Spreadsheets, our seductive fantasy about the real world
How valuable are bar charts, spreadsheets and all the counting that managers do? Quentin Millington, founder of London-based consultancy Marble Brook, explains the risks of reducing the world to a number.
Company executives and managers love to count things. This is especially true of people who work in Finance. After all, accountants count better than anyone else in the boardroom.
Our passion for counting
We love to count profits and losses, costs and benefits. We are obsessed with ‘the financials’, in particular with shareholder return, the yardstick of corporate performance for over a century.
We also count work. Think back to Frederick Winslow Taylor, champion of the Efficiency Movement in the early 20th century. Taylor was known for his stopwatch, which he used to reveal tiny inefficiencies in how people did their jobs.
Today, counting remains the lifeblood of management culture. Should we forget to boil everything down to a number, then colleagues, customers and regulators soon direct our attention to the nearest spreadsheet.
The past was simpler
Counting is an attempt to capture individual and company performance – past, present and future. Numbers help us justify what we did, enable what we are doing and guide what we will do.
In the past, the world was simpler and all this counting made at least some sense. Most people cared only about the money that companies made – how they made it was of minor importance.
Likewise, many jobs were plain: ‘Screw this widget into that widget 20 times an hour and the boss will be happy.’ There was little room for failure and employee well-being was not a question.
Disruption brings complexity
Shifts in consumer appetite and societal values have combined with climate change and technology advances to make business far more complex than it was in Taylor’s day.
Executives and managers must grapple with two new realities. First, society expects companies to do more than merely create wealth. To thrive, business has to help solve climate change, enhance the lives of people, and make money.
Second, individual performance has moved on: rapid widget assembly will no longer deliver competitive outcomes. To succeed, employees must bring imagination to solve unfamiliar problems, harness complex networks and adapt at pace.
Numbers are a seductive fantasy
We can, of course, assign numbers to environmental, societal and economic outcomes. We can also measure employee engagement and productivity. But how well do these proxies capture the world we now have to manage?
When we insist on counting things, on applying a number or a ratio, we create a seductive illusion that reality is easy to control. However, a number, a spreadsheet or a model is little more than a fantasy.
Ironically, this reductionism obscures how complex variables interact; it blinds us to emerging risks. False confidence then reigns across the business – and it is here that individuals, and companies, fail.
Lead with confidence
The world outside the boardroom is calling for more imaginative strategies that generate value for all stakeholders. These in turn demand a more open-minded approach to leadership. Bar charts, spreadsheets and counting are one resource that may guide the action we take. But they remain a simplistic narrative about a complex world.
To thrive, the people who run companies must lead with confidence into a disrupted future. In this uncharted place, the spreadsheet will be an alluring – but nonetheless deceptive – guide.
Curious to see how the senior team can triumph in an unpredictable world? Visit the Marble Brook website to request our no-nonsense guide, with 24 ways to master disruption and create value that lasts.