Using Spreadsheets for Communicating Data? Here Are 4 Reasons You Shouldn’t

We all love spreadsheets, right? They’re great for manipulating and analyzing your business’s data on Key Performance Indicators (KPIs). That’s probably why Excel has over 750 million users worldwide, which is more than 10% of the world’s entire population. However, there is an issue with spreadsheets when it comes to communicating data within a business.

Let's start by clarifying what we mean by "data communication", as it can mean many things to different people. When we talk about data communication, we mean communication of your business’s most important performance metrics to the entire team. Why is this important, you ask? Well, we partnered with Censuswide recently to survey 2000 employees in the UK and US on the impact of data communication and found:

• Over 80% want their bosses to share more business performance information
• 25% of employees have, or know someone who has, left a business because they were flying blind to company performance and direction
• Over 50% said that company performance information being shared had a significant positive impact on their contribution to company performance

The research also found that more than 1 in 5 businesses currently communicate data using spreadsheets. Now that we know that communicating data to employees in a digestible manner helps improve the performance of your business, and that over 20% of businesses use spreadsheets to do this, what makes spreadsheets so bad for communication? Here are the four major reasons why spreadsheets aren’t the tool for communicating data about business performance:

1. Your team can’t identify the most important metrics in the maze of numbers.

Spreadsheets are filled with numbers. Lots of numbers. However, it’s also a big part of the reason why they suck when it comes to data communication.

Sending your team into a spreadsheet filled with numbers is like letting them walk into a data-filled minefield. This leads to two issues. Firstly, it makes it hard for your team to identify the impact of their work on movements in KPIs for the business. Secondly, the data volume can easily lead to misinterpretation and ultimately your team taking incorrect actions based on that misinterpretation.

2. You might use 3D charts or visualizations which lead to misinterpretation.

Ben Shneiderman, an American computer scientist, said:

"The purpose of visualization is insight, not pictures."

However, many people ignore this great advice when using spreadsheets for data visualization. For example, compare this:

To this:

Although 3D charts may seem more attractive, your team will misinterpret data and make incorrect decisions when using them.

3. Only you, or a select group have access to it.

The problem with spreadsheets is that they aren’t eminently shareable. This is improving with tools like Dropbox, Google Drive and OneDrive, but for many businesses, spreadsheets are still locked away on the computers of management teams. Many high growth companies, such as Buffer and Shopify, are moving towards a transparent culture where employees can see everything.

In a study entitled "Trust that Binds: The Impact of Collective Felt Trust on Organizational Performance", research indicated that employees who feel trusted by their organization are more likely to accept responsibility for their organization’s performance.

4. Best case, you might email it out once a week.

Of the employees surveyed, nearly half had company performance data communicated to them via email. Given that there are 108.7 billion business emails sent daily, communicating data through spreadsheets via email is far from ideal due to the sheer volume and noise diluting the important data. To build a data-driven culture, it’s crucial to present data in a way that encourages discussion.

In Summary

Stop communicating data to your team using spreadsheets and email! Focus on communicating data in the following ways:

• Make the key data points easily identifiable.
• Visualize the data in ways that reduce the potential for misinterpretation.
• Visualize data in a way that’s actionable and indicative of performance.
• Make data available to everybody.
• Encourage conversation about the data to build a data-driven culture.