of It
Our early spreadsheet models and forecasts can evolve into our ‘comforts’ on which we develop and build confidence in our ideas. There is however, one major flaw in this approach and that is that our spreadsheets are subjective and can be designed to tell us what we want them to tell us.
No-one ever wants to admit that a good idea they have may actually be a bad idea for a whole range of different reasons and for this reason we tend to develop all the upside for our new idea before we consider any of the Con’s and downside.
“What did he just say?”, I silently asked myself while looking at my colleague for some indication that I had not heard what I just had. His look of confusion was all the confirmation I needed.
After listening to the opinion of our latest Non-Exec Director it became clear that too much of our planning and negotiation had taken place within our own echo chamber and that we had essentially failed to consider several potential downside of our business models. There simply had not been enough “What if...” discussions before proceeding to contract.
We agreed to boot up our laptops so we could all take a closer look at the underlying business models associated with our big deal contract. After a period spent tinkering and adjusting our ‘comfort’ spreadsheets they began to look more more objective in their forecasts and in doing so we had highlighted some very serious potential flaws in our numbers. It was clear that we had some more work to do before we could be confident in signing off that particular agreement.
That first meeting with our new board very possibly saved the business and at the very least woke us up to the reality of the expectations upon us.
I intend to continue developing Big new ideas but in doing so I will try to stay out of the echo chambers and aim to develop objective models with a view to accepting the fact that a good idea may in actual fact be a bad one.
Get the picture!
Pete Boswell
www.twitter.com/peteboswell
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