Both are ways of compressing information into a manageable format. The main difference is that the shrunken manuscript is more visual, while the spreadsheet plotting is text based.
Advantages of Shrunken Manuscripts
Shrunken manuscripts are a visual look at the overall shape of a story. They are particularly good at showing the proportions of a mss that deal with your issues. Because you mark/highlight entire chapters or passages, you can see–at a glance–how much space deals with your issue. Often, it’s not enough just to mention Character X; instead, the reader needs fully developed scenes that take place over extended time in order for X to be memorable. Spreadsheet plotting doesn’t show this as easily; you can include a column on the number of pages, but it’s not visual.
It’s also easy to see multiple issues at a time, by using different color highlighters, or sticky notes. For example, you can check on interactions between X & Y, X & Z, etc. and see if they are spaced where you want and if they last long enough.
Advantages of Spreadsheet Plotting
On the other hand, spreadsheet plotting allows you to check the actual content of scenes/chapters. For this reason, it’s easy to scan a column of plot points and see if the narrative arc builds over the course of these actions. Or, scan the column of emotional points and see how the emotional arc builds. Try sorting columns: as long as you use consistent terminology, you can check, for example, how many times you place scenes in a haunted house.
For me, these complimentary methods of looking at the overall shape of a novel are the most helpful tools.
Here’s Sarah Miller’s look at the Shrunken Manuscript.
If you can’t see the video, click here.