Here are 3 problems on risk and resilience to be cracked —
Problem 1 — Situation 1
Suppose we are given the following facts/observation —
50% of new start-ups fail in their first year of operations.
50% of the balance start-ups fail by the time they reach their third year of operations.
Again 50% of the remaining survives the 5th year of operation
Then 50% of the survivors would go up to the 10th year.
Those who survive the first 10 years of operations live to flourish during the next 15 years without fail.
Now imagine that you are the head of an insurance group mulling over the insurance premium one should charge for different age groups. Further suppose that you are considering two age groups — a) 20 yrs – 30 yrs b) 50 yrs +
For which group would you be charging more premium and why?
Problem 2 – Situation 2
Imagine yourself as a Jewish prisoner in one of those dreaded and hateful concentration camps. Day by day you start losing hope of survival. After months of inhuman torture you have almost resigned to fate.
Then suddenly one early morning with dawn yet to break out you hear some commotion outside your cell. A fellow prisoner comes and breaks your cell open. You and your fellow prisoners tumble out and join the growing force who overpowers the German soldiers and kill them.
The prisoners break open the gates and rushes out to meet the haze of a bleak winter morning. They start running on the only road they find that leads away from the prison. They know this road well. They know that if they keep running for another two hours they would be out of German clutches and find their way home. So they keep running.
On one side of the road there is a dense forest. And you know that you can make your way home through this dense forest. But you clearly don’t know the way out. However, you know that if you find the right path you would reach home in about 40 minutes to an hour.
You discuss with your friends the option. They refuse to take to the forest.
What do you do? And why would you be doing that?
Problem 3 – Situation 3
Suddenly your 86 yr old father suffers from intense breathing problem and had to be rushed to a nearby hospital. The doctor says it is serious and does not rule out the possibility of a heart attack. They recommend tests and procedures and ask for your consent whether they can do an angiogram and a by-pass if they find blockages.
You are aware of the following facts about your father: —
He has survived a bitter war.
He has survived a partition (India & Pakistan) at a young age and had to leave behind everything in East Pakistan to settle in a strange place.
Years back he had blockages of the arteries (about 70%) but then over a two year period the doctors found all arteries to be clean (0% blockage).
You know that blockage does not necessarily mean a heart attack. It has more to do with millions of special cells in the heart beating synchronously. Going out of sync might trigger a heart attack.
You see on the control monitor that it is a case of breathing problem.
What would you tell the doctor – to go for the angiogram or not? How do you come to that conclusion? If the decision is not to go for an angiogram what is your estimate that he would be back home safe after treatment of the breathing problem alone?