Intuition gained from a model can outstrip other benefits.
A First Job
Many years ago, fresh from college, I joined one of the first spreadsheet modelling groups in the UK*.
We used computers like this:
to create spreadsheets like this:
which were used to optimise beer advertising, chocolate manufacturing, hotel occupancy, retail store layout and many more.
A Significant Lesson
Among all these models, one of the most significant lessons I learned came from a model we built to help privatise the UK’s electricity network, National Grid.
It was undoubtedly the most complicated spreadsheet model I have ever been involved with. It comprised many (probably hundreds of) Lotus 1-2-3 spreadsheets all run under the watchful eye of a team of modellers led by Paul Tayler.
The focus of the model was to help National Grid negotiate with the government to set “X”, the factor above or below inflation which would cap its revenue post-privatisation.
Hundreds of spreadsheets, four consultants, a dedicated office, all to set a single number!
But it was an incredibly important number, one which would have a significant effect on National Grid’s business for years to come.
The fascinating thing was that, as the team ran scenarios after scenario through the model, they began to get a better and better, intuitive feel for National Grid’s business.
So much so, that during the final negotiations between National Grid and the Department of Energy, the chairman’s car would stop at our office to pick up one of the team (usually Paul) so they could attend the meetings.
The instinctive understanding they had gained from running the model over and over again made them invaluable in dealing with questions from the other side when they searched for ways of trying to squeeze National Grid to a lower X.
All the scenarios run, all the numbers calculated, all the pages printed and in the end, one of the most valuable things about the model was the intuitive learning it had developed in people’s heads.
Squirrel365
Which makes it fitting that, all these years later (and by a very circuitous route) I am now working with Squirrel365, a remarkable tool which allows spreadsheet models to come to life visually and interactively.
Squirrel allows you to quickly and easily add the type of interface shown in the video below to an existing spreadsheet model
In a raw spreadsheet, you can repeatedly type numbers into cells and see the one-step change but that is nothing compared to sliding a slider and seeing the continuous effect it has on the outputs.
On top of this ability to interact more deeply with your model, there are the wider possibilities. A few summary slides in PowerPoint might capture some high-level points from your model but an embedded, interactive view of the model (right there in your presentation) is going to have a much more profound effect.
Being able to visually interact with your model in your presentation, will engage your audience in a way that a static slide deck or the raw spreadsheet model never could. It will help your audience get a feel for the operation for your organization in a completely different way.
The interaction is not limited to presentations, send out a simple web link for others to interact with the model themselves, it is even possible for them to store and retrieve specific scenarios of interest. All with one click and without the perils of giving access to the workings of the underlying spreadsheet.
Your spreadsheet model deserves the Squirrel treatment, not only will it make a name for you, it will also spread the learning from your model more widely across your organization. If you are interested take a no-credit-card-required free trial.
*The group, Decision Systems, was part of the Management Consultancy arm of Deloitte Haskins & Sells (one of the “Big-8” accounting firms) and was set up by its founding partner Dennis Sherwood. It is a testament to Dennis’s vision that what was unusual back then is utterly commonplace today and that the group still exists (after a acquisitions, mergers and at least one name change) as part of IBM Global Services.
