk more accurately than the Las Vegas odds makers. Imagine a formula that takes all the pertinent game day variables and statistically weights their impact on the potential outcome of the game. Finally, for the first time in your sports betting life, you have the edge, not the bookie. Imagine the money you could make. What would you pay for such a magical handicapping tool?
Back at the Office
Such a magical handicapping tool is not imaginary but is available for you to use right here on this website – Free. The Project Selection Tool is a revolutionary handicapping method that reduces the risk of project failure by risk-scoring potential construction projects and guiding contractors away from projects too risky for their company to complete on time and on budget. That’s right. You can manage your company just like a Vegas sports book and Vegas sports books always win.
How Do the Odds Makers Do It?
Las Vegas sports books collect millions of dollars weekly from sports bettors who can’t beat the odds. Ask yourself this question: Do I win most of the bets I place on sporting events? The answer will, of course, be no because you are betting against an odds maker who has scientifically weighted the risk variables and set the odds so that your chances of success are never greater than 50/50. You, then, bet with your gut feel or emotional bias (your college alma-mater or local team or favorite team since childhood) thereby randomly altering the odds either against yourself or in your favor. Chances of consistent success are greatly reduced.
When Betting Sports
When pondering your next NFL wager, do what the odds makers do and consider all the factors, both positive and negative, that could cause your team to either win or lose.
- Consider your quarterback’s recent performance. What are his stats compared to the opposing quarterback’s?
- What key players on your team have been injured?
- How does your offense match up against the opposition’s defense?
- How does this next competitor’s performance rank against teams you have played in the recent past?
- Etc. etc. etc.
In other words, do what the bookies do. Isolate the variables that could have an impact on the outcome and estimate the impact each variable might have when weighed against all the other variables.
When Picking Projects
When pondering your next construction project, do the same thing. Use the Project Selection Tool here on the site to consider all the risk factors, weight them appropriately, and make a statistically accurate go/no-go decision.
- Risk Factors:
The Project Selection Tool identifies the risk factors that impact the outcome of construction projects in four broad categories:
- Experience with similar projects
- Project complexity
- Financial capability
- Contract Terms
- Weighting:
The Project Selection Tool weighs the impact each risk factor will have on project outcome to come up with a cumulative score that measures the overall risk of success in a project a construction company is considering. This is the identical method Vegas odds makers use when setting the line on sporting events.
To utilize the Project Selection Tool:
- Answer the questions without overthinking them.
- Total possible scores range from 10% to 90%.
- The program is based on a firm’s knowledge about a potential project.
- If nothing is known about a project, probability of success is a “toss up” which in statistical language translates to 50/50 or a 50% probability. Therefore, the program score opens at 50% before adding knowledge about the project.
- As knowledge is added it raises or lowers the score.
- A higher score represents a higher potential for success and a lower score reduced potential.
- Go/No Go:
After receiving the total weighted score, the company’s CEO sets a “hurdle rate” (something like the odds maker’s over/under). This is the CEO’s “go/no go” decision point. Once a company uses The Project Selection Tool for a while, the decision to either make the bet or pass on a project becomes almost second nature. All the intuitive guesswork is gone. Like the bookie, the decision is based on statistical analysis.
The Bookie Is Never Emotional – Don’t You Be
Then ask yourself this question: When making the decision to pursue or to pass on a construction project do I measure the risk of failing accurately beyond any emotional bias just like the Vegas sports book does?
If you make The Project Selection Tool an essential tool in your management toolbox, your chances of winning every bet you make in project selection will go up dramatically. You will enjoy the same success in contracting as a Vegas sports book does in sports betting because you get to set the odds. Vegas sports books never lose money. Why should you?
For more information on Project Selection, read more at: https://simplarfoundation.org/?s=project+selection
For a broader view on Risk Management, read more here: https://simplarfoundation.org/?s=risk+management
To receive the free weekly Construction Messages, ask questions, or make comments contact me at research@simplarfoundation.org.
Please circulate this widely. It will benefit your constituents. This research is continuous and includes new information weekly as it becomes available. Thank you.
