Microsoft Excel is a dangerous tool. Although excellent software, Microsoft Excel has some part in the current recession. Back in the early nineties when I was sitting for my MBA, I used it to calculate the potential of a new business idea. ‘Navigator’ was to be a piece of software distributed by travel operators interactively selling holiday destinations in sound and motion. Of course the business plan accompanying it was made in Microsoft Excel. In just a few hours, we had projected how the business would grow. We’d see fat profits. This time next year we would be millionaires! Microsoft Excel said so! After investing ALL my savings into the project, I quickly found out that calculating yourself rich in Excel was just way too easy. Excel was deleted from my PC and the network.
Over the years though the use of spreadsheets became increasingly popular. Accountants and investors projected (and expected) infinite growth based on its formulas. Business managers, blinded by fat profits displayed in numerous different colorful charts, made the corresponding investment decisions. Excel operators even started making it into decision making positions – and competing with their excel operator friends for the biggest and most ‘profitable’ spreadsheet.
Even BANKS, notoriously slow, and conservative, succumbed to the Excel bug, and so things multiplied and we now have the biggest recession since the 30’s.
I have always ignored the content of spreadsheets, preferring that projected growth be explained in words. It’s a lot harder to do, and it sifts out quite a bit rubbish from the get -go. Business decisions should be based on intuition, not on spreadsheets.