Spreadsheets aren’t strategy, as Umair Haque is fond of saying.
Turns out they can actually be quite dangerous, for the temptation they bring to reduce a business (a complex, human enterprise) to a set of numbers on a page. Even more dangerous when they trick us into thinking we can predict the future and call the extended line of equations based on assumptions facts. And then, once the “facts” are there, start getting upset when behaviours in your lovely bundle of corporate human potential don’t follow the script.
I loved this post yesterday by Mark Earls about how central planning was utterly discredited at a macroeconomic level (i.e. communism was a disaster) but at a micro-economic level (in our businesses) we persist with command and control approaches.
Mark muses on an excellent article by Simon Caulkin in Sunday’s Observer called Inside Every Chief Exec There’s a Soviet Planner:
Does your CEO tell the shareholders (and the other stakeholders of the business) stuff like, “we’re not sure what’s going to happen….”? Probably not – certainty in what will happen and the plan to meet it are essential fictions of today’s CEO.
All of which leads to the bloating of the managerial classes in any large organisation
“Central planning imposes a huge co-ordination burden – which is why there is just so much management.”
Curious then, as Caulkin observes, that when coupled with a fervent commitment by the same folk to laisser faire macroeconomics, we get oh….a total mess.
I think I totally failed to post a comment yesterday, so here’s what I was going to say:
It seems such an obvious contradiction now, but we’ve indulged the spreadsheet fantasy of control and predictability in our companies. In fact, to be outside it is to be a heretic.
“What are your projections for Q-whatever, FY-blah?” are questions that seem to demand a suspension of disbelief by all involved.I recommend standing to attention, staring straight ahead and appending the word “comrade” to the end of any response to such questions from now on. It’s the only sane response…
Large organisations need to plan, but plan in a more agile way. One Truth is a lie. A spread, a loose plotting of your possible courses, and some ideas about how you would react to different scenarios…
There are three things this all boils down to for me:
- Organisations aren’t machines.They are far more human and complicated than that. If you treat them like machines they will break.
- Don’t be trapped by your plan. Spreadsheets, business plans – as with all innovations, tech, methods – should serve us, support human potential, not make servants of those gathered round them.
- Management is a burden. It needs to be kept light or it destroys value.
Otherwise you end up, Like Hugo Chavez and his cohorts here in this public examining of the accounts trying to work out how you went off-plan…
And when the answer doesn’t match the spreadsheet…
Questions need to be asked. The spreadsheet can’t be wrong, so who is…
Oops.
Anyway, thanks to Mark for summing it up nicely like that. He and the ever-wonderful Johnnie Moore have put together a podcast yesterday on the same subject which I shall be listening to with great interest later…