1. Why good Spreadsheets Make Bad
Strategies
Blog post by Roger Martin, January
In a provocative post, Martin, the dean of the Rotman School, challenged
business’s reliance on quantitative analysis. “We have a deep-seated desire
to quantify the world around us so that we can understand it and control it.
But the world isn’t behaving,” he wrote. “We must...consider the
possibility that if we can’t measure something, it might be the very most
important aspect of the problem.”
The notion that “if you can’t measure it, it doesn’t count” is flatly false. You can manage through fear and
intimidation, role modeling, love, random eccentricities, or mantras. None of those require
measurement.
We’re so in love with quantitative ideology that we’ve quite forgotten what it was supposed to measure in
the first place. “Loyalty,” formerly a concept of the highest emotional order, has been supplanted by a
mishmash of nitty-gritty behavioral observations about repeat business. We now talk about “human
capital,” reversing the proper roles of adjective and noun, largely so we can measure the impact of
behavioral change.
Education, especially in business schools, has gotten itself tied up in metrics knots. We have lost sight of the language
of emotion, motivation, and meaning. What we’ve gotten in return is a Skinnerian model of humans as rats chasing
cheese in a maze, all in the name of measurability
Keep on writing, Roger, we need it. Posted by Charles H. Green, CEO, Trusted Advisor Associates
I recall David Hume’s explanation of the difference between deductive and inductive reasoning. His work showed that
whilst we all have an unswerving belief in conclusions drawn from the latter, we were being irrational, particularly when
conclusions about natural phenomena were drawn.
It is compellingly seductive to try to predict the future as though it were a quantifiable extrapolation of the
past. Doing otherwise lays us open to critique and ridicule. People are far more likely to subscribe to our
view of the future (next quarter’s sales) if we can quantify what we are saying. Hence the need for more
data and information. But this can be an addictive toxin: More information merely creates the demand for
more information.
As Hume’s irrational actors, we are predisposed to want the surety of spreadsheets, even if history
regularly and disastrously proves them wrong. Posted by Les Gregory, Strategy Director, BAE Systems
Insyte.
There’s no doubt that qualitative factors are important and overreliance on mathematical models can be
dangerous. However, in my opinion, in most cases the world is suffering from insufficient or incorrect use
of data, not overreliance on data. The science of decision making with data is still in its infancy and, yes, is
flawed. (We don’t measure qualitative factors well enough.) In selling data-driven decision making, I see
huge resistance from people who refuse to use mathematical models simply because those models cannot
replace their gut feelings and experience. The fact is, human beings are poor judges
HBR article by Michael G. Jacobides, January—February
Strategy Tools for a Shifting Landscape

2. Enough with maps, graphs, and numbers, Jacobides argues. In this age, strategy
should be defined by narrative—plots, subplots, and characters.
Michael Jacobides is correct to emphasize the importance of narrative in guiding strategic change,
because organizational development unfolds over time. But Jacobides misses the mark when he asserts
that words are universally more understandable, powerful, and dynamic than numbers and images are.
When it comes to comprehensibility and impact, a picture may indeed be worth a thousand words. Saatchi
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Of situations that involve more than a few numbers. (Our prefrontal cortex struggles to handle more than seven items at
a time.) We’re easily biased by extraneous information (credit officers, for example, can be swayed by how loan
applicants look, dress, and talk), and fraudsters make use of such things.
Posted by Srikanth Velamakanni,
CEO, Fractal Analytics
Business ain’t science!
Posted by Ed Kless, Senior Director,
Sage North America
I think lots of people understand that quantities and qualities need to be balanced. What I’m still looking for are some
guiding maxims about when to trust one versus the other. Hope to see more... Posted by Michael Roller, Senior
Industrial Designer, Kaleidoscope
The beauty of financial modeling and spreadsheets is that they give the users flexibility, allowing them to strain or relax
specific assumptions. When economists get it wrong, it is a function of the assumptions used. The problem is not really
the financial systems; it’s oversight.
Posted by Kareem AL Zorkani, Business
Controller, Fayrouz International
Saatchi’s “Lovemarks” strategy,
which Jacobides touts as a model
of revised narrative, was born on
a napkin in Auckland Airport—as
chairman Bob Seelert converted
CEO Kevin Roberts’s respect/love
continuum into a best-of-bothworlds
two-by-two grid, with
“Lovemarks” representing the
northeastern (high respect/high
love) quadrant.
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