Strategic Advisory Services Training
Session I
Using Charts & Graphs
February 21, 1997
Contents
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chart selection.ppt
•
Chart Types and Selection
•
Four Myths and Lessons Learned
•
Exercise: “Good Graph” and “Bad Graph”
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Chart Types & Selection
Selection of Appropriate Graph Is A Function of
Message, Comparison Type, and Graph Form
Message
• Identify the
specific point you
want to make
• Should be clear
and distinct
Comparison
• Message selected
implies one of five
types of
comparison
– Component
– Item
– Time series
– Frequency
distribution
– Correlation
Graph Form
• Select the graph
to best depict the
comparison you
are trying to make
• There are several
alternative chart
forms
Source: Adapted from Gene Zelazny, Say It With Charts: The Executive's Guide to Successful Presentations (Homewood, Illinois: Dow Jones-Irwin, 1985)
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Chart Types & Selection
Data Can Have Numerous Messages
Message Should Provide Evidence For Storyline
Message
Comparison
 Client leads company A in the South
by a wide margin but clearly lags in
the North; Very competitive in East
and West territory
Market Share Data on Client and
Company A in the U.S. (1996)
Client
Select One
Company A
North
39%
South
East
West
Share
13%
35
27
25
% New Products
Share
5%
50
25
20
Graph Form
Message
 There is a high correlation between
client’s market share and % of new
products launched in an area
6
27
28
 Majority of client’s revenue share
comes from the South
Source: Adapted from Gene Zelazny, Say It With Charts: The Executive's Guide to Successful Presentations (Homewood, Illinois: Dow Jones-Irwin, 1985)
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Chart Types & Selection
Message Has A Selection Amongst Five Comparison
Types
Message
Comparison
Graph Form
Comparison Type
Definition
Example(s)
Component
Shows relative importance of a
component to whole
Highlight importance of a region or
product sales out of total sales
Item
Shows ranking of items; compares
size/quantities of two or more items to
each other
Comparisons of cost structure,
sales, profits for two or more
companies
Time Series
Shows trends, fluctuations, or patterns of
change in value or quantity over time
Stock price movements, sales or
profit trends
Frequency
Distribution
Shows the distribution of an item among
various categories of sorted size or rank
Employee salary groupings based
on age, experience, etc.
Correlation
Shows how changes in one variable
correlates to changes in another variable
Regression analysis linking
company sales to product launches
Source: Adapted from Gene Zelazny, Say It With Charts: The Executive's Guide to Successful Presentations (Homewood, Illinois: Dow Jones-Irwin, 1985)
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Chart Types & Selection
Desired Message Determines The Comparison Type
Message
Comparison
Graph Form
Message
Desired Outcome
Alternative(s)
Comments
Client leads
company A in the
South by a wide
margin but clearly
lags in the North;
Very competitive in
East and West
territory
Compare sales
performance of client
with another
company by
highlighting sales
data in different
regions
Component
Yes, but may need two component
graphs (for two companies) and call out
boxes/text to compare sales data
Item
Best choice because allows comparison
of specific item (sales data) for two
companies data in one graph
Time Series
No, because message data does not
have a time series comparison in it
Frequency
Distribution
No, because message does not have a
distribution comparison in it
Correlation
No, because message is not relating
change between two variables
Source: Adapted from Gene Zelazny, Say It With Charts: The Executive's Guide to Successful Presentations (Homewood, Illinois: Dow Jones-Irwin, 1985)
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Chart Types & Selection
Comparison Type Drives Selection of Graph Form
Message
Comparison
Graph Form
Message
Comparison Type
Selected
Graph Form
Alternatives
Comments
Client leads company A in the
South by a wide margin but
clearly lags in the North; Very
competitive in East and West
territory
Item
Bar
Bar is a better choice
than column chart:
Column
• More clarity in axes
labeling by putting
company and region
names on y-axis
instead of crowding
x-axis
• Avoids confusion with
a time series graph
where time is put on
x-axis
Source: Adapted from Gene Zelazny, Say It With Charts: The Executive's Guide to Successful Presentations (Homewood Illinois: Dow Jones-Irwin, 1985)
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Chart Types & Selection
Graph Form Selected Is A Bar Chart
Message
Comparison
Graph Form
Client leads company A in the South by a wide margin but clearly lags in the North
Heavy competition in East and West territory
South
Client
Co. A
North
Client
Co. A
West
Client
Co. A
East
Client
Co. A
0
10
20
30
40
% U.S. Market Share 1996
Source: Adapted from Gene Zelazny, Say It With Charts: The Executive's Guide to Successful Presentations (Homewood Illinois: Dow Jones-Irwin, 1985)
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Chart Types & Selection
For a Given Comparison Type, The Graph Forms Are
Limited
Comparison Type
Component
Item
Time Series
Frequency
Correlation
***
Line
Pie
Basic
Graph
Forms
*
**
Bar
• • •
•• • •
• •• •
•
Dot
* Could also be horizontal bar charts
** Could also be step charts
*** Could also be a surface graph
Source: Adapted from Gene Zelazny, Say It With Charts: The Executive's Guide to Successful Presentations (Homewood Illinois: Dow Jones-Irwin, 1985)
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Chart Types & Selection
Once a Graph is Selected, There are Several
Presentation Alternatives
Graph Slide Types
Graphs
Pie
Line
Surface/Area
Curve
Single
Bar*
Multiple
Dot
••
• ••• •••
• •
Stacked
Waterfall
Step
100%
Sliding
* May be horizontal or vertical bars
Source: Adapted from Gene Zelazny, Say It With Charts: The Executive's Guide to Successful Presentations (Homewood, Illinois: Dow Jones-Irwin, 1985)
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Contents
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chart selection.ppt
•
Chart Types and Selection
•
Four Myths and Lessons Learned
•
Exercise: “Good Graph” and “Bad Graph”
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Four Myths & Lessons Learned
Myth #1: A Picture is Always Better Than Data
Caution: Data May Be Too Simplistic For a Chart
Pie chart was used when a table showing data would
have been clearer
Results of Recent Opinion Poll of 16 Top Management
executives
Lessons Learned...
• There are some situations where
presentation may be better off without a
chart:
- Data is straightforward and comes
out more boldly if left alone
“Should the political and social climate of
developing countries influence our decision to
expand into these markets?”
- Data when plotted highlights some
point that may mislead the
presentation storyline
Percentage of Total: 100% = 16
• Data such as P&L statement may be
more appealing in a tabular format
Undecided
15%
50%
Yes
35%
No
Source: Management Association Survey, 1996
Source: Adapted from Gene Zelazny, Say It With Charts: The Executive's Guide to Successful Presentations (Homewood, Illinois: Dow Jones-Irwin, 1985)
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Four Myths & Lessons Learned
Myth #2: More Graphs Means More Analysis
Caution: Audience May Lose Focus With More Graphs
Six column graphs were drawn when only one
stacked column graph could suffice
Lessons Learned...
• With charts, a good rule is “fewer is
better”
Banking Industry
3000
2500
2000
$ Million 1500
1000
500
0
• In lot of instances, quality is better than
quantity
1995
1997
2000
Retail Industry
1600
1400
1200
1000
$Million
800
600
400
200
0
1995
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1997
Total 6 column
graphs drawn
for 6 different
industry
groups to
show growth in
market sizes
for three years
1995, 1997,
and 2000
• Making the storyline and graphs more
compact helps in delivering a more
powerful overall message
2000
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Four Myths & Lessons Learned
Myth #3: A Good Graph Speaks For Itself
Caution: Good Insights May Be Lost If Not Highlighted
Call out boxes were not used initially; as a result
insights were lost despite of good analysis
450
Campbell
• Graphs are just visual aids; they need
to be reinforced to highlight key data
and insights
• Sometimes putting a text box next to a
graph on the same slide helps
summarize key findings from that
graphical analysis
400
350
300
%
Comparative
Returns
Lessons Learned...
S&P 500
250
200
150
100
50
0
-50
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
Year
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Four Myths & Lessons Learned
Myth #4: A Well Thought Out Graph Always Finds Data
Caution: Keep Time As Constraint When Finding Data
Graph looked good and added great value to
storyline; however, data could not be found in time
??
% Market Share
100
$3.5B
??
$ 1.7 B
$ 8.8 B
80
Lessons Learned...
• Reassess data requirements within
stipulated project time frames before
putting a graph into a storyline
• Have a backup graph/text slide ready in
case the original graph does not come
through
60
40
20
0
HMOs
Other
Health
Care
Cos.
Health
Clinics
and
Institutes
Exercise
Equip
Manuf.
Fitness
Clubs
This graph depicts value chain for consumer wellness industry.
Graph remained incomplete because relevant data could not be
found in the given time frame:
- Market size of each segment of the value chain
- Key players and their market shares in each segment
- Key acquisitions and mergers across segments over 10 years
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Four Myths & Lessons Learned
To Summarize, Charts Are Only A Form of Visual Aid
Not a Substitute For Writing Or Saying What You Mean
Normal Pitfalls (Myths)
Key Lessons Learned
A picture is always better than data
There are some situations where presentation
may be better off without a graph
Fewer is better; Quality is better than quantity
More graphs mean more analysis
Graphs are just visual aids; they need to be
reinforced to highlight key data and insights
A good graph speaks for itself
Reassess data requirements within stipulated
project time frames before putting a graph
into a storyline
A well thought out graph always finds data
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Four Myths & Lessons Learned
There Are Several Presentation Guidelines Graphs
Should Follow
•
Axis labels should all be horizontal to enable easy reading
•
Zeros should be omitted from axis scales and legends
•
No more than one decimal point of detail should be presented in graphs
•
Colors (or darker shading) can be used to emphasize points of interest and
increase the effectiveness of the graphic selected (the same color or shading
should be used for each company throughout the presentation)
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Contents
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chart selection.ppt
•
Chart Types and Selection
•
Four Myths and Lessons Learned
•
Exercise: “Good Graph” and “Bad Graph”
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Exercise: Good Graph & Bad Graph
Graph #1: What is Wrong With This Picture?
Hypothesis: Consumers spent more on cellular phone services as compared to local and long
distance services in year 1995
600
500
Online
Info Sys H/W
Paging
Newspaper
Cable
Long Distance
Entertainment H/W
Local
Cellular
Consumer 400
Annual
Spending 300
1995
Dollars
200
100
0
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Graph #1: Improvement Opportunities
•
Message of graph is unclear
– Too much data is presented
– 3-D graph is inappropriate, confuses the message
•
Legend is unclear, possibly unnecessary
– Graph segments not clearly defined
– Legend may be unnecessary
•
Axis labels are unclear
– Dollar values not detailed (per month or per year)
•
No source is given for information
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Exercise: Good Graph & Bad Graph
Graph #1: Use a Bar Chart For Item Comparison
Hypothesis: Consumers spent more on cellular phone services as compared to local and long
distance services in year 1995
Labels fit in nicely
on a bar chart yaxis than on a
legend or x-axis
for a column
chart
Data that matters
the most can be
shown
prominently at
eye-level (on
top)
Cellular
Local
Entertain. H/W
Long Distance
Cable
Newspaper
Paging
2-D lines
represent data
clearly than 3-D
lines
Info. Sys H/W
Online
0
100
200
300
400
500
600
Average $ Spent by a Consumer in 1996
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Exercise: Good Graph & Bad Graph
Graph #2: What is Wrong With This Picture?
Hypothesis: Client will experience low profit margins due to intense competition and competitive
pricing to be a market share leader in a high growth telecom segment
Market Entry Model for a New Product in Telecom Industry
4000
3000
20%
15%
2000
Percentage
$ millions
30%
10%
1000
5%
0
0%
1
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3
4
Year (Starting 1997)
5
22
Total Market Size
Segment Size
Projected Market Share
Projected Profit Margins
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Graph #2: Improvement Opportunities
•
Too many messages were attempted
– Double axis, double legends was inappropriate
– Too much data is included
•
Legend is unclear
– Market segments are unclear
•
Axis labels are unclear
– Vertical axis labels are unclear
•
No source is given for information
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Exercise: Good Graph & Bad Graph
Graph #2: Chart Too Complex To Draw Clear Insights
Analysis Can Be Broken Into Two Separate Graphs
Hypothesis: Client will experience low profit margins due to intense competition and competitive
pricing to be a market share leader in a high growth telecom segment
However, Company A will have to bear low
profit margins over next five years to gain
market share leadership
Product XXX is in a high growth market segment
Total Market
5 Yr CAGR
36%
5
$B
25
Market Share
4
20
3
15
Segment
5 Yr CAGR
73%
2
%
10
Profit Margins
1
5
0
1
2
3
4
0
5
chart selection.ppt
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3
4
5
Year (Starting 1997)
Year (Starting 1997)
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Exercise: Good Graph & Bad Graph
Graph #3: What is Wrong With This Picture?
Hypothesis: Americas region will dominate total world wine production over next 5 years while
France will gradually loose its dominance
World Wine Bottle Production by Region
1998
1995
2000
10%
13%
28%
30%
42%
49%
41%
45%
42%
Americas and ROW
Europe
Source: Winery Newsletter, 1996
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France
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Exercise: Good Graph & Bad Graph
Graph #3: Column Stacked Charts Better For
Displaying Time Series
Hypothesis: Americas region will dominate total world wine production over next 5 years while
France will gradually loose its dominance
100
CAGR
1995-2000
80
%
Total World
Wine
Production
Americas
10%
Europe
-
France
(19%)
60
40
20
0
1995
1998
2000
Year
Source: Winery Newsletter, 1996
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Exercise: Good Graph & Bad Graph
Graph #4: What is Wrong With This Picture?
Hypothesis: Client should initially target Meal Supplements segment and strengthen its competitive
position in Wellness Center area through a strategic alliance
6
Market Attractiveness
Competitive Position
5
4
Score
Rating
1-5
3
2
1
0
Revenue
Potential
$ Million
Natural
Foods
133
Meal
Supplements
Targeted
Nutrition
Weight
Loss
Wellness
Center
49
215
17,000
122
(Steady State)
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Exercise: Good Graph & Bad Graph
Graph #4: Matrix Chart Brings Out Clarity and More
Succinct Graphical Representation
Hypothesis: Client should initially target Meal Supplements segment and strengthen its competitive
position in Wellness Center area through a strategic alliance
High
Natural
Foods
Meal
Supplements
= Revenue Potential
of $100 Million
Targeted
Nutrition
Competitive
Position
Weight
Loss
Dotted circle
represents
approximations in
market size
calculations
Wellness
Center
Low
Low
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Market
Attractiveness
28
High
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END OF DOCUMENT
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