Data visualization sounds fancy, but it basically means charts and graphs. Consultants are good at quickly breaking down problems and telling stories with data. Graphs can be succinct: yes, “a picture tells a thousand words.”
Lots of research has been done on this topic and certainly best practices exist. Anything by Nancy Duarte, or Say it with Charts, Gene Zelazny (affiliate link) is a great place to start, but I have something even simpler.
Practice looking at lots of graphs and find things that you like, don’t like. In other words, try the food. See what tastes right to you; develop your own point of view. Some examples from the Economist and Wall Street Journal:
1. Keep it simple
- The biggest error with data visualization is clutter; trying to do too much
- Often, the best idea is to make two separate graphs, like below
- Here oil and natural gas prices trends are different enough to warrant two different graphs
- Oil-and-Gas Industry Faces a Slow Recovery From Pandemic Lows, WSJ, 1/17/2021
2. Show a trend, not a data point
- If you have enough data, show the trend, it puts your arguments in context
- SPAC, new ways to raise funds (blank check companies) boomed in 2020 at $82B
- Yes, $82B is a lot of money . . .especially compared to $13B in 2019
- Startups Going Public Via SPACs Face Fewer Limits on Promoting Stock, WSJ, 1/3/2021
3. Tell a story
- This is the meta-advice for anything business + visual
- Sometimes, it involves the relationships between two different factors
- Over the last 2 years, US car sales were steady, while inventory has dropped significantly
- Why You Might Have Trouble Getting the Refrigerator, Can of Paint or Car You Want, WSJ, 10/25/2020
4. Be consistent
- Yes, data and charts can lie and mislead. So, definitely use the same scale when comparing data
- Clearly Wikipedia’s future growth is in non-English languages
- Hindi looks like it is almost zero because it is on the same scale as English
- Also, be able to explain potential outliers. . .like. . . . Cebuano?
- Apparently, Cebuano is the #2 most spoken language in the Philippines with 20M speakers. Alarmingly 90%+ of the articles were written by bots. This is not an auspicious sign for the quality of all Wikipedia articles.
- Wikipedia’s future lies in poorer countries, Economist, 1/9/2021
5. Make the point obvious
- This is something we don’t do enough. Get to the point and make it obvious
- This graph is a little busy, but Ireland is clearly the main point (highest peak, bolded name)
- Ireland has a rocket-launch spike in Covid-19 cases. Upon reading the article, it looks like Ireland relaxed social distancing restrictions to give people a “meaningful Christmas”. uh, not really
- Ireland has one of the world’s highest covid-19 infection rates, Economist,1/15/2021
6. Use colors deliberately
- It’s an amateur move to use more colors, for no reason
- Here you can see that gas stations make great margin on everything except gas
- Great margin products = orange, gas = grey
- Groceries Prove a Pandemic Bright Spot for BP and Shell, Economist, 1/16/2021
7. Say something
- Every slide or data visualization should say something
- If the graph doesn’t answer the question, “So What?” better to throw it away, or put in appendix
- The US government spending bills keep getting wordier; the 2020 final version was 2,000+ pages
- Apparently, it’s unreadable in the time allotted before voting. One senator recently called on both the Republic and Democratic parties to “stop voting for bills they haven’t read”
- So what? 1) broken, spastic legislative process 2) perfect environment to sneak in “your appropriations”
- America’s elephantine spending bills are becoming increasingly unreadable, Economist,12/29/2020
8. Annotate as needed
- Don’t make a mess by adding data labels everywhere, but clarify key data points
- The CAPE ratio (market-wide P/E multiple) is not as inflated as the 1929 and 2001 crashes
- Also, labeling the average with a red dotted line makes sense, even though it looks like it doesn’t apply anymore . . .
- Expensive stocks do not necessarily mean a crash is close, Economist, 12/4/2020
9. Use maps
- Maps are easy. For example, Americans know where Texas is located
- The US electoral college is the strange system that allocates votes in a “winner-take-all” by state
- So, if you vote Democratic in very Republican state, your vote is essentially useless
- Therefore, voters in “swing states” like PA, FL, MI, WI, AZ, GA have a big marginal impact
- In this graph, the darker color = more likely that your individual vote would decide an election
- How America’s electoral college favours white voters, Economist, 08/15/2021
10. Add trend lines
- Best case = graph speaks for itself. However, it’s okay to nudge the audience and direct their attention
- Yes, lead the witness. No, do not mislead the witness
- When your sample size is big enough, add trend lines to show correlations
- When looking at GDP/person, the wealthier countries tend to believe in science and doctors
- In contrast, the wealthier the country, the less likely you believe in vaccines. Fascinating and disturbing
- Conspiracy theories about covid-19 vaccines may prevent herd immunity, Economist, 8/29/2020
11. Delineate history from forecast
- Caveat: data can mislead (think: Mark Twain quote, “lies, damn lies, and statistics”)
- When you’re showing a forecast, don’t forget to label it differently
- Here the years 2020-2024 are a forecast; noted below and in a lighter color blue
- Covid-19’s Blow to Business Travel Is Expected to Last for Years, WSJ, 1/17/2021
12. Show the data in multiple ways
- Yes, there are many different ways to analyze the same set of data
- While you don’t want to bore the reader, sometimes those different “cuts” are useful to see
- Polyethylene (plastic) demand varied by sector and by region
- Lots of plastic demand in healthcare and packaging (makes sense) in 2020; in 2021, demand growth will be in Asia
- Firms Like Dow Bet Billions on Plastics. Now There’s a Glut, WSJ, 10/15/2020
13. Label the graph well
- If you are showing data that requires a little explanation, make a graph title
- The Chinese economy has made remarkable gains over the last 20 years. Looks like China is the top merchandise trading partner with 64 countries, while the US is the #1 speed-dial position for only 38 countries
- How to deal with China, Economist, 1/9/2021
14. Use two graphs, not one
- There is nothing wrong with making multiple graphs and putting them next to each other
- See this side-by-side comparison of managed money; active going down, passive going up
- Apparently, there is $100 trillion in managed assets with increasing consolidation by the big names
- The money doctors, Economist, 11/12/2020
15. If you must have two axes, label them clearly
- Generally, I am not a fan of double axes because it has the potential to confuse the reader
- If you’re going to show two different things, label them in different color; red vs. blue
- Good job China; bringing 800M+ people out of extreme poverty
- Extreme poverty is history in China, officials say, Economist, 1/2/2021
16. Careful how you “bucket” the data
- Consulting is all about putting things into buckets
- Here assets under management (AUM) is categorized by region, with the exception of Japan
- Question: Why is Japan grouped with Australia and not Asia?
- The Shanghai Open, Economist, 11/12/2020
17. Pair up charts
- As a consultant, nothing is better that proactively answering a client’s question before they get a chance to ask
- The first graph is of IPO proceeds raised by Chinese companies; 2020 was the highest at $110B+
- The second graph answers the question of how many US listings (ADR) over the same time period
- Why Chinese firms still flock to American stock exchanges, 10/17/2021
18. Don’t use pie charts
- I remember when a senior manager once told me that pie charts weren’t that useful
- Now, I completely agree now. . .trend lines are WAY better because they provide context
- See market share of beverage over time; what’s up Pepsi?
- How Donald Kendall, as PepsiCo’s boss, sparked the cola wars, 09/26/2020
19. Surprise the reader
- Be creative with your data sets and comparison
- The Midwest United States is a vibrant (often overlooked) part of the economy
- Comparing it to countries (i.e., Japan, Germany) helps to deliver the message
- The best-run cities of America’s Midwest offer lessons in recovery, 7/25/2020
20. Put things in the appendix
- This is a timeline of Google, which is an eyeful. Probably deserves to be in the appendix, not the main presentation
- It doesn’t convincingly answer the question “So What?”
- Google’s problems are bigger than just the antitrust case, Economist, 7/30/2020
21. Sometimes a table is better
- A mentor of mine always says that tables are underrated. I agree completely
- If you are showing a bunch of numbers (see the graphic below of 32 numbers), why not just put it in a table
- Also, I had no idea that Thailand has so many billionaires
- South-East Asian tycoons’ high-wire act, Economist, 5/8/2020
