Explain a work concept with examples from your field

Concept: {{concept}}
Where I keep hearing it: {{where_heard}}
My job and field: {{role_and_field}}
What I think it means, or what confuses me: {{current_understanding}}

Task:
Explain this concept so that I can use it correctly in my own work and recognize when someone else is using it loosely.

Format:
1. Plain definition: one or two sentences with no jargon. If a technical word is unavoidable, define it straight away.
2. Why it matters in my field: two or three sentences on the decisions or problems it affects for someone in my job.
3. Three examples from my field: each a short scenario of three or four sentences that shows the concept at work. Make the first one simple and the last one a case where it is easy to get wrong.
4. What it is not: the one or two ideas it is most often confused with, and the difference in a sentence each.
5. Common mistakes: two or three ways people misuse the term or the idea.
6. Check yourself: three short questions I can answer to test my understanding, with the answers at the end.
7. Worth verifying: anything in the explanation that varies by country, industry or organization, or may have changed recently, so I know what to confirm with a colleague or an official source.

Requirements:
- Under 700 words, in plain language for someone who is smart but new to the idea.
- Use your general knowledge, but keep the examples illustrative. Do not present made-up companies, figures or studies as real. If a number helps, use a round one and say it is illustrative.
- If the concept has a formal definition (for example in an accounting standard, a law or a statistics textbook) as well as a looser everyday use, give both and say which one applies to my situation.
- Do not quote or cite a specific source unless you are confident it exists.

The explanation should leave me able to explain the concept to a colleague in two sentences of my own words.

If the concept means different things in different fields, or where I heard it is too vague to tell which meaning is intended, say so, use the meaning that best fits my job, and give the other meanings in one line each.