in Business Design

Numbers can be prototypes

Something I knew on a surface level but didn’t internalize until taking a Financial Modeling class was that numbers can be prototypes.

When financial people build models in a spreadsheet, they’re building prototypes. Just as a designer might sketch on paper or carve a piece of foam, financial modelers will quickly sketch in a spreadsheet (or on the back of a napkin).

What’s odd here is that designers usually think of numbers as representing exact quantities. When a designer writes 100,000 he means 100,000, whereas a financial modeler may mean 100,000 +/-20,000, or she may mean on the order of magnitude of 105 and not 106.

The opposite gap in understanding is true as well. Designers are often hesitant to show clients an early design in the fear the client will misunderstand which aspects are high fidelity and which are low fidelity.

An aptitude for building and understanding different kinds of models seems to be an important skill for integrated thinkers. The question for me is, how can we develop this aptitude, and how to teach it to others? My approaches so far include:

  1. Gradually move from similar skills you do well to new skills: for example, when learning financial modeling you might start by sketching a graph of the variables, or writing out the financial scenario in prose format, and then turning that into a spreadsheet.
  2. Play simulation games: which model many different kinds of variables and interactions in a dynamic, interactive way, allowing you to iterate and learn. Making our own simulations will become an important teaching skill.
  3. Work with someone who already does both well: these are rare, but they do exist.
  1. I’m talking at the Summit about using games as a tool to transform team mindsets (and skillsets) – right now I’m reading Rules of Play to understand the underlying principles better, and talking to a few game design folks. I want to capture my visceral experience in using games, but have a solid grounding in principles too – we’ll see how it turns out.

  2. Its funny, because being a “numbers guy” myself, I have always treated my financials as prototypes. For the most part, in business development, my financials are purely forecasts and not fact. I guess in my one-track mind (sell, sell, sell) I had completely forgotten that many other people treat numbers as fact. This opens a whole new world of thinking for the way I forecast.

    In fact I’ve often wondered about creating a forecasting system that does not show any numbers, but instead presents the information in a combination of layers and colors, stacked atop one another to represent the most likely to least likely project wins. Have you seen anything like this out there already that you could point me to?

Comments are closed.