We often tend to confuse the purpose of presentations between the need to show how much work we have done, vs. trying to help the audience make an informed decision.
Edward Tufte, the guru of information design, points to espn.com as a wonderful example of data visualization done right. The average sports page contains hundreds of data items, yet they are organized in a way that the reader can reach conclusions effectively and efficiently. In finance and investing, we have hundreds if not thousands of data points that we analyze in order to make decisions – Whether its an equity analyst comparing financial statements across comparable companies, or an asset allocator looking at drivers of portfolio performance. The information may reside in your reports, but being able to review it such that you can identify the relevant relationships to help you make a decision is often lost.
Investment managers and consultants might take 100 page reports to investment committees to show the amount of work that they have done. However, these reports may not end up meeting the objective of helping the committee understand the key issues that they need to factor in when making the decision.
Some of the concepts in data visualization and information design connect with behavior and technology to help address this. We don’t need “chart junk” or 100 page reports to show the level of effort that we put in – and technology has advanced such that the boring data that reside in excel spreadsheets and database tables can be analyzed visually within minutes, making the investment committee meeting more educational, informative and insightful.
The two example slides below designed by the data visualization and automation startup Pellucid illustrate how improving the clarity of presentation can lead to better insights and decisions.
Its easier to make comparisons with a well designed table (Courtesy pellucid.com)
Identifying insights instantly that would have otherwise been lost in the raw data (Courtesy pellucid.com)
Disclaimer: All views expressed in this article are that of the author and do not necessarily reflect the views of his employer or any of its affiliates. The author may be associated as an investor or as an advisor with certain companies mentioned in this article.