Data Visualization Principles for Management Consultants & Analysts

In consulting you will spend a lot of time creating presentations to show the results of your analyses to the customer. That is why data visualization is so important. With a proper display of data, you have more chances of convincing the customers that your approach makes sense.

Today, you will learn how to use different data visualization techniques to show the results of your analyses during consulting projects.

Remember that charts are just a small part of the Management Consulting Presentations. Make sure to revise the methodology of creating such presentations.

How to read charts.

People on purpose or by accident lie quite often with charts. That’s why we will start with a short movie that will show you what kind of traps you should try to avoid while trying to interpret charts.

What do you want to show?

Before you decide which chart to choose, it’s important to understand why you need one and what story you want to tell your audience.

There are 7 main things that people want to show by using charts. Let’s see what you want to show when using charts.

1. How something has changed over time. Quite often you want to show the development of certain phenomena in time. For example, you may want to show that the revenues of the firm were going up while the profits were not growing. You may also want to show how production output has changed over time. By using charts in such a situation you can easily show trends or some sort of seasonality.
2. Compare across 2-dimensions different options. In certain situations, you may want to compare 2 things across many dimensions. In most cases, it will be done across 2 dimensions. For example, you may want to compare different projects to each other. To compare them you may decide to look at the time needed to complete them and the costs. These sorts of charts are easy to read and great for decision-making.
3. Compare across 3-dimensions different options.
4. Compare across more than 3 dimensions.
5. Composition. By composition we mean structure. In other words, you want to show the structure of something. Usually, we will use this sort of chart to show market shares, market structure, segment size, etc. In many cases, you want to show it over a period of time.
6. Funnel Analysis. Many complex things can be divided into stages. To show how the situation changes from one stage to another you may decide to use the so-called funnels. For example, funnels are used in e-commerce to analyze customer acquisitions. You divide the whole customer journey into stages and you measure the conversion stage from one stage to another. Thanks to this you can find the stage on which you should concentrate.
7. Local difference. Finally, when analyzing competitors, and markets you may decide to show local differences between regions, states, and countries. In this way, you can show a more complex picture than simply by looking at aggregated data. Quite often the picture at the aggregated level will be totally different than at the level of specific regions. These sorts of charts are great for planning specific actions and seeing the complete picture.

Which chart type you should use?

Now let’s see what kind of charts you can use for every goal. I will discuss briefly the types of charts that you can use for every goal.

1. How something has changed over time. Let’s start with the most popular thing you will want to show – the development of phenomena over time. Below is a short movie showing what kind of charts you can use for that.
   
2. Compare across 2-dimensions different options. If you want to compare different options across 2 dimensions you will use the standard column or bar charts, line charts, and a mix of such charts. If you are dealing with many potential options a scatter chart may also be an interesting choice. Check the presentation starting from slide 69.
3. Compare across 3-dimensions different options. When dealing with more dimensions we can obviously still use the options for the 2-dimensions. However, on top of that, you can also utilize the so-called bubble chart. Looks really cool although no consultants have problems with reading them. Check the presentation starting from slide 79
4. Compare across more than 3 dimensions. If you decide to do the comparison across more dimensions you may consider switching to the so-called snake graph or radar chart. Check the presentation starting from slide 86
5. Composition. To show the structure, you will most likely want to use a pie chart. This would be not the best choice. Most consultants will use for that different types of column charts or bar charts. In some cases, you may use the so-called waterfall chart or Pareto Chart. Check the presentation starting from slide 90. Below you can find a movie with a short example.
   
6. Funnel Analysis. For Funnel analysis you most often will use funnel charts. In certain situations, a bar chart or a column chart may be also a good choice. We may also consider heat maps or waterfalls. Check the presentation starting from slide 107.
7. Local Differences. To show local differences, ideally, you will resort to a map with color-coding. In some cases, you may decide to add next to the map bar or column charts. Check the presentation starting from slide 116.

What tools do management consultants use for Data Visualization?

In most cases, you will be using Excel and PowerPoint. In more complicated projects where you want to make a dynamic view of data or you create a tool for the customer, you will resort to Tableau or PowerPivot. Check our playlist on YouTube on Data Visualization. We share there some tips on how to create certain charts in practice in Excel and PowerPoint. Below is an example of a dashboard created using Pivot Tables in Excel:

That’s in short. As always I recommend checking our online course Data Visualization for Management Consultants & Analysts. You will find there +3 hours of content and more than 80 lectures, that will teach you all the things you need to create great charts fast as a Management Consultant.

The whole post with examples and details is also available as a presentation.

Check also our post How to create a great Management Consulting Presentation.