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Saying what you mean - (Warning: Graphic Content) - Aug 12, 2009

Posted by: David Kirkup in Articles

Ever been in one of those presentations where a high-priced consultant or an IT vendor queues up a 38 slide PowerPoint “deck”? Up pops the first slide massively populated with 3 D bars and lines, with maybe some pie-charts as well. Then the consultant says “What this chart shows…” Isn’t the point of a graphic to take the place of a thousand words? This is what happens when you hire Big School MBAs to prepare PowerPoint presentations.

As a high-value CFO consultant, I am not just a “numbers guy”…rather, I see myself as an “Actionable Business Intelligence” guy. It’s my job to reveal the logic and truth behind the numbers. Running a business is so much easier when you strip away the clutter and can see exactly what the trends and benchmarks and indicators are telling you. In a previous blog WaterBoarding – Why Information Extraction Can be Torture, I discussed dashboards as a management tool. Today I am focusing on some surprising dos and don’ts for presenting information – which should help whether you are presenting to a customer, key vendor, your banker or a prospective investor.

An authority on the subject of Visual Business Intelligence is Stephen Few whose web site Perceptual Edge has a great section on the good and bad ways to present business information. First here are some challenges to your conventional wisdom about PowerPoint graphics.

· Three Dimensional charts are never a good idea. They add clutter, hide the key numbers and disguise your message. Ditto – all kinds of clever color graduations. Some major companies produce clever looking PPTs that obscure the message and look like a 5^th graders attempt to use every font and every color in one document. This was news to me…but I learn fast.

· Pie Charts should never be used if you are serious about your message…and who isn’t? Bar Charts will invariably show the same data with more clarity. Pie Charts are inherently difficult for humans to evaluate - our 2D perception is flawed.

· Line charts are used to show seasonal trend data. Bar charts are used to show single point comparatives. Obvious? Maybe…but lots of PPTs break this rule.

· Resist the temptation to render the background color in anything but white. It always takes away from your message by reducing the contrast between the data and the background.

· Avoid bright colors – except for the data you are highlighting. Bright colors are hard to look at and will fatigue your audience

Here’s one interesting example from Perceptual Edge. I encourage you to look at them all as they are so instructive.

J.P. Morgan - This is a classic case of trying to be too clever (and trusting the Harvard MBAs with a box of crayons.) You can study the graphic for ten minutes and still not figure it out. It’s supposed to show the relative decline in market value for major banks over the 2 year banking crisis period. As Few says, “Visual perception in humans has not evolved to support the comparison of 2-D areas, except as rough approximations that are far from accurate.” In other words – it’s a bad graph. You were also supposed to draw the conclusion that JP Morgan suffered the lowest decline, and presumably draw the inference that these are Masters of the Universe that can be trusted.

Let’s take a look at what was done to make more sense of this.

By using simple bar charts, sorting the data by size, adding a second bar to measure the value of the change, and then highlighting JP Morgan - now the message is revealed - such as it is. “We only lost 45% of our market value”. Impressive!

I have to show this graphic by Charley Kyd of ExcelUser.com. Charley demontrates an interesting way to present information as “performance in context”. The graphic shows the performance of the Dow and the Unemployment Rate against the background of who was controlling Congress over the years.

There is a curious consistency to the information. I will leave the readers to draw their conclusions…since I don’t need to say “This graph shows…” BTW: my 12 year old thought it showed that the Dems do all the work and the Reps take all the credit…but what does he know? This graph would be equally effective for mapping company sales against advertising campaigns, or cost indices against.

{Faithful readers of my blog will notice that my Blog titles invariably have little to do with the actual content. This is deliberate…how else can I get you to read about financial stuff? I will be following my stats closely on his one and let you know how we do.}

Update: Well, everyone appears to be interested in "Graphic Content". Hits are running 4 times my regular rate. Thanks, readers...all four of you.