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The Uncertainty Arbitrage

Victor Cheng writes on the CaseInterview.com blog:

In short, many clients have a (relatively speaking) poor ability to either absorb or reduce uncertainty in making big, high stakes decisions.

[…]

The greater the uncertainty and the greater the consequence of a wrong decision, the greater the anxiety the client feels. When a consulting firm comes and can legitimately reduce the uncertainty the client faces, the consulting firm charges a fee that on a relative basis is a small portion of the anxiety to be relieved — even though on an absolute basis might seem like a very high fee to you and me.

[…]

The reasonableness or outrageousness of the fee you charge has nothing to do with the fee itself. It has to do with the magnitude and severity of the problem that disappears once the fee has been paid.

The Uncertainty Arbitrage

By Josh Richards

Josh is a consulting network/ systems/ cloud engineer, freelance high stakes IT project manager, and former technology executive. He has consulted on information technology matters for over twenty-five years. In 2006, consulting became his primary source of income (just before the global financial crisis!). He’s a big fan of craft beer, freshly roasted coffee, artistic burlesque, good food, and applying science and reason to problems and opportunities small and large (and just for fun). When he has time and energy he also likes to get out on his bike or attend a soccer match.