Can we really trust spreadsheet numbers? Are spreadsheet-based reports the eye in your mud, or the mud in your eye? Do the numbers really help you to make sense of a complex situation, or do they cloud the issues by muddying the waters even more?
Picture credit: Annie in Bezier
This is a very serious consideration because so many key business decisions are made on the basis of spreadsheet analysis but it is not always clear to the audience whether the spreadsheet numbers are actually [transactional] data or purely subjective opinion.
I have been surprised over the years by just how many large organizations are still driven by spreadsheets, despite massive investments in so-called enterprise systems. In fact, I have yet to meet a corporate reporting system that does not include significant scope for subjective opinion by the reporters.
The consequence is that objectivity takes a back seat to the subjective presentation of ‘information’ and this cannot be good for effective corporate governance, in any field. I do realise that objective data is not always available, particularly when reporting on so-called ‘soft numbers’ (such as intangible benefits).
Maybe we just need reporting systems that differentiate clearly between objective [transactional] data and subjective [interpreted] opinion?
This could be quite easily achieved by using font-based text indicators: objective [transactional] data could be emboldened while subjective opinion (anything that has been originated, or smoothed, by the reporter) could be italicised. Colour coding is good too, providing the colours are suitable for colour-blind readers.
A reasonably small idea but at least we might have executive reports that can be our eye in the mud, rather than just more mud in our eyes.
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I absolutely agree!
What is even more likely is that spreadsheets can cloud the fact that data is generated to provide the answer the presenter first thought of – data or no!
We’ve all seen options’ appraisals manipulated by tweaking the starting values of the parameters.
That said – if tweaking the parameters on the basis of debate about their significance and sensitivity is done openly and in recognition of a range of participants’ subjectivity results in a decision, then sometimes some benefit can come from participants making a decision rather than not. It all depends on their understanding of what the decision making model means. If it’s good the result may be helped by spreadsheets.
But how many participants have the time to do this and this decide blinded by dancing numbers?