Ancient Greece’s Aristotle was able to provide strong empirical evidence of a spherical Earth. Yes, that’s more than 300 years before we started using our current calendar! But what’s fascinating is that the legacy of modeling Earth as a flat disk can be felt today, and “flat Earthers” are still more than a comical reference.
Fast-forward to today, like the abundant flat-earthers of the early ages; we’re still modeling most of our processes as formulas suitable for paper and abacus calculations. Given the abundance of data and availability of computer power, we look like laggers trying to understand the world through simplified approximations and linear trendlines. What’s most dangerous is that we’re still teaching the younger generations to use these primitive models to run a business.
For example, the company has a sales department of 10 employees. You multiply that number by 12 and by salary, and you get an annual sales department budget. How much insight can you get from this formula? How many decisions can you make?, you will have a table for each employee with all associated parameters such as salary, KPIs, past performance, contract terms, and location, etc. The financial model works with this table and generates.