Writing
Notes on modelling a company you actually run
Mostly about the gap between a number that looks decisive and a number that is true.
Why a single number is not an answerThe most dangerous output any model produces is one number with two decimal places on it.The price rise that looks freeMargin arrives in the first month and the bill arrives over the following year, which is why the spreadsheet and the outcome so rarely agree.Concentration is a number until it is an eventEveryone knows what share of revenue sits with the largest account. Almost nobody has modelled the month it leaves.What a department was holding upThe cost line is visible from the first meeting. The load bearing part takes three months to show up and nobody connects it back.Asking a model versus running oneBoth are useful. They are useful for different things, and the confusion between them costs more than either of them saves.Reading a brief without fooling yourselfA confident model is a very convincing way to be wrong, and the defences against that are all in the parts nobody reads.