(2014-10-24) Levy A Spreadsheet Way Of Knowledge

Steven Levy: A Spreadsheet Way of Knowledge. ..republish a long piece I wrote 30 years ago...The piece first appeared in Harper’s, November 1984.

As Dan Bricklin remembers it, the idea first came to him in the spring of 1978 while he was sitting in a classroom at the Harvard Business School.

The question Bricklin was pondering that day in 1978 concerned how he might use what he knew about computers to help him in his finance course

Bricklin and his classmates would need ledger sheets, often called spreadsheets. Only by painstakingly filling in the pale green grids of the spreadsheets would they get an accurate picture of the merger and its consequences.

It occurred to him: why not create the spreadsheets on a microcomputer?

With a computer programmer friend from MIT named Bob Frankston, he set to work developing the first electronic spreadsheet program.

Bricklin and Frankson released VisiCalc (the name was derived from Visible Calculation) in late 1979.

For the first time, businessmen have at their fingertips sophisticated and flexible means to chart all the variables – from interest rates to warehouse space – that make (and break) businesses

A virtual cult of the spreadsheet has formed, complete with gurus and initiates, detailed lore, arcane rituals – and an unshakable belief that the way the world works can be embodied in rows and columns of numbers and formulas

It is not far-fetched to imagine that the introduction of the electronic spreadsheet will have an effect like that brought about by the development during the Renaissance of double-entry bookkeeping

the spreadsheet has begun to be a forceful agent of decentralization, breaking down hierarchies in large companies and diminishing the power of data processing

most of these new entrepreneurs depend on their economic spreadsheets

Mitch Kapor, age 34, a former teacher of Transcendental Meditation, is chairman of the board of the Lotus Development Corporation

“Compare the expansion of business today to the conquering of the continent in the nineteenth century,” Kapor told me

“The spreadsheet in that comparison is like the transcontinental railroad. It accelerated the movement, made it possible, and changed the course of the nation.”

As Marshall McLuhan observed, “We shape our tools and thereafter our tools shape us.” The spreadsheet is a tool, and it is also a world view — reality by the numbers. If the perceptions of those who play a large part in shaping our world are shaped by spreadsheets, it is important that all of us understand what this tool can and cannot do.

Ezra Gottheil, 34 is the senior product-design planner at Lotus

Computer programs are said to use different “metaphors” to organize their task; a program might use the metaphor of a Rolodex, or a file cabinet.

grid of a ledger sheet, the metaphor used by Lotus

saving time is hardly the only benefit of spreadsheets. They encourage businesses to keep track of things that were previously unquantified or altogether overlooked.

Yet what really has the spreadsheet users charmed is not the hard and fast figures but the “what if” factor: the ability to create scenarios, explore hypothetical developments, try out different options.

The what-if factor has not only changed the nature of jobs such as accounting; it has altered once rigid organizational structures. Junior analysts, without benefit of secretaries or support from data processing departments, can work up 50-page reports, complete with graphs and charts, advocating a complicated course of action for a client

The experiments Stein and those like him carry out are far-flung attempts to formulate the ultimate model, the spreadsheet that behaves just like an actual business. (simulation)

Because spreadsheets can do so many important things, those who use them tend to lose sight of the crucial fact that the imaginary business that they create on their computers are just that-imaginary

Intangible factors aren’t so easily quantified.

Get out of the restaurant business! the spreadsheet said. What the spreadsheet left out, of course was the unquantifiable emotional factor — Maxwell loved what he did

Maxwell was his own boss and could follow his instincts. But a corporate executive who ignored such a clear-cut bottom-line conclusion might be risking his professional life. He is more likely to follow the numbers turned out by spreadsheets.

The flexibility of spreadsheets can encourage other heartless moves from headquarters

Spreadsheets have no way of dealing with hunches, either

People tend to forget that even the most elegantly crafted spreadsheet is a house of cards, ready to collapse at the first erroneous assumption

With spreadsheets, the danger is not so much that incorrect figures can be fed into them as that “garbage” can be embedded in the models themselves. The accuracy of a spreadsheet model is dependent on the accuracy of the formulas that govern the relationships between various figures. (GIGO)

An assumption might be an educated guess about a complicated cause-and-effect relationship. It might also be a wild guess, or a dishonestly optimistic view.

A notorious example of this kind of fiddling occurred when David Stockman, Director of the Office of Management and Budget, was drawing up the budget for Ronald Reagan’s first presidential term.... the computer calculated that the plan would lead to unprecedented federal deficits. Did Stockman warn his president that they were on a dangerous course? No. “He changed the economic assumptions fed into computer model,”

Increasingly, however, businessmen are not telling but letting their spreadsheets do the talking. Because a spreadsheet looks so authoritative – and it was done by a computer, wasn’t it? – the hypothetical models get accepted as gospel. (not-thinking tool)

As spreadsheets are used more for persuasion and negotiation, people are becoming rather sly about their design.

Lotus 1–2–3 can turn figures and formulas into graphs—graphs that spreadsheeters can use to skew and oversimplify reality. “With graphs, things take on greater weight,” Allen Sneider said. Sneider expects spreadsheets to become more persuasive – and the distortion of reality greater – when color printers become more common.

Using electronic spreadsheets, everyone can run his or her own business. Thousands of Americans are attending classes to learn about the spreadsheet way of knowledge.

There is no doubt that the electronic spreadsheet saves time and provides insight; there is no doubt that even greater benefits will one day be derived from these grids. Yet all these benefits will be meaningless if the spreadsheet metaphor is taken too much to heart. After all, it is only a metaphor.