Management by Excel

“I have made a ceaseless effort not to ridicule, not to bewail, not to scorn human actions, but to understand them.” Spinoza (16th century).

In front of me a woman sits down and, as the train is leaving the station, she starts correcting an infinite pile of slides filled with an endless series of numbers, graphs and what seems to be the advances of a project. Meticulously she adds her comments. The annotations to the slides concern the smallest movements in the curve. Not one page passes her hands without having mentioned the word “Indicators” and “Analysis” over 5 times. Is this style of Management a guarantee for solid results? Let’s discuss numbers.

Micromanagement and Performance Indicators go hand in hand. It is the hunt for the “right data” that sets the perfect trap for a failed decision, let alone a flunked project. Instead of walking the premises of their department, managers prefer the comfortable chair of their office. Being convinced the right reporting is the key towards the right decision, many MBAs believe they have reality at their fingertips in the neat Excel-sheet in front of them. “Management by Excel” is leading companies to take decisions which, while following a logic decision path, escape every sense of common sense. It gives the sense that one can be everywhere and control every aspect of daily business.

The “new” or “modern” manager is no exception to this. Having been trained to understand the company they work in by mere numbers, graphs and occasionally a chart, they fail to understand what the numbers are all about, let alone the influence a decision has on daily operations. This is certainly a step towards “administration”, but is certainly not management. To manage, you must understand how your department works, how your coworkers think and how every aspects of your business relates to the “other” departments, suppliers and/or clients. It is an attitude to take from day one.

• Wander around: get a feeling of how things are going. Just by walking into “the other department” to say hello sets you in for breaking the oh-so-feared silo thinking.
• Know who is in, grasp their perspective and understand what they know: having a coffee break with your colleagues is essential in grasping the daily issues that never seem to get solved. Be careful taking advice from someone who is hardly there where the action is.
• Ask about the developments your colleagues expect to take place and understand how they feel the future will be. This will help you in setting your strategic targets. (Targets bound in a not so distant future to be linked to one or more indicators).
• Feel how your planning is being implemented. Lots of potential issues exist under the surface and are never measured. They only appear when it is too late.

No matter how intricately built, no matter how well set, KPIs always indicate a state of the past. Most of them are even set using past experiences and therefor cannot measure the future. For the millions of pages written on how to define your company’s indicators, only a part of reality can be captured even by the most complete of reports. It is of utmost importance not only to rely on the mathematical prediction of a “certain future”, but as any captain on a ship would do, interpret any report within the context of your experience, of your crew’s and that of your rivals (competitors). A ship seldom gets to harbor using the logic and interpretation of an intricate Excel formula.