Management Matters Blog

Avoiding Spreadsheet H*ll

 

By Mike Myatt, Chief Strategy Officer, N2growth

--Any CEO or entrepreneur still vertical and breathing has spent more hours than they can likely count pouring over poorly conceived financial information. I probably review at least 50 spreadsheets a week, and few things chap me more than feeling like the spreadsheet I'm reviewing was constructed by an alien. PowerPoint presentations certainly receive more notoriety for being the butt-end of business jokes, however in my opinion a boring slide-show pales in comparison to the sophomoric use of a spreadsheet. I know this may seem like a trifling rant of little consequence, but if you stay with me I promise to connect the dots in a way that will resonate with most of the senior executives that read this week's column.

Let me begin with the premise that few commonly available business tools are as valuable and proficient at justifying business logic, validating proof of concept, synthesizing data, and testing a variety of assumptions and hypotheses than that of a well-crafted spreadsheet. However, it is the caveat “well-crafted” in the preceding sentence that gives strength to my original premise. An adeptly authored spreadsheet is truly a thing of beauty which can serve to crystallize the ambiguity often surrounding financial complexities and decisioning conundrums. Contrast the aforementioned elation with the antipathy you feel when trying to interpret the anathema represented by some spreadsheet monkey’s hack attempt at sophistication and you will start to empathize with my frustration.

It should be clear by now that poor spreadsheets are a huge pet-peeve of mine. They not only waste my time, but the time of the people who prepared them to begin with. Rather than serving to advance an idea, decision, or initiative, a poorly conceived spreadsheet can have the unintended outcome of serving as the final nail in the coffin. Just as sound business logic and great presentation can serve to validate, the lack thereof can just as easily serve to invalidate. My point is that if something is worthy of taking the time to assess, then it is also worthy of good analyses. The following 5 items represent a few basic pointers for authoring a spreadsheet that will serve as an asset and not a liability. I would suggest that you forward this post to those within your organization who prepare your spreadsheets in hope of reducing the amount of unnecessary brain damage you’ll incur in the future:

1. Planning: Don’t lose sight of why you’re creating the spreadsheet to begin with. Major in the majors and don’t get lost in extrapolating massive amounts of useless information, or bogged-down with convoluted minor analysis, both of which can be dilutive to the mission at hand. Great spreadsheets are not built on the fly. Rather they are conceived through a rational planning process that leads to a seamless design and a good outcome. I suggest spending about 75% of your project time planning what you want to create and about 25% of your time creating it. 
2. A Narrative Introduction: Few things are more annoying than not being able to even discern what it is that you’re looking at. The first spreadsheet tab in your workbook should contain a textual, narrative overview of your business case. Explain what it is that you are attempting to prove/validate, as well as your methodology for doing so. Moreover, if there are any major points you want your audience to take away from the presentation, explain them in narrative form by “telling them what you’re going to tell them.” 
3. Headers, Navigation & Footnoting: Make your spreadsheet easy to understand and navigate by using consistent formatting, clearly defined row and column headers, collapsible data, drop down menus, pivot tables, freezing panes, and the appropriate use of color and graphics. Be sure to footnote your assumptions and cite your sources using external links where they provide value added support and back-up. Where possible use graphs and dashboards to present your data in an easily understandable fashion. Not everybody is a quant-jock that lives to crunch rows and rows of data. I can blow through even the most complex spreadsheet in 10 minutes if it is well architected, and I can spend an hour on a relatively simple, yet poorly designed spreadsheet trying to understand the intent, and validate the logic of the presentation. Presentation matters…
4. A Command of the Toolsets: Learn how to use Excel. If you don’t have the patience for self-taught learning, invest in some classroom education. If you won’t invest in learning the toolsets, then sub-out the work to someone who has. The important thing is not to get in over your head. Complexity that serves no purpose does not equal sophistication; it is just a waste of time. If you don’t know how to roll-up data, or use VBA in your spreadsheet don’t just take a whack at it…I would much rather review a simple spreadsheet that is well conceived than something that looks impressive but has no continuity. As with anything in business competency matters…
5. Testing: Make sure that your spreadsheet works. Test your formulas, assumptions and presentation. Once you think you have it where you want it, solicit peer review to insure you have the finished product you’re looking for. Much like you shouldn’t proof your own papers, you shouldn’t proof your own spreadsheets. Where there is smoke there is usually fire…when I’m reviewing a spreadsheet and I see one error, experience tells me there are likely more to follow and I quickly lose interest.

I hope this rather simplistic piece will provide you with some useful information to help guide the legions of evil financial deviants bent on wasting executive time and resources with sloppy, ill-conceived, and often useless spreadsheets.

         

Today's Column

Mike Myatt is on vacation and his regular Friday column will not be appearing today.

It's All About the Execution

By Mike Myatt, Chief Strategy Officer, N2growth

--Follow through...It seems like a pretty basic concept. When I was just starting out in business one of my original mentors told me "to just do what you say you're going to do, and that, in and of itself, will place you in a very select group within the business world." When I was younger it seemed impossible to me that doing something so basic could lead to great success. Well, now that I'm older and more experienced all I can say is "how right he was!" It never ceases to amaze me at the number of people that fail to deliver on their commitments.

The old cliché of "over-promising and under-delivering" has sadly become all too commonplace in the business world. Is it really that hard to fulfill on promises made? So my question to you is this...Can you, and do you, walk the talk?

So inexorably interwoven into the fabric of today’s business culture is this trend that I frequently observe people who have actually come to expect failure. Furthermore, when said failure occurs it is accepted as usual and customary practice. It is the failure to follow through that blows-up transactions, causes employees to seek work elsewhere, sends what were once loyal customers running to the competition and it can send even the strongest of brands into decline.

Failure itself is not necessarily a bad thing…in fact, I have always learned more from my failures than I have my successes. However accepting failure, not learning from failure, or failing through apathy or ignorance are corporate killers. As a person in a position of authority make sure that you set the chinning bar very high. Expect great things of people, equip them to succeed and don’t ever accept failure as being okay. When the inevitable failures do occur, conduct a failure analysis to determine what went wrong and why, transfer the knowledge gained across the enterprise and move on to more fertile ground.

Some people don’t follow through simply because they are lazy, and it is just easier to deal with the consequences of not following through than it is to actually invest the effort in getting the job done. Have you ever experienced the individuals who just tell you what they think you want to hear? These people fall into two distinct categories. The first category is the people pleaser. These individuals don’t like conflict and will say or do just about anything to avoid it. They believe if they tell you what you want to hear long enough, that it will either come true or that you’ll just go away, and either one is okay by them. The second category is comprised of the darker side of business. These are the individuals that will say or do anything to initially get your business, but once they have separated you from your money they could care less about what was said before the sale. In either case (well intentioned or otherwise) beware of those individuals that appear to be just saying what you want to hear as trouble will surely follow.

Sadly, all it really takes to stand out in corporate America is to follow the direction of my mentor and just do what you say you’ll do…It doesn’t matter where you went to school, how smart you are, what your title is or any number of other considerations, if you want to succeed learn to honor your commitments and execute. I am a perfect example of someone who has probably achieved more success in business than deserved by simply doing nothing more than honoring my commitments…I say what I mean…I mean what I say…I do what I say I’m going to do. It is just not that hard to follow through.

 

Making Ideas Count

 

By Mike Myatt, Chief Strategy Officer, N2growth

--It is my hope that week's column will serve to help dispel the myth that ideas are inherently good things. Let me state right from the outset that I place little value on ideas. Not only do raw ideas have little intrinsic value, but they are often very costly. While I stipulate to the fact that ideas can sometimes lead to great things, I also submit that it is more frequently the case that ideas lead to disappointment, tragedy, and disaster. Those of you familiar with my work are probably wondering if it is really me authoring this text...if you're baffled at how a champion of innovation can simultaneously be an idea basher, I urge you to read on and I promise the congruity will become apparent.

I want to start by actually defining what an idea is and is not. Ideas in and of themselves do not constitute a philosophy, principle, or strategy. An idea is not synonymous with a competitive advantage, an idea is not necessarily a sign of creativity, an idea does not constitute innovation, and as much as some people wish it was so, an idea is certainly not a business. To the chagrin of many reading this post, ideas in and of themselves are nothing more than unrefined, random thoughts. Ideas on their own accord are really quite useless. The truth can often times be harsh and difficult to hear, but it is nonetheless the truth.

Ideas are a dime a dozen...take a moment and reflect on all the ideas you've spawned over the years, or the many ideas that have been birthed by your friends, family, and professional associates and you'll quickly see that most of them never got lift-off. The problem is that most ideas never get implemented, and moreover even the best ideas when improperly implemented can cause great harm. You see, while creativity is a clearly a valuable asset, unbridled creativity where random, disparate ideas abound outside of a sound decisioning and execution framework will create distraction and chaos much more often than they will lead to innovation.

In fact, it is most often the organizations that demonstrate a “heard mentality” when rushing to adopt the latest ideas are the farthest thing away from being innovative. The result is that they will likely experience little more that yet another in a long line of great adventures that ended in frustration due to the time wasted and the investment squandered.  The reality is that many businesses are quick to recognize great ideas, but they often have no plan for how to successfully integrate them into their business model.

My advice to you is not to let your business get caught up in embracing random ideas…At least not without some initial analysis being conducted to determine the likelihood of success. Failed initiatives are costly at several levels. Aside from being costly, a flawed execution can cast doubt on management credibility, have a negative impact on morale, taint the brand, adversely affect external relationships and cause a variety of other problems for your business.

Every sound business initiative begins with a solid strategic plan. However while most anyone can coble together a high level strategic plan, very few can author a strategy that can be successfully implemented. In order for your enterprise to turn an idea into a monetizing and/or value creating event you should develop a strategic plan that attempts to measure the idea against the following 15 elements:

1. The idea should be generated within a solid framework for decisioning. It should be developed as a solution to a problem or to exploit an opportunity. The idea should be in alignment with the overall vision and mission of the enterprise.

2. If the idea doesn’t provide a unique competitive advantage it should at least bring you closer to an even playing field.

3. Any new idea should preferably add value to existing initiatives, and if not, it should show a significant enough return on investment to justify the dilutive effect of not keeping the main thing the main thing.

4. Put the idea through a risk/reward and cost/benefit analysis.

5. Whether the new idea is intended for your organization, vendors, suppliers, partners or customers it must easy to use. Usability drives adoptability, and therefore it pays to keep things simple.

6. Just because an idea sounds good doesn’t mean it is…You should endeavor to validate proof of concept based upon detailed, credible research.

7. Nothing is without risk, and when you think something is without risk, that is when you’re most likely to end-up in trouble. All initiatives surrounding new ideas should include detailed risk management provisions.

8. Adopting a new idea should be based upon solid business logic that drives corresponding financial engineering and modeling. Be careful of high level, pie-in-the-sky projections.

9. Any new ideas should contain accountability provisions. Every task should be assigned and managed according to a plan and in the light of day.

10. Any new ideas being adopted must lead to measurable objectives. Deliverables, benchmarks, deadlines, and success metrics must be incorporated into the plan.

11. It must be detailed and deliverable on a schedule. The initiative should have a beginning, middle and end.

12. Ideas need to be incorporated into strategic initiatives and not constitute disparate systems. They should be incorporated into integrated solutions that eliminate redundancies, and build in tactical leverage points.

13. Ideas should contain a roadmap for versioning and evolution that is in alignment with other strategic initiatives and the overall corporate mission.

14. A successful idea cannot remain in a strategic planning state. It must be actionable through tactical implementation.

15. Senior leadership must champion any new idea being adopted. If someone at the C-suite level is against the new idea, it will likely die on the cutting-room floor.

The bottom line is that new ideas are beautiful things when they become solutions or lead to opportunities. Properly implemented, capitalizing on process driven creativity, ideas can keep business from stagnating and cause growth and evolution. Just follow the 15 rules above and stay away from being an agent for change for the sake of change.

         

The Conflicted Executive

By Mike Myatt, Chief Strategy Officer, N2growth

--When it comes to productivity at the C-suite, many CEOs tend to struggle with deciding what constitutes highest and best use of their time. It has been my experience that all CEOs, regardless of tenure or ability, tend to find themselves conflicted with this issue at some point in time. While all employees deal with this same issue, it is infinitely more complicated for the chief executive. In this week's column I'll provide some thoughts about how to maximize the use of your time, while removing some of the more typical internal decisioning conflicts.

One of the root issues that most CEOs need to address when coming to grips with improving their productivity is the fact that most of them don't have a job description. In fact, out of the CEOs I've worked with over the years, only about 10 percent of them actually had formal job descriptions when I first started working with them. There appears to be an unwritten rule for CEOs that goes something like this. By the time someone reaches the esteemed position of CEO they automatically know what to do, always having the right answer to any and all problems. The truth of the matter is that CEOs have a greater need for a job description than any other employee within the company.

A good CEO wouldn’t allow other members of their executive team, management team, or staff to operate without a job description. So I ask you, why then, when the CEO has more responsibility, more accountability to a greater number of constituencies, and ultimately more at risk than other employees, do they not take the time to clearly define their duties, responsibilities, obligations, and performance expectations? There is no real pat answer to this question, but rather the reasons underlying the answers consist of a convoluted combination of arrogance, over-confidence, laziness, confusion, and ignorance.

The CEO job description, while often difficult to accomplish, is certainly the shortest job description on record, and frankly a rather a simple one: To ethically increase shareholder equity. The problem therein lies in decisioning how a CEO should go about accomplishing that task. CEOs are constantly faced with deciding between strategy and tactics, vision and mission, leadership and management, internal vs. external communications, branding vs. advertising, marketing vs. sales, talent vs. resources, and on-and-on. Further complicating these matters is that great CEOs need to touch on all these points in order to get the job done.

While one person clearly cannot do it all, the CEO also cannot abdicate responsibility. On one end of the spectrum many CEOs either misunderstand the difference between ultimate responsibility and day-to-day responsibility, or on the other end of the spectrum they cannot or will not accept responsibility for anything at all. The truly great CEOs clearly understand their role and are masters of execution. They realize the influence they possess and the powerful impact that their decisions and actions have both internally and externally. They neither take on too much responsibility nor do they ignore their responsibility.

I have always believed that the role of CEO is first and foremost to be a leader. It is the CEO’s job to provide leadership based upon a clearly articulated vision and a well defined strategy. Priority number two is team building and talent management. If the vision and strategy are clearly articulated, and people are hired, mentored, and developed based on a values based leadership model, then you will develop an outstanding corporate culture where innovation and performance are the rule and not the exception. One of the main keys to generating organizational leverage is for chief executives to know when, where and why to deploy (or redeploy) talent and resources. It has been my experience that it is much easier to recruit talent or acquire resources than it is to properly deploy talent and allocate resources.

The successful CEO understands that they are responsible for vision, mission, strategy, culture and talent management, and that executives and management are responsible for goals, tactics and process. Great companies are focused, collaborative and innovative which only happens in an organization created and led by great CEOs.