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Data visualization

Waffle charts in presentations

Waffle charts in presentations

I never have been a big fan of waffle charts:

  • I find it harder to read them then straightforward bar or column charts (in a similar way, pie charts are less readable)

  • They are a pain to maintain in PowerPoint/Keynote (counting boxes)

But, what people do to show the results of the US elections is clever. by adding the semi-saturated colours in, you get a nice sense of how things are developing:

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2x2 matrix overload

2x2 matrix overload

This 2x2 chart is hard to understand (source on HBR)

From a design point of view:

  • Axes labels are hard to read

  • Axes labels are too blunt, mathematics has its uses

  • Too many dots at locations that are too precise

  • Typography of the labels goes across the boxes

  • The 4 quadrant labels do not stick out enough

And that’s the design part. More importantly, the content… The title of the chart seems to suggest that it is just an example of how to use 2x2 matrices, but I think people are serious about its content. A comparison of apples and oranges. I need to start casually learn how to do data cleaning, and not yet get into AI but be prepared for it, and to use AI, I don’t need to understand statistics at all.

Cover image by Nick Femerling on Unsplash

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Logarithmic scales

Logarithmic scales

In the 1980s, I remember plotting the results of science experiments in high school on millimeter paper. Logarithmic scales came in handy: they allow you to plot data series with big variabilities accurately, and/or they can show mathematical relationships beautifully (a completely straight line on a logarithmic scale for example).

Scientific charts are for pondering at your desktop, a different setting from a 20 minute all or nothing investment pitch. When you show a boring growth line and have to alert the audience that the tiny labels on your y axis are in fact on a logarithmic scale, you have lost some of your fire power. It looks less spectacular, and more importantly, it requires additional thought steps in the brains of your audience. The hockey stick simply works better.

If you are dealing with serious science, consider 2 charts right after each other, the first (populist) one showing the raw growth, then followed by a logarithmic one that takes the responsible scientific approach.

Cover image by Sawyer Bengtson on Unsplash

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Mary Meeker slide makeover

Mary Meeker slide makeover

Mary Meeker published her 2018 Internet Report: hundreds of PowerPoint slides filled with dense information. This is a presentation for pondering and study, rather than seeing it as a backdrop for an entertaining TED talk. For this purpose, the slides look pretty decent. I picked a random slide from the beginning of the deck and tried to improve things a bit in "SlideMagic-style"

Mary Meeker original slide.png

Here are some things I changed:

  • The KPCB template features the very heavy coloured bar at the top of the page, I took it out, and tried to apply the fresher green colour that was used for the branding of the web site of the document
  • The duplications of the titles were eliminated
  • The vertical chart axis and grid lines are not required, I took them out
  • I edited the title to make it shorter, put the growth point in the title, the absolute hour value as a bubble
  • The columns don't add up because of rounding, I left it that way, but usually, I would change the value of the biggest column segment to make the numbers add up, it somehow looks sloppy when there are "calculation errors"
  • The legend was hard to read and difficult to link to the data series, I moved them to the right
  • I made the mobile data series pop more with stronger colouring
  • I stretched the data chart a bit horizontally to use the maximum possible space

A complete purist would argue that this chart is actually the wrong one to support the 4% growth point, there are no growth percentages anywhere on the chart.

I put up the above slide on the SlideMagic template store, anyone can download this one free of charge.

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Quantification as a communication tool

Quantification as a communication tool

The backbone of almost any management consulting project (and final presentation) is some sort of quantification of options. In essence, the quantification is the communication.

Strategic options can be hard to compare, evaluate. Uncertainty, risk, lack of information, dependencies, short term, versus long term. Throw these in an average politically charged management meeting and the outcome is almost certain: indecision.

A quantification is convenient: simple rank the "score" and the answer rolls out. Every option can be compared objectively. Well, objectively to a certain extend. With all the wild assumptions and predictions, you can pretty much force an Excel model to go anywhere.

But that might actually be useful. The process of debating assumptions, seeing how much they actually matter, which ones are certain, which ones are a bit uncertain, and which ones are wildly speculative, weighing all the factors, is the communication process a consulting team and client will go through. At the end, the point estimate of "Option 3 wins with $52.3b value creation in 2035" might not be correct, but the thought process that went into the estimate means that option 3 is probably the most sensible option to take.

Why do people need to hire expensive consultants to lead them through this process?

  • Some sort of objectivity, an outside party who has the run the numbers with a credibility at stake
  • Raw horse power: knowledge how to run complex calculations involving risk and options (and an infinite supply of available human capacity in a certain time span)
  • Privileged access to information: data from another country, disguised industry benchmarks, etc.
  • And the guts to make broad "20% of the effort, 80% of the result" assumptions where it is appropriate

The analyst in the basement sees an endless stream of modifications of assumptions in the spreadsheet, but the client is getting the decision she wants.

Presenting the results of such a project can be tricky. The slides themselves can be super simple (a ranking of 5 options by value created in 2035), but the sequence how to take people through is complicated. Discussing your Excel sheet page by page is not going to cut it. 


Cover image by Tobias Fischer on Unsplash

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Halving and doubling

Halving and doubling

This tweet made me scratch my head, it seems so counter intuitive:

If you create a little waterfall, you can see the effect better. In both cases, the delta is half the size of the bigger column.

Waterfall.png

Yes, using logarithmic scales would be the correct mathematically thing to do, but they are very hard for people other than mathematicians to get their head around. 

Read an earlier blog post about constructing waterfall charts in presentations. Cover image by Ross Findon on Unsplash

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Years in columns, which way?

Years in columns, which way?

In financial statements, the most recent financial period is put first, and next to it is the previous period for comparison: 2017 - 2016. To the frustration of some accountants and CFOs, I insist on putting the years the other way around: 2016 - 2017.

  • The eye is used to moving left to right when looking at time series data
  • It makes tables match line or column graphs that are in the presentation
  • It makes it easer to compare data across 3 years or more

I am not trying to change the reporting practices for financial statements. In the annual accounts, the current year is the most important one. It needs to be accurate and is usually shown with far more digits (precision) than I would use in a presentation. A comparison to last year's numbers is almost an extra, not the main purpose of the page.

Every financial document has its own purpose and own audience: spreadsheets, financial statements and presentation decks. And among presentation decks you can distinguish between quick and dirty documents to discuss (early results), detailed financial information for the investor community, and more generic financial slides for a general company presentation. Different purpose, different slides.

If you want you can check out financial slides in PowerPoint in my template store. Subscribers can download them free of charge.

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Trees!

Trees!

A tree visualises the composition (or decomposition) of a number into a number of factors. They are what I call ponder charts, not to be presented during a TED talk, but rather they are useful for  (complex) studying relationships between different factors.

Below are two examples of these analysis trees. The first is a summary profit and loss account for a company. I often use these a tree like this to visualise the business model of a startup by forcing a forecast year 5 P&L of a success scenario into this format. It is impossible to forecast the future accurately, and investors and founders will always disagree on the numbers, but the tree teaches you how to think about this company. What drives its economics? What would you have to believe for the year 5 scenario to be true? A tree always has to add up and multiply, this often leads to insights when it forces you to fill in boxes that you did not originally take into account (i.e., you forecast your sales, you assume market size, and right in the middle sits your implied market share).

A second example is this return on invested capital tree. It explains how (and more importantly, why) company performance is changing over the years. In this version I added miniature line diagrams to make the annual trends clearer. PowerPoint cuts the vertical axes of these graphs automatically, amplifying the trends in the line graph. Normally, I would object to this form of lying with statistics, but in this case with the very small diagrams, it is actually useful.

Both these trees go from left to right, sticking to the McKinsey style of going from big picture to detail. 

Clicking the images takes you to store where you can download the finished slides, subscribers can do so free of charge.

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Sensitivity analysis in PowerPoint

Sensitivity analysis in PowerPoint

Today, I am adding a simple table to the store to show the sensitivity of an analysis. Each cell in the table shows an outcome of an analysis with a slight variation on 2 critical input variables. I used this type of a slide a lot in discounted cash flow valuation models, where assumptions about discount rates and assumed perpetual growth could make a significant impact on the outcome of your analysis.

The base case scenario is put very prominently in the centre of the table, it is the anchor for the viewer from which to start studying the other scenarios. I prefer making these type of charts manually, and not via a blanket copy-paste out of an Excel sheet. In that way, you have to think about whether each cell in the table is meaningful, and you can make sure that the data is formatted and rounded in the best way.

You can download this sensitivity analysis from the store, subscribers can do so free of charge.


Cover image by Markus Spiske on Unsplash

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Balance sheet in PowerPoint

Balance sheet in PowerPoint

Today, I added 2 slides that show a balance sheet to the template store.

The first is a traditional table format. But this PowerPoint version is a bit different from the a typical balance sheet in an annual report to improve the readability. Usually, the PowerPoint presentation with the financials is not the legally binding one, so we can omit some details that clutter up the page. This table has fewer lines (consolidating multiple entries into one), and the amounts are rounded up.

The second chart is a balance sheet represented as a column chart. Even more details has been taken out and the result is a nice and unusual way to visualise the key balance sheet ratios. Instantly you can see the proportion between current and non-current assets (and liabilities), and you can see the leverage of the company (ratio between debt and equity). This chart is probably easier to follow than the Profit and Loss statement as a column chart which I discussed earlier.

Click on the image to download the slides from the template store. Subscribers can do so at no extra cost.

Cover image by NeONBRAND on Unsplash

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A Pareto chart

A Pareto chart

Recently, someone searched for a Pareto chart on my site. I must admit, I had to consult WikiPedia about this type of slide. A Pareto chart shows 2 data series, each with their own vertical axis; the first show the absolute frequency count of something, the second one the cumulative occurrence of the data series, adding up to hundred for the last entry. I have added the Pareto chart to the store. 

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How to format tables in PowerPoint

How to format tables in PowerPoint

Tables can carry more data than a data chart and as a result can be less effective in a presentation. For some situations though, there is no point trying to avoid using a table in PowerPoint. For example, when investors want to see the quarterly numbers, they expect to see a table.

The way you format tables can make a huge difference in how your chart looks. When done well, a table can actually be an effective presentation slide. Have a look at the simple P&L table below.

 A PowerPoint table to present a P&L

A PowerPoint table to present a P&L

This might look like a super simple slide design (it is), but a lot of thought and little tweaks have gone into its design. Let's take them one by one:

  • Colours have been adjusted to your own colour template, not the standard PowerPoint colours
  • Fonts have been matched to your current template (table can be stubborn sometimes and stick to Arial)
  • Instead of dark lines around boxes, I used lines that match the background colour, making cells a light colour of grey to stand out (or dark, black if you use that background)
  • Totals are bold, and a bit darker
  • The row labels are right aligned
  • The row labels are a bit darker than the cells
  • The data cells are right aligned
  • Numbers are rounded to the same amount of digits, so the dots line up
  • There are not too many digits in the table, enough to convey the data, but not too much to make it cluttered. If the numbers get too big, switch to thousands or millions.
  • There is a bit of inset in each cell, the text does not touch the edges
  • All the rows have the same height
  • All the data columns have the same width
  • The column headings are centered
  • The unit of measure is put at the top of the chart, not repeated inside the data values
  • The table covers the entire frame of the presentation template
  • Double check by hand/calculator: the numbers add up...

Excel can be an excellent starting point for a table. Pull the data values you want to show with the correct rounding into a new worksheet (tables for presenting are different from tables for analysing). Think hard about what rows you want show, consolidating/combining values that do not add to the overall message of your slide. Then copy-paste the whole thing into PowerPoint where it will show up as an ugly table. Go through the steps above to clean things up. Alternatively, you can apply a lot of similar formatting already in Excel, making your spreadsheet tables good enough to put straight on the projector. This is handy when your numbers update frequently.

Feel free to copy the design, or download this table from the template store. You search for more slides with tables as well.

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Quarterly performance summary: lots of different KPIs on a page

Quarterly performance summary: lots of different KPIs on a page

I often use the slide below in quarterly investor presentations for large corporates. How to give a quick overview of the key financials in one chart?

 A chart with an overview of the main financial indicators of the last quarter

A chart with an overview of the main financial indicators of the last quarter

This chart is an example of why often a "manual" chart is much more powerful than a simple copy and paste from Excel:

  • The chart contains values that can differ vastly in range: sales can be 100s of billions of dollars, EPS can be less than a dollar. Margins are percentages, not dollars.
  • Despite this, I forced the Q1 column of each of these values to be the same. In the underlying spreadsheet, they will all say "100". The other values are calculated as a relative value compared to this 100. To accentuate this in the chart, I connected the left columns with a dotted line.
  • As a result, all labels in the chart need to be filled out by hand, the same for the growth bubbles which I placed over the columns (again a bit unusual)

You can download this KPI chart from the template store.

Photo by Sabri Tuzcu on Unsplash

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Presenting survey results

Presenting survey results

Here is a chart I usually use to present the result of a survey.

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How to create a waterfall chart

How to create a waterfall chart

How to create a waterfall chart. Waterfall charts are the secret weapon of McKinsey and other strategy consultants. They are great to explain the source of change between two values (last year, this year for example). In Excel they are tricky to make, especially if values zoom up and down the zero axis.

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P&L as a column chart

P&L as a column chart

When you want to show a P&L with very few lines, consider using a column chart instead of the more traditional data table. In the chart below you can see how to go about it. Use a bold color for the profit series, a light color for the COGS, and manually add the gross profit as bubbles.

Things get a bit trickier for years where there is a loss. You create a separate data series in the same color as the last cost category (opex in this example), and calculate how much of the opex goes under the line and how much above. Tweak data labels manually. For these types of charts it is best to sketch them completely on a piece of paper, and then fiddle with PowerPoint/Excel to get it right.

The column chart works well, it shows a number of trends in 1 slide: sales growth, profit growth, and how fixed/variable certain cost types are.

Below is the data I used to create this chart.

You can recreate your own chart with the description above, or download the example from the SlideMagic template bank.

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Slide make-over: polarising brands

Slide make-over: polarising brands

I am across this chart recently:

Infographic: America's Most Polarizing Brands | Statista You will find more statistics at Statista

This chart can be improved in a number of ways:

  • Actually, take down the brand images, or make the smaller. The different colours and sizes make the chart cluttered
  • It is hard to read what the percentages actually mean
  • The biggest problem is the confusing line up of the data bars
  • The data could be sorted, to create additional structure for the viewer

I replaced the chart with the one below in PowerPoint, using a line graph with big markers instead of the bars.

Screenshot 2017-10-31 09.48.58.png

Ideally, I would have like to flip the chart 90 degrees, but this would require quite a lot of PowerPoint surgery (you can probably do it with a scatter chart somehow). The other option is to construct a highly complicated "waterfall" chart.

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Mixed cluster and stack charts

Mixed cluster and stack charts

On a few occasions, I had to use a combination of a cluster and a stack chart. This chart is not available as a standard option in PowerPoint. Here is how to make it:

  • Create a regular stacked column chart
  • Set the gap width to 0
  • Blank out the data where you want the gap between the years to be
  • Manually add labels for each of the years

You can create one yourself using the above ingredients, or you can download the one I made in the SlideMagic template store:

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Consistency in financials

Consistency in financials

Financial projections of new business ideas are totally made up / not accurate, so being of by a few million here and there would not matter? We can make quick changes in our financials in the presentation slides, and then "forget" about updating our financials spreadsheet with the new information. 

While the absolute numbers of your financial model might be totally pulled out of the hat, it is the thought process of how you got to them that is still valuable for investors. How does your business model work? What would I have to believe in order for your year-5-dream-scenario to come true?

And that model should be consistent across all your documents: presentations, spreadsheets, budgets, everything:

  • Discrepancies make you look sloppy (a little preview of things to come when you need to work together with an investor on a Board)
  • A consistent model of totally made up numbers makes sure that everything is, well, consistent. If you just slashed sales & marketing cost by 50% but maintain the same amount of sales people, something goes wrong.
  • Inconsistencies make it harder to understand your story for an outsider. If sales are $50m on one page and $49m on another people get confused. You established "$50m" as a mental shortcut for year-5-sales-in-the-most-optimistic-scenario, and all of a sudden you create a new shortcut.

So, even if nobody can predict the future accurately. there is still value to create a consistent financial model the same way as you would for a business in which you know every single detail (next year's budget of an established company for example).

What can you do to incorporate the fact that numbers are highly uncertain?

  • Round things up to whole numbers (no $49.569m sales in year 5)
  • Minimise the number of assumptions you put in the model and make cells that are guesses highly visible (I usually mark them bright yellow).  Rather than "guessing" the number of customers for each year, and the number sales people for each year (10 assumptions over 5 years), you could assume a % growth of customers, and a fixed ratio of sales people to customers (2 assumptions).

Slightly more complex models might actually be simpler to understand.

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The unit measure

The unit measure

There are endless ways to show financial ratios and benchmarks. Each industry has their own specific ones.

Beer brewers think of the manufacturing cost of beer in terms of cost per hecto liter (not liter, not kilo), but when they think about distribution cost, they think per 6 pack case (not liter, not kilo, not bottle). The cost of sending a letter is usually in weight, the cost of sending a package is usually expressed in terms of volume. Retailers think in terms of sales per square meter. Technology startups think often in terms of per user per month.

Find out what the norm is in your industry and adjust your financials.

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