There comes a time in every modeller’s career where they screw something up in a model. Heaven knows, I have had a few and lived to tell the tale. It is the nature of the work that we do, dealing with huge models and hundreds of variables to tight deadlines that inevitably, some mistakes will happen.
You may know the feeling, or probably will at some point. That tensing of the stomach, sinking and slightly sick feeling when you spot it. A base date that’s wrong, something which should have been indexed, which isn’t, a line missing from a sum calculation…….
Here’s what to do.
1. Panic – this will happen. Recognise it and go with it. Give yourself some time to compose yourself. Get some air, grab a drink, get away from your desk for 10 mins.
2. Double and triple check – Make sure that before you go any further, you do genuinely have a problem.
3. Check for materiality – Understand and be ready to explain the materiality of the problem. If the error is not material in relation to the project as a whole, take a sigh of relief.
4. Look for more errors – Where there is one error, there are likely to be more. Take some time for a further review of the model to identify any other issues. If you are having to explain to your client / boss that there is an error in the model, the last thing you want is to be going back days later with another problem.
5. Look again for more errors – A further reason to look for more errors is the averaging principle. It is a happy twist of statistics, but if you find many errors in a model, it is likely that there will be an averaging effect. Some will go in your favour and some will go against you but overall they will tend to counteract each other to a degree.
6. Work out who to tell and tell them – your boss or client will need to know. Where there is a material error in a model on which you have worked, you have to tell someone. The worst thing that you can do is to cover it up and hope it goes away. Errors do have a nasty habit of coming out in the end. If you are lucky, the error will be identified by someone else before any decisions are made based upon the model. This is the best case scenario, but will still leave you looking flaky and incompetent and will not inspire trust. The worst case scenario is that no one spots the error until after the deal is done and real and significant financial losses are incurred. Not good for your career……
7. Learn your lesson – Modelling mistakes happen. It is a fact of life. Making a mistake once is forgivable, making the same mistake again much less so. Work out what went wrong and put measures in place to ensure it does not happen again. Make sure you are following your organisation’s Quality Assurance processes. If you are, and mistakes are still slipping through, then the QA process needs to be reviewed and improved.
8. Move on – Do not dwell on the past. Move on to the next one, battle scarred, older and hopefully wiser.