They say a picture is worth a thousand words… “Telling the story” is one of the...
Applying Analytics to Storytelling
According to Google's Chief Economist, Dr. Hal Varian, "The ability to take data—to be able to understand it, to process it, to extract value from it, to visualize it, to communicate it— that’s going to be a hugely important skill in the next decades." LinkedIn confirmed this when they analyzed the skills most needed in 2018 and among the top skills they identified are data analysis, presentation and communication skills. Applying storytelling to analytics embodies all these skills and is critical to FP&A professionals who want to move the next level.
As FP&A professionals we are expected to not just report on data, but to add value to our organizations with analysis we produce. There are many reasons we should strive to incorporate storytelling into how we communicate the results of our work. In their best-selling book "Made to Stick", Chip and Dan Heath talk about how people's ability to recall information was more than ten times better when they learned information through a story, rather than being presented with data alone. Beyond just making information more memorable, research shows that stories increase people's propensity to act on what they have seen and heard in stories, so storytelling is clearly an invaluable tool we should use when communicating.
Don't just present numbers, help people understand the story behind the numbers
The key to using analytics is extracting insights that drive effective decision making and storytelling works as a lever to get the most out of those insights. The first step to developing stories based on our insights is to start with the end in mind. What decisions will your analysis support that drives the business forward? Answer this question first, rather than being pulled in whatever direction data takes you. Exploring data with an open mind is important, but it is once we have developed our insights that we must move to the communication piece of the puzzle, so decide first what your end goal is. Are you communicating to inform, to influence, to persuade, to educate? There are many reasons we analyze data, so get clarity on your goal first. Once you have decided on your desired outcome you must start to develop your story using a combination of visuals and narrative.
There are many data visualization tools with a wide variety of functionality, but even the most rudimentary visuals that you can create in spreadsheets are helpful to telling a story with data. If you have more sophisticated visualization tools, use them, but don't let the tool drive your story. Let the data tell the tale, with you as the narrator steering the story in the right direction. There are many great advantages of visualizing data, which is the subject of an upcoming article, but suffice to say we should always incorporate visuals whenever they make data quicker or easier to understand.
Use narrative to add context
Use narrative to expand on what your visualizations show. You may have a visualization that clearly shows a trend, but the trend alone usually doesn't tell the entire story. Adding narrative provides context that helps people understand the bigger picture. Is your trend the result of some other data you can discuss or show with another visual? How is the data you present related? Maybe the trend in your visualization of your company's revenue is the result of several new marketing efforts that are illustrated by another visualization. Tie them together to create a complete picture of what is going on in the mind of your audience.
By performing analysis with the end in mind, being intentional and focused in choosing what data to communicate and combining visualizations and narrative to craft your storytelling, you will take how you communicate with analytics to a new level.
The article was first published in Unit 4 Prevero Blog