When all you have is a Hammer

There’s an old saying – if all you have is a hammer, everything looks like a nail.

The underlying truth is that we all limited by the tools that we know how to use. Often, we don’t even recognise the limitations and the ways that tools make us unprodutive.

In this video I’d like to talk about the spreadsheet, and explain why this tool – and the thinking that goes around it – is limiting organisational productivity.

The spreadsheet was designed back the 1980s as a simple way to perform financial analysis. Back then, we didn’t really have access to large amounts of data like we do now. So a simple matrix of rows and columns was more than enough.

Almost 40 years later, we’re still using spreadsheets more than ever, and most people are no so accustomed to thinking that the spreadsheet is the only tool they need. Worse still, our organisational structures are set up around this paradigm, and this makes us inefficient.

To illustrate this point, I’d like to share a real example. A little while ago now, I was working for a company that was moving from fiscal year to calendar year, and the needed to convert their consolidated financials. The accountant, who was running the project, approach the IT department and asked for help.

He realised the problem was complex because there were millions of rows of data, and the closing balances for each period needed to be recalculated. The accountant knew this was going to hard to achieve on a spreadsheet, so he approached the Business Intelligence team for support.

Now the Business Intelligence team had tools that could manipulate data, but wanted to build it in the corporate dashboarding solution – because that’s the tool they were comfortable with. And because there were formal processes around that, it would take at least a month to complete, assuming it could jump the queue of outstanding work.

So the accountant had no confidence in the IT team and decided restate the data himself, using the tool he was comfortable with Excel. It would have taken him close to three months to complete, at a cost to the organisation of tens of thousands of dollars.

Today, I can complete the same task in a little under 30 minutes using some open source data science packages.

That’s one example in one company. How many more accountants around the country – or indeed the world – are wasting hours manipulating data in spreadsheets.

Now spreadsheets are great for ad-hoc financial analysis, which was the purpose for which they were intended, but they are not great for running business processes or transforming large volumes of data.

But the problem we have today is that we create an unnatural separation within organisations between those turn data into information, and those who turn information into knowledge. In this example, both IT and Accounting are limited by the tools the’ve become comfortable with, and neither sees the problem in its entirety.

To make the next massive leap in organisational productivity, we need to be removing this unnatural separations create processes that turn data into knowledge.

The limitation is not is the technology, the limitation is people – and organisational willingness to embrace different ways of working.

This is hard to achieve in most organisations because of the artificial silos that organisations create around information technology. And that’s one of the biggest factor affecting technological adoption.

And in the words of voltaire – It is difficult to free people from the chain they revere.

 

 

 

 

Leave a Comment

Scroll to Top