Innovation Management

Risks of managing innovation in Excel.

August 24, 2022
12:34 pm
7 min

If you manage innovation in Excel you're familiar with this scenario: you put information into a shared spreadsheet. You try to save the document, and you receive a warning that the spreadsheet is currently in use.

So you have to decide between closing the spreadsheet and losing everything, or saving a second version of the file thinking and promising that you will come back later and put all the data together again.

The problem is that this never happens, and your team ends up with multiple copies of the same file, each carrying a piece of the correct information.

Since its launch in 1985, Excel has become widely disseminated as an excellent financial and data management tool in general in organizations. It is common sense that most companies use Excel in their regular routine.

And in this way, Excel became that grandmother's recommendation that cures everything, but as not everything is rosy, it often ends up only treating the symptom and not the root of the problem.

Companies that use Excel to manage innovation can experience huge failures and losses. This is because errors in Excel are common, but their identification is rare.

Such as the case of Fidelity® Magellan® Fund, which in 1994 lost USD2.6 Billion due to a change of signs on a banknote.

There is also the case of Lehman Brothers (once the fourth largest investment bank in the USA) which in 2008 sent 179 purchase contracts by mistake by hiding them instead of deleting them from the spreadsheet.

Or the error with the “cut and paste” function that caused a loss of USD24 Million for TransAlta Corp in 2003, the equivalent of 10% of its profit that year.

These and other “fiascos” of large companies in Excel you can find here.

And when we think about using Excel to manage innovation... the problems only increase, so let's list some of the reasons why you shouldn't manage innovation in Excel:

Few collaborative features for teams

Users' real-time interaction is completely flawed, Microsoft has been trying to improve this feature but has not yet been successful.

It does not have effective user commenting capabilities, and the risk of problems in the innovation project in Excel will be enormous without agile collaboration between the responsible team.

Tracking data changes by users is not effective.

Document version control is limited, especially if it is used by more than one person.

It is impossible to know which is the latest version, or the correct version of the document, whether the formulas are correct, or whether by accident some date was deleted or erased.

Not to mention that the organization is up to the users, who has never seen that folder full of files with the same name and that spreadsheet named final_final_final?

Details of innovations may be lost

As you may have already noticed, managing innovation in Excel is not a good idea!

When innovation projects and their information are divided into multiple tabs and spreadsheets, it is easy to miss problems and errors, miss important deadlines, or ignore misallocated resources.

This is because it reduces the overall vision of innovation, which makes decision-making and progress through the Stage-Gates stages almost impossible.

Maintenance requires a lot of effort

An important question that usually takes a long time to be answered: who will be responsible for maintaining the spreadsheets for that innovation in Excel and checking the quality of the data?

Depending on the size and complexity of the spreadsheet, it's easy to find yourself wasting time searching for, checking, or updating project information.

Generally, someone has to be responsible for carrying out this conference, or else all the reliability of your information goes down the drain.

Too much time structuring and processing data

Excel is already super famous for inspiring sighs of frustration and nervous attacks in employees when it crashes or gets stuck in some eternal loop to process a very large amount of data.

Furthermore, even when you are an advanced user, or it is a simple job, Excel takes a long time to do what it is trying to do.

Let's say you are trying to track the progress of an activity or generating necessary indicators from the Phase-Gates methodology, you will generally spend a lot of time structuring or cleaning your data to create the right table or graph.

In addition, when you manage innovation in Excel, you generally have to report some weekly or monthly reports, and there may be an entire extensive data structure or routine.

A proprietary innovation tool will offer instant reports and even real-time dashboards and KPIs, plus everything is already organized and ready to manage innovation, you will just follow the flow that was developed for the control and evolution of innovative ideas .

Data entered is not checked

Excel allows the user to enter data in a very easy way, but checking the quality of the data is limited, and if you want to program a check to see if that field was actually filled in correctly, the time it would take to implement this already affects you. it cost a lot of time that could be allocated to more priority activities in your routine.

Support is extremely limited

It is not news that Microsoft support has major limitations and this is not due to a lack of allocated resources, but rather due to the gigantic number of users, it currently has more than 1.4 billion users, now imagine that Excel is one of the most used tools and one of the ones that presents the most problems, it is impossible for everyone to be served effectively.

If I shouldn't use Excel, what should I use?

Don't get us wrong, Excel is a powerful tool, but the problem lies in the complexity of the organization when managing innovation in Excel and mainly in the long time allocated to using it correctly, in addition to the fact that real-time collaboration is not the Microsoft's strength.