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Revelation: Answers aren’t in the numbers

By - Last modified: April 16, 2013 at 1:12 PM

Obsession with “the numbers” exploded in the 1960s when decision theory crossed paths with low-cost computer power. At that moment, business began rushing toward a new “law” -- that, with enough numbers, anyone can run anything.

Quickly, business became more about financial math than business acumen. More about logic than judgment.

Now that pendulum is swinging back. And like most cultural swings, being out in front, but not too far, is always a position of advantage for the person in the Job At The Top.

Here’s what you need to know:

Even the toughest financial zealots are beginning to realize that there’s more to running a successful business than spreadsheets. Too many Excel-justified loans have failed and too many over-analyzed investments in private equity and venture portfolios have disappointed. Most are realizing now that, in order to make money, you actually have to make a business better, not just model it.

But still, you can’t ignore the numbers game. Because there is good in it. But moreover, because so much of our financial infrastructure still is aligned around it.

In your own world, in your Job At The Top in your company, you can think differently. Using the Back Of The Envelope and other frameworks I’ll be introducing in subsequent installments, form your thoughts before turning to the arithmetic.

The role of modeling, then? To calibrate, not to discover, what’s best for your business. Discovery is your responsibility -- and that treasure’s not found on spreadsheets.

So, what does this mean about how to do your Job At The Top?

It means you need to be Head Thinker, not Head Mathematician. Your field of view needs to be broad and deep. You need to spend most of your time gathering and synthesizing information.

It means spending more time in the company of customers, knowledgeable observers, other smart business people, trend watchers and technologists. It means spending time afterward, alone, looking for the patterns and the big ideas. And it means spending more time with your team. Engaging them in the later stages, not the earliest, of your thinking.

The first several installments in this series have softened up the beachhead for this postulate. Those that follow will reinforce the argument, with more specific advice for how to shift your role in your Job At The Top to match these demands.


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