Posts Tagged ‘Graphics’

PowerPoint goes berserk

April 30, 2010

As investor relations professionals, we’ve all seen PowerPoint slides that get just a little bit out of control. Too many bullets, too many words, too many pictures – the CEO makes one more addition – and a visual aid turns into a visual Frankenstein.

For your weekend enjoyment, I thought I’d share this slide – from a consultant’s presentation to a group of US generals – as reported by the UK’s Daily Mail:

Yes, someone got a little carried away. “When we understand that slide, we’ll have won the war,” quipped Gen. Stanley McChrystal, US and NATO force commander.

This slide has nothing to do with IR – as far as I can tell – but I have seen graphic concoctions at brokerage conferences that come close to this level of complexity. The spaghetti bowl above reminds me of one “business model” slide I saw.

In our eagerness to tell everyone everything, we can become indecipherable. We must remember that IR is about getting people to quickly grasp our story – to understand, not to be wowed by management’s quantum mechanics-style thinking.

Some quick tips on PowerPoint slides:

  • Consider doing without. Some CEOs tell a more compelling story by simply talking. Depending on the setting, no slides can be very effective.
  • Limit the overall number. Fifty is settle-in-for-a-nap time (sorry if I offend). Twenty is a more palatable presentation for already distracted investors. The marathon analysts’ day is a different story – but, still, don’t get carried away, and build in some breaks from the daylong visual bombardment.
  • Each slide should make a point. It should have a single purpose. The point may be “Our 5-point strategy aims to drive EBITDA,” but the takeaway for an investor is the outcome, more than the 5 individual priorities.
  • Use the 6 by 6 rule. That is, 6 bullets of 6 words each – as a maximum per slide. Even that’s a lot of words.
  • Consider the magic of 3. Some experts swear by the psychological appeal of 3 things – 3 points, 3 bullets, 3 whatever – to make a memorable impression.
  • Graphics or pictures must serve the content. It’s not about eye candy. Visuals must help the listener understand – your finances, customers, markets, strategies or science. Illustrate for clarity.

I recognize the culture in some countries – hello, European IR folks – favors more complex slides. Mine is a US-centric view. But the core message still applies.

Take two steps back and look at your slides. Use that “View Slide Show” command in PP and imagine you’re a member of the audience watching and trying to listen.

Bottom line: Clear and simple tell the story.

Here are a few previous ideas on good slides, bad slides and surprises in presentations. What’s your pet peeve or best practice for slides?


Visualize the data

October 23, 2009

If you enjoy seeing your data in graphic form – not just drab tables or bland bullet points – you’ve got to check out a website called FlowingData. Nathan Yau, a PhD candidate in statistics at UCLA, publishes the site – a wealth of interesting pictures.

Investor relations people and our audiences are, of course, data geeks. IR is about the numbers – but more than that, our story is about the change in numbers, the trend that creates value for shareholders. Flat lists of numbers hardly do justice, sometimes, to the powerful drivers of performance for our businesses.

FlowingData mapWe should always be on the hunt for clearer, easier to grasp, more persuasive ways to communicate data on the markets for our products and services, not to mention the financial trends that influence our stock prices. To the extent that investors “get it,” they invest.

It’s worth spending some spare time exploring new graphic approaches. A good place to start is FlowingData’s “projects” page, a sampler of Nathan’s experiments in visualization (he also offers an archive of older projects). Some pearls I’ve found:

  • Living maps – WalMart or Target‘s amazing growth story starts with a single store and expands to fill up the continent, as the years tick by. Instead of showing a static map of locations on a slide in a Powerpoint, or a simple map on your website, go dynamic with a map that comes alive.
  • Bubbles – Discs on a graph, by their size and positioning, communicate a lot. Have a look at this post on US market shares of beer – you see at a glance who the winners are and by how much (unless you’re an upscale beer snob, ignore his comments on Bud, Miller and Coors). To go hyperactive with bubbles – and leave numbers behind – check out Nathan’s moving graph of people’s hopes and dreams as expressed on social media site
  • Choosing a chart – Ever wonder which kind of chart to use? Nathan links to a decision-making flow chart in a PDF file from the Extreme Presentation blog.
  • How not to do it – FlowingData offers six amusing tips here on how to make an ordinary graphic really, really ugly.
  • Blogs on presenting data – A page full of links offers a jumping off point for exploring dozens of viewpoints and how-to sources on visualizing data.

FlowingData doesn’t focus on financial information, though it has some economic content. For example, the humble bar graph isn’t explored much. A staple of data presentation for investors, many bar charts could speak more persuasively if they had movement to show growth over time – or even just better labels and scaling.

My point is simply that IR people need to be thinking and learning about graphics. Visual tools are critical to communicating effectively with investors – and we should be sharpening our craft, even as we keep up with the numbers side of IR. At the intersection between numbers and art, we should be lifelong students.

A few other sources to stimulate your visual thinking: The Wall Street Journal Numbers Guy blog, anything by data graphic guru Edward Tufte, By the Numbers blog in The New York Times, and the Extreme Presentation website.

Do you have a favorite source of ideas for graphics in IR? Share a comment.

Let’s make IR more visual

May 20, 2009

Whether you’re raising first-round venture capital or cultivating shareholders in a public company, investors need to understand the business model – and drawing a picture of it may help – suggests Cliff Illig, co-founder and vice chairman of Cerner Corporation, a mid cap healthcare IT company listed on NASDAQ.

Illig told a meeting of entrepreneurs last night at the Polsinelli Shughart law firm in Kansas City that a business model is essentially a value proposition. It’s not about how well-designed your widgets are, or the wonderful efforts you exert internally to develop or produce those widgets.

The business model looks outward and answers the question, “How do we create value for customers?” Someone else has described this less delicately as “How do we move money from the customers’ pockets to our pockets?”

Cerner includes a picture of its business model in each annual report and in every presentation to Wall Street, Illig said. Of course, I had to see this picture – so I looked it up (apologies for the shrunken copy shown here).

CERN business modelWell, Cerner’s business model picture isn’t exactly pretty – most companies bog down in complexity when explaining their business – but it does explain their financials. The graphic is a flow chart showing where the money comes from (sales pipeline on top), how it flows through contracts and backlogs into each of the business segments, what the margins are – and, ultimately, how money gets to shareholders in the form of operating profit and EBITDA (at the bottom).

I’m not pointing to Cerner as the Michelangelo of IR art – but do consider this picture.

A schematic of a business model says a lot. The more you can simplify it, the better. My feeling is that investor relations people ought to be doodlers – always taking what we hear and looking for ways to sketch a picture of it – simpler, more visual and more intuitive. Bottom line, we want investors to understand how we create value.

Pet peeve – graphs that deceive

September 16, 2008

Just as sure as a hurricane brings TV news footage of a reporter standing on a boardwalk with waves crashing in the background, stormy times in the market also bring out journalistic cliches. Breathless and overhyped commentary and pictures abound – in print, on the air and online.

One of my pet peeves is a subspecies of exaggerated reportage: graphs that deceive the eye. I’m not saying it’s intentional, but some graphs depicting the latest carnage create an erroneous perception that overstates the “meltdown.” (The graph shown here is from Page One of today’s Wall Street Journal, though I’m not singling them out.)

The problem is – I know this will sound nerdy – the lack of a proper scale on the Y axis. When a graphic designer sets the base of the scale not at zero but at some higher point, it creates a visual exaggeration. In this case, a Dow Jones Industrial Average index of 10,900 is the base. The truncated scale makes a more dramatic picture, but the reader gets a quantitative impression that is out of context. Instead of a 4.4% drop, our eyes see the stock market plunging more than 95% – very close to “zero” on the graph.

Of course, an editor might say readers are smarter than that; anyone sophisticated enough to read the WSJ can tell the difference between zero and 10,900. Yes, but images do influence our thinking – and more on an emotional level than a rational one.

A leading expert on graphic communication of statistics, Yale’s Edward Tufte, states the positive principle in his book The Visual Display of Quantitative Information:

The representation of numbers, as physically measured on the surface of the graphic itself, should be directly proportional to the numerical quantities represented.

Tufte even offers a formula for a “Lie Factor” to gauge how far out of proportion a graph is. (This calculation is off the scale for most stock-price charts in the media, which are vertically truncated.)

Moving beyond whining about a pet peeve, I might suggest a lesson for investor relations professionals: We should always look at our graphs – those bar charts that fill PowerPoint presentations and some say are eye candy in annual reports – and test them for visual integrity.

The classic bar chart might show EPS rising from $3.00 to $3.25 to $3.50 over three years. If the Y-axis scale starts at zero, the eye sees a 17% total rise – looks steady, not too bad. But if you draw the scale starting at, say, $2.00, the increase in EPS looks like a more dramatic 50% – much more “growthy.” Try it both ways in Excel or PowerPoint; you’ll see. My Excel sets “zero” by default at $2.70 – which really makes for skyrocketing growth.

Financial communicators of all sorts, corporate or journalistic, should be careful to present information not only accurately, but in context and with perspective … which I think means graphs drawn to scale.