Mastering management: managing in a downturn The following article was originally published in March 2006 as part of the FT Mastering Uncertainty series.
Conventional studies of uncertainty, whether in statistics, economics, finance or social science, have largely stayed close to the so-called “bell curve”, a symmetrical graph that represents a probability distribution. Used to great effect to describe errors in astronomical measurement by the 19th-century mathematician Carl Friedrich Gauss, the bell curve, or Gaussian model, has since pervaded our business and scientific culture, and terms such as sigma, variance, standard deviation, correlation, R-square and the Sharpe ratio are all directly linked to it.
