Telling the Story

Marimekko Chart Business Solutions

We'd like to introduce what we hope will be a useful tool for you!  Here's a presentation that provides working examples of different uses of Marimekko Charts. The charts were all built with Mekko Graphics software.  Feel free to let us know how you are using Marimekko charts with Mekko Graphics in your organization. We'd love to hear from you!

Click Here to Open the Presentation in PowerPoint

Using a Two-Chart Approach to Highlight Trends and Data Mixes within the Trend

Charts are a great way to show changes over time. Line charts are particularly effective in displaying and comparing trends (changes over time). Stacked Bar charts are most often used to demonstrate a mix within the data, i.e. the relationship of individual segments to each other and to the whole.  Combining the two charts side-by-side can together create a compelling message to the reader, more clearly than either chart in isolation.

A new report by McKinsey & Company utilizes this side-by-side chart approach in Exhibit 5. It shows two charts published by Martin Hilbert and Priscilla Lopez in Science measuring the rise of digitization.

As you can see, global storage capacity grew from 50 exabytes in 2000 to 290 exabytes in 2007 for both analog and digital media.  In 2000, the percentage of data stored in digital form was only 25 percent, but rose to 94% in 2007, through such media as hard drives, CDs and digital tapes.[1]  

 

 

Placing these charts side-by-side is a great way to demonstrate both the trend itself as well as the mix within the trend.  Line charts generally are best to show trends over time.  Stacked Bar charts are best at displaying relationships among data.  In the first chart, the line chart displays the positive trend of sheer data storage from 1986 to 2007.  In the second chart, a 100% stacked bar chart beautifully demonstrates the shift in the mix within the aggregate. Seeing these two charts side-by-side tells the story very effectively because the author used the best chart to tell each part of the message.  Trying to combine these two charts would not make the message as clearly visible.

Sometimes, using a two-chart comparison method is the best way to tell your story most effectively. When creating your charts, first think about what messages you want the chart to demonstrate.  Then choose the chart or charts that will maximize the clarity of that message.

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[1] http://www.mckinsey.com/mgi/publications/big_data/pdfs/MGI_big_data_full_report.pdf, page 17

Should I use a scatter or a line chart?

Recently, during the Q&A portion of our Mekko Graphics webinar, I was asked how to know when to use a line chart versus when to use a scatter chart.   This is a great question, as scatter charts and line charts look very similar to each other, especially when a scatter chart is displayed with connecting lines.  But, there are specific uses for each, and there are easy questions to ask yourself to determine which chart will best portray the data you wish to present.

You will want to choose a scatter chart if you wish to show relationships among numeric values in several different series.  Each dot in a scatter chart represents a specific xy coordinate.  

 

Conversely, you might wish to use a line chart to show trends in data either at equal intervals or over a period of time.  Line charts present data against a common scale. The data is distributed evenly across the x axis.  If your x axis contains non-numeric values, such as months, it is generally better to use a line chart. For numeric x values, it is generally a better choice to use a scatter chart.

 
 

Other questions to consider are

1. The scale of the x axis. If, for example, you wish to use a logarithmic scale, you might choose a scatter chart as opposed to a line chart.
2. Do you wish to show patterns?  Scatter charts are most useful for illustrating patterns in data, like clusters of data, or outliers.
3. Do you wish to compare groups of data points without time as a factor?  Scatter charts show comparisons, and the more data you include in your scatter chart, the better the comparison.
4. Are you using an evenly spaced interval across the x axis?   Line charts are best when using evenly spaced numerical labels that represent a time interval, such as years.  On the other hand, a scatter chart always has two value axes to show one set of numerical data along a horizontal (value) axis and another set of numerical values along a vertical (value) axis. The chart displays points at the intersection of an x and y numerical value, combining these values into single data points. These data points may be distributed evenly or unevenly across the horizontal axis, depending on the data.
5. Does one series need to be plotted on a different scale? You can create 2Y Line charts, when one or more series are best displayed on a different scale.

Mekko Graphics 5 is here!

We've taken Mekko Graphics to the next level. Mekko Graphics 5 is now available and includes new features in direct response to your requests. And we've added some surprises that we think you'll appreciate and enjoy. Fully compatible with MS Office 2010 (32-bit), with a new user interface, and enhanced data manipulation, Mekko Graphics 5 helps you deliver your message faster and more easily than ever before.

So you might be familiar with some of the major headliners:

• New User Interface
  Yup, it's new, and offers a ribbon toolbar both inside Mekko Graphics and for Mekko-related functions in PowerPoint for our Office 2007 and 2010 users.  The new User Interface will help you find what you need more quickly and efficiently, and has the look and feel of the latest in Office applications.

 

• Compatible with Office 2010 (32-bit)
  Probably the #1 request by our users, and yes, it is fully compatible with Office 2010.
• Improved Preference Manager with more control and customization options
  You asked for more control and we gave it to you.  You're going to love the new Preference Manager features. Now, you can set default color style (multi-color, no shading, or black and white) so all your charts will draw with that setting applied.  We also offer a new, smarter, alternative pattern option which displays more solids and fewer patterns on your charts, the ability to set default colors for your Gantt chart, and the option to set your "No Shading" color.

 
 

• Increased speed
  We've optimized some background processes to make opening, editing and saving charts faster, so you can create your decks even more quickly and efficiently.
• Improved label editing
  We've improved our inplace editing feature to allow for more extensive formatting choices, and the ability to see the entire label in the inplace editing screen.

 

But wait, there’s more!   Here’s even more features for you might not be aware of:

• Easier for Win 7 users
  Now that we've eliminated Microsoft .NET Framework 1.1 as a requirement, Windows 7 users will experience a more seamless integration with our software.
• Ability to create custom colors that stay with your chart
  Now you can create custom colors for your chart on-the-fly right from the Mekko Graphics application. And they save to your chart, so even if you mail your chart to a colleague who has a different palette, the colors will retain.

 

• Elimination of Excel conflicts
  We've eliminated the occasional conflicts with third party Excel add-ins by the inclusion of a new spreadsheet control that allows you to launch Mekko Graphics charts faster and switch back and forth between Mekko Graphics and Microsoft Excel more seamlessly.
• Ability to customize Quick Access Toolbar (QAT)
  For those of you who take advantage of Microsoft's QAT and depend on it, we now offer QAT support from within the Mekko Graphics application 

• Edit in Excel
  This is a slick new button in the data view section of our application that allows you to take your existing Mekko Graphics data and edit that data in Excel right from within the Mekko Graphics application.  Simply click the button right from Mekko Graphics and all your data automatically copies to an Excel spreadsheet, allowing you to do any editing. When you are finished, simply close the window and the data gets automatically inserted back into your Mekko Graphics data view. 

 

• Are you an IPhone or Blackberry User?
  Mekko Graphics charts are now viewable on your mobile devices. You can paste a chart object right into your email for easy viewing!

We're excited about all the new features and want to know what you think. We'd love to hear your thoughts about the new features. Comment or email us support@mekkographics.com.

 

 

 

 

 

 

Communicating IT Value to the Business

Today, we have a guest writer, David Goldstein, Ph.D., Managing Partner and Co-Founder of Knowledge Management Associates, LLC. Thanks for this great post David!

Communicating IT Value to the Business

George Westerman gave an excellent talk at last week's Boston SIM monthly meeting.  He spoke to the CIOs in the audience about how to communicate the value they provide to senior line management.  The information is expanded upon in the book he co-authored with Richard Hunter, "Real Business of IT: How CIOs Create and Communicate Value."  George is a Research Scientist at the Center for Information Systems Research (CISR) at the MIT Sloan School of Management.  His insights are based on extensive surveys and interviews of CIOs.

George's principal message was that CIOs must take control of the value conversation.  They shouldn't wait to be asked by line managers.  Their speech, both within and outside of the IT organization, should focus less on technology and more on how the technology improves business value--reduces cost or enhances revenue.

One tool that George displayed was a cascade chart that illustrated how the IT budget is both reducing company cost and increasing revenue.  I'm a big believer in using charts to tell a story.  KMA is the maker of Mekko Graphics, the best business charting software on the market (in my humble, but biased opinion).

Here is my interpretation of George's chart:

A CIO would use this chart to present a high level view of their upcoming IT budget to the CFO and the senior management team.  It highlights, in business terms, the impact of three key cost cutting initiatives, one required regulatory initiative, and three revenue enhancement initiatives.

To download a PowerPoint version of the chart, click here: Download ITBudgetCascade.  To edit the chart, you'll have to purchase a copy of Mekko Graphics. 

Some simple charts that are both well-thought out and well-presented can go a long way to improving the dialogue between IT management and the rest of your organization's senior leadership team.

 

Mekko Graphics 201 FREE Webinar!

Our FREE Mekko Graphics 2.0 Webinar has been a huge success!  This more advanced training session takes it to the next level, going beyond the basics by introducing some of the more advanced features that truly distinguish Mekko Graphics to be the leading charting solution. We are currently offering this training every other month, so sign up early to reserve your spot. 

In One Hour You Will Learn More Advanced Editing Techniques such as:

• Link to Excel
• Using the Preference Manager to change default colors, fonts, Y-axis orientation
• Formatting the legend to make it work for your presentation
• Hiding bars, adjusting margins, sorting series, showing data rows and more

We also include a Q&A session where you may ask those burning Mekko Graphics questions. This is a great opportunity to fine tune your already-existing knowledge as well as pick up some new tips!

And if you are a new user or just need a refresher on the basics, we still offer Mekko Graphics 101, which offers a great introduction to key concepts to start you on your way to building charts quickly and easily!  To sign up for the next Mekko Graphics 101 webinar, click here.

Growth/Share Charts

I’d like to highlight a chart that doesn’t get too much attention: the Growth/Share chart.  This chart examines two variables, relative market share and market growth. Highlighting  product categories in relatively strong and weak market positions, it is a four-cell (2X2) matrix used to perform business portfolio analysis.   The diameter of the circles is proportional to sales revenue, and it works by classifying products (or businesses) on the basis of their relative market share to their competitors or to the rate of growth in the market as a whole. The x axis is relative market share and is a reverse log. The Y axis is market growth.  

The four quadrants in the matrix have been referred to as Dogs, Cash Cows, Question Marks, and Stars.

 

 Market strategies will likely differ for each quadrant.

Dogs. These are products or business with a low market share in a low growth market.

Cash Cows. These are businesses or products with low-growth but with a relatively high market

Question Marks. Question marks are businesses or products with low market share but which operate in higher growth markets

Stars. These are products that are in high growth markets with a relatively high share of that market. Stars tend to generate high amounts of income.

Here’s an example of a fictitious toy company’s Mekko Graphics Growth Share Chart.

 

Notice the two axes. The X axis measures relative market share or the proportion of the market that the toy firm has captured.  It is the Firm’s Sales/Total Market Sales. The X axis is a reverse log.  The Y axis is the market’s growth rate.  The Bubble size is the percent of sales revenue for each product line divided by the total sales revenue.

 

Choosing the Right Chart for the Job

“The obvious is that which is never seen until someone expresses it simply.” – Kahlil Gibran

Mekko Graphics offers dozens of chart types from which to choose. But how to do you know which chart is the right one for your data? Choosing the correct chart is completely dependent on your message.   The key is ensuring you are using the correct chart is for you to be clear about what point, or message, you want to convey.

Each of our Mekko Graphics chart types, just as a function of the way it organizes your data, is best equipped to emphasize a different message.  Once you know what your message is, it’s easier to figure out which chart type to use.

The key question is what kind of comparison are you trying to communicate?  Gene Zalazny, author of the well-known book Say it With Charts, an Executive’s Guide to Visual Communication, created a matrix to recommend a chart form by highlighting different types of comparisons (page 27).

 

This matrix is a great tool and forces you to start thinking about what types of comparisons you are trying to make. He describes five categories of comparison: component, item, time series, frequency, and correlation, and then recommends broad chart types based on comparison type.

Let’s say you wish to compare your share of sales versus your competitors’ share for a given year. Here, you are comparing components, so perhaps a Pie chart is best. If you wish to compare many values (items) directly, you might use a Cluster Bar chart.  A Stacked Bar might compare parts of several totals. Not shown in the matrix is the Marimekko, a more unique chart for Mekko Graphics. Use a Marimekko when you want to create a 100% stacked bar, but add an additional dimension, by making the width of the bar as variable instead of fixed.  An example might be to compare sales by competitor by market segment, where market segments are different sizes.  A Line chart generally compares values over time. An XY Scatter chart shows correlation patterns, by comparing two sets of numbers at once, one on the horizontal X axis, one on the vertical Y axis. The data values are scattered across the chart. You have the option of connecting the values with lines, but those lines don't show trends over time. A Bubble chart can be used instead of a Scatter chart if your data has three data series (data series: Related data points that are plotted in a chart. Each data series in a chart has a unique color or pattern and is represented in the chart legend. You can plot one or more data series in a chart. Pie charts have only one data series.), each of which contains a set of values. For example, if you wish to chart number of products, dollar value of sales, and percentage size of market share.

Sometimes one chart type is best for part of your data, but another chart type is best for the rest. You don't have to choose one or the other. Instead, Mekko Graphics offers combination chart types. For example, you may use a Bar Line combination chart to display the differences between projected sales and actual sales.

If the multiple sets of data in a combination chart use vastly different scales, then a secondary axis is often needed. Perhaps you wish to show sales revenue, and also display commissions, calculated on the basis of sales revenue. The value of the commissions is only a small percentage of the value of the sales. You can solve this problem by adding another, secondary, chart axis.  Plotting the values of the commissions on their own axis makes it easy to understand the Line chart.

Zelazny’s tool is very effective as a jumping off point by helping you ask the right questions to clarify the message of your chart.  A successful business chart should help you as well as your audience make sense of what would otherwise be complex numbers and ideas. When designed poorly, charts just confuse. But choosing the right chart and utilizing good chart design will convey your message clearly and effectively.

Market Map Example for Start-up Company

A start-up home furnishing company wishes to examine the home furnishing industry to determine where they should invest their resources for the biggest payoff.  Their goal is to make decisions about which markets to inject themselves into, that will give them the best chance of growth. They wish to see not only the current major players’ position in the market, but also the segmentation of the market types themselves.  They have to examine the many markets including furniture, giftware, lawn and garden equipment, cookware, dinnerware/china/glassware, and seasonal accessories.   

They create a marimekko chart, or market map.

 
  
What can they learn? First, the largest segments are Furniture, Giftware, and Lawn/Garden. They represent over half the market.  The Furniture and Giftware segments are concentrated and dominated primarily by Company A and Company B. Their chance of successfully entering these markets is relatively small. On the other hand, they might have a better chance in the Lawn/Garden market, as that market is more fragmented.

In this case, the marimekko chart provides clear information to this start-up company about what segments are the most attractive.

cum hoc ergo propter hoc (with this, therefore because of this)

Did you know that there’s a strong, positive correlation between ice cream purchases and murder rates? When ice cream purchases increase, murder rates increase. When ice cream purchases decrease, murder rates decrease. Does ice cream cause murder?

Two relationships between variables are often confused: correlation and causation. Correlation refers to a relationship between two (or more) variables in which they change together. A correlation can be positive/direct or negative/inverse. A positive correlation means that as one variable increases (e.g., ice cream sales) the other variable also increases (e.g., murder rates). A negative correlation is just the opposite; as one variable increases. Causation refers to a relationship between two (or more) variables where one variable causes the other.

As you might have guessed, there’s a third variable that influences both. Weather. When it’s warmer, people are more inclined to buy ice cream. And when the weather is warmer, people are also more prone to violent acts.

When creating or interpreting charts, it’s easy to confuse correlation and causation.  In fact, Scatter charts are designed to try and compare two variables to see correlation.

 
It’s good to identify that relationships between variables exist. But it’s better to determine why they exist. In this industry, we need to be very careful when interpreting charts displaying a correlation and making recommendations based on these findings. In fact, we may end up making recommendations that aren’t useful — or that even backfire when we’re trying to reach our goals. If not, we may end up arming cold ice cream shops with law enforcement personnel when they are desperately needed in the hot streets.

 

visual  from www.xkcd.com