Don’t Blame Spreadsheets for Short-Term Thinking

Don’t Blame Spreadsheets for Short-Term Thinking

November 11, 2016 |

Clayton Christensen wants organizations to look beyond ratios. Excel, coupled with cloud-based CPM, is ready to help.

If business leaders listen to anyone, they’ll listen to Clayton Christensen.

Besides being a highly-respected business professor at Harvard University, Christensen is also widely considered among the first to use (and define) terms like “disruptive innovation” which are now bandied about everywhere in corporate circles. He co-wrote The Innovator’s Dilemma, which showed just how hard it is to stay one step ahead of newer, nimbler competitors.

This is a guy who knows what he’s talking about. Except maybe when it comes to spreadsheets.

In a recent interview on Management Today, Christensen takes aim at Excel for causing many CFOs and the rest of business leadership teams from going astray in terms of strategy.

“When [Excel] spreadsheets were developed in the 80s, it allowed analysts to start analyzing companies not on whole numbers but on ratios,” he tells the publication. “It causes businesses to manage by the balance sheet, rather than the income statement, and they’re not able to innovate.”

That may or may not have been true in the 1980s, but with all due respect to Professor Christensen, it doesn’t reflect the wide range of ways in which Excel spreadsheets can be applied to decision-making today. The data in spreadsheets, particularly when coupled with corporate performance management tools and rendered in effective dashboards, is ideally designed for innovation, rather than something that inhibits it.

If you want some inspiration for spreadsheet use cases, look no further than a man who helped steer one of the world’s largest software companies, as reported by Bloomberg:

When not jumping around on the sidelines of Los Angeles Clippers games, former Microsoft Corp. chief executive officer (Steve Ballmer) has been spending his retirement on the inside of an Excel spreadsheet. Ballmer and a team of about 25 data geeks have been poring over more than three decades of government documents to create a comprehensive accounting of U.S. spending. The goal is to treat the nation like a company and create what Ballmer describes as a “10-K for the government,” like the one publicly traded businesses are required to file with regulators each year.

Ballmer’s project may involve ratios too, of course, but Christensen’s point is to avoid short-term thinking when you’re looking at data. Excel doesn’t force anyone to do that, and in fact, can offer just the opposite today. Spreadsheets have already proven themselves a long-term solution – now we just need to apply them to some long-term thinking.

The post Don’t Blame Spreadsheets for Short-Term Thinking appeared first on Blog | Vena Voice | Vena Solutions.

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