Data Visualization: What’s it Worth?
Follow me to your last meeting. What is on the screen? Wading through the clip art and the bright, unnecessary variety of colors, you see a wall of text. You think you hear someone talking but you’re not sure, you’re too focused on reading the slide. You begin to see light and believe you will finally conquer that wall of text… but wait! The slide changes. Discouraged, you press on only to realize another wall stands in your way. This time, instead of words, it’s a wall of numbers. Defeated, you wave the white flag and lean back in your chair thinking of your next meal. What a waisted opportunity! I am willing to bet, behind those walls of text and numbers resided useful insights that the whole audience was anxious to hear. If businesses fail to communicate their data, the fruit of their labors will be largely diminished.
Perhaps I exaggerated your company’s situation, perhaps I didn’t. It is certainly true, however, that poor data visualization is the culprit of untold financial waste in businesses across America. I like to woodwork, and in woodworking it is expected that you will apply a finish to a furniture piece once you have constructed it. The finish helps the piece endure the elements and abuse it will be exposed to throughout its life. The finish also provides that beautiful wood ascetic all woodworkers are searching for. Almost every woodworker has a reverential fear of the finishing process because they realize the success of the entire project is at stake. Botch a finish and you’ve botched the project. You will never again get back those hours in construction and dollars spent on materials. Corporate America is in the same situation. The only difference? They don’t know it.
If you have the stomach for it, calculate every cost associated with a routine operation in your business that culminates in a report (and don’t forget about the opportunity cost). What a shame it would be if your employees spent thousands of company dollars to discover insights, only to fall utterly short in the delivery of those insights. I believe people tend to fall short in visualization because they overestimate their ability to communicate. They assume that as long as they have the correct information, they will get their message across. Sure, they may be a little wordy, or their visuals may be poorly executed, but people will get the gist. Wrong.
The truth is, humans are hardwired to receive information in a specific way… visually. Sight is the “sensory portal… most intimately connected with cognition”, Stephen Few writes.[1] He goes on, “approximately 70% of the body’s sense receptors reside in our eyes.”[2] Colin Ware, a leading mind in visual perception, states:
“Why should we be interested in visualization? Because the human visual system is a pattern seeker of enormous power and subtlety. The eye and the visual cortex of the brain form a massively parallel processor that provides the highest-bandwidth channel into human cognitive centers. At higher levels of processing, perception and cognition are closely interrelated, which is the reason why the words ‘understanding’ and seeing are synonymous. However, the visual system has its own rules. We can easily see patterns presented in certain ways, but if they are presented in other ways, they become invisible… The more general point is that when data is presented in certain ways, the patterns can be readily perceived. If we can understand how perception works, our knowledge can be translated into rules for displaying information. Following perception-based rules, we can present our data in such a way that the important and informative patterns stand out. If we disobey the rules, our data will be incomprehensible or misleading.”[3]
Ware is asserting that visualization does far more than provide an attention grabbing, ascetically pleasing graphic for our audience. Visualizations yield insights that were previously invisible. This assertion is outstanding if true (and I believe it is, see below).
How can this be? If the information is the same between a group of data cells and a graphic, how could the graphic yield any new insights? Well, you’re correct, the data never changes. The audience’s ability to perceive it does, however. Humans have what is called working memory. Working memory is the short-term memory bank of our minds. It’s the middleman between the outside world and your long-term memory.
The information stored in your working memory is stored in chunks. Perhaps it will be helpful to think of it as a set of bins. Camões Jorge states that “current studies suggest that three is the average number of objects that can be stored… at any moment.”[4] So, we have 3 or so bins to fill with temporary information. From this, we can begin to comprehend the information and glean insights, which are then stored in long-term memory.
Think of a phone number. We remember phone numbers in a set of 3 for a reason. Remembering 10 individual numbers would be much more difficult than grouping those numbers into 3 groups. Each group of numbers occupies one bin. So, with data tables, each cell occupies one bin. That doesn’t leave us with much information to work with. Our working memory is the limitation that prohibits us from gleaning insights with data alone. A visual, however, represents multiple points of data while only occupying one bin.
I could try and prove my point with powerful rhetoric, but what better way to prove the power of data visualization than a visual example! For this example, I pulled a sample of the Industry Economic Accounts Data from 2019 to Q2 2021, publicly available on the Bureau of Economic Analysis’ website. This data is showing gross output by industry.
Perhaps you have seen a data table like this copied and pasted into a presentation before. Perhaps you have done it yourself. Contrary to popular opinion, this is not what is meant by data visualization. Sure, data is technically displayed in a manner that your eyes can perceive, but it would be impossible to gain any meaningful insights from this display. If I were to ask you which industry had the largest gross output, you could give me the answer; however, it would take far longer than it should. Perhaps you would sort the data table by largest gross output before placing it in your presentation to help your audience discern this.
Ok, now you can quickly tell me the largest industries, and how they compare to other industries’ gross outputs. But that’s about it. If I were to ask you, for instance, which industries (if any) haven’t suffered a loss of gross output per quarter since 2019, you would struggle to give me the answer. Why is this? Remember that working memory we talked about? Your brain interprets this table as 180 different bits (cells) of information. It would be impossible to glean a fraction of the potential insights this data has to offer if we left it as it currently stands.
Now, some key insights have become readily apparent. Why did every industry’s gross output drop in Q2 of 2020? If we are to assume it is due to Covid, which industry was hit the hardest? Which industry was least effected? How has recovery been for each industry? Has every industry recovered to pre-pandemic outputs? Which industry was least affected by the Q2 drop? All these questions could be answered by your audience with little effort. Some may have even been unconsciously perceived. Do you see now, how a visualization can be much more than an attention grabber? It can lead to valuable insights that were previously inaccessible.
How can this be? We are looking at the same information! Well, we have condensed 180 bits of information into 10. You brain, instead of comprehending a single value, can comprehend an entire line. I give you, the power of data visualization.
I believe there is far more that could be gleaned from this data set, so we will use it for the rest of this series. Though this line chart is informative, different visuals could convey different aspects to the data which could yield different insights. We will employ some other useful charts, perhaps adding in additional data from the Bureau of Economic Analysis, as we explore this data set together.
If, by the end of this series, you are firmly convinced of data visualization’s importance, I am content. If you learn some good visualization principles and innovative charts along the way, even better! As this series continues, I plan to explore some guiding visualization principles, key charts to master, newer developments in the data visualization world, and perhaps some Excel tips and tricks to use for visualizations.
[1] Stephen Few, “Thinking With Our Eyes,” in Now You See It: Simple Visualization Techniques for Quantitative Analysis (Oakland, CA: Analytics Press, 2009), p. 29.
[2] ibid
[3] Few, Stephen, and Colin Ware. “Thinking With Our Eyes.” Essay. In Now You See It: Simple Visualization Techniques for Quantitative Analysis, 29. Oakland, CA: Analytics Press, 2009. [emphasis mine].
[4] Camões, Jorge. Data at Work: Best practices for creating effective charts and information graphics in Microsoft Excel (Voices That Matter). New Riders, 2016. Kindle.
