communicating financial information effectively - … mgmt institute/2015 handouts... · blowing...

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Communicating Financial

Information Effectively

Sponsor: WACUBO BMI

Date: August 6, 2014

Location: UCSB

Name of Presenter: Joanne Coville

The World is complex, dynamic,

multidimensional; the paper is

static, flat. How are we to represent

the rich visual world of experience

and measurement on mere

flatland?

– Edward R. Tufte, Envisioning Information, The Graphics Press,

Cheshire, Connecticut, 1990

110 Effectively Communicating Financial Information, August 6, 2009

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My Goals

• Define and focus on the: Environment

Audience

Story

Solution

• Craft a story

• Communicate complex ideas with clarity, precision and efficiency!

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Communicating Financial Information Effectively 1/17/07 4

• The Magician’s illusions are based on techniques that:

Deny

Conceal

Obscure

Manipulate, optical information

• To create illusions is to engage in disinformation design

• Two principles of successful illusionists:

Suppressing context

Preventing reflective analysis

Edward R. Tufte, Visual Explanations: Images and Quantities, Evidence and Narrative, The Graphics

Press, Cheshire, Connecticut, 1990

Is Effective Financial

Communication Magic ?


• When communicating financial information

effectively, the techniques of disinformation are

reversed and the strategies of good

communications are reinforced

• Your audience should know beforehand what you

are going to do

• The strategies of magic suggest what not to do if

our goal is truth-telling rather than illusion-making*

* Edward R. Tufte, Visual Explanations: Images and Quantities, Evidence and Narrative, The Graphics

Press, Cheshire, Connecticut, 1990, page 55

Reverse the Techniques of

Disinformation Design


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What makes a good presentation?

• We all know when a presentation is good.

• And, we know when they are poor.

• What are some attributes of a good

presentation?

• What are some attributes of a poor

presentation?

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Story Time

• Would you rather listen to someone state facts

and figures or would you rather listen to a story?

• What story do you need to tell?


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Twelve Types of Stories

1. Historical narrative

“We have a history that makes us proud, and we want to apply or high

standards to the current situation”

2. Crisis

“We have to respond to the danger facing us”

3. Disappointment

“We made a decision based on the best information we had available, but

now we know it wasn’t the right decision, so we have to try something else”

4. Opportunity

“We know something now that we didn’t know before, which presents us with

a new possibility if we act”

5. Crossroads

“We’ve been doing fine on the path that we’re on, but now we have a choice

and we have to decide which path to take”

Summarized from Henry M. Boettinger, “Moving Mountains: The art of letting others see things your way ,” 1st Collier

Books ed, January 1975, Macmillan Publishing Company, Inc (Crowell-Collier Press, 1969).


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6.Challenge

“Someone else has achieved something amazing – do we have it in us to do the same?”

7.Blowing the whistle

“Although it appears everything is going fine, we have a serious problem we need to fix”

8.Adventure

“We know that trying something new is a risk, but it’s better to take a risk than to stay in a rut”

9.Response to an order

“We’ve been told we have to do this, so we’re here to figure out how to make it happen”

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10. Revolution

“We’re on a path to disaster if we don’t radically change what we’re doing”

11. Evolution

“If we don’t keep up with the latest, we’ll fall behind”

12. The Great Dream

“If we can only see our possibility, we can make it our reality”


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Crafting the Story

• How do you put all the pieces together to create

a cohesive story that is supported by data that

brings about the desired outcome?

• Use a story template…


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The Story Template

The Environment:

Where are we, and when is it?

The Audience:

Who are we in this environment?

Why are we here?

Our Future:

What do you (or our constituents) want to happen in the future?

The Solution:

How do we advance there from here?

The Middle: Developing Your Story

Key Point #1 Major Contributor A

Major Contributor B

Major Contributor C

i

ii

iii

iii

Minor Contributor

Minor Contributor

Minor Contributor

The Issue:

i

ii

iii

i

ii

The Beginning: The Introduction and Environment for Your Story

Refer to the template in your handouts – Adapted from “Beyond Bullet Points,” by Cliff Atkinson, Microsoft Press, 2005, page 22.


Major Contributor B

Major Contributor C


Major Contributor B

Major Contributor C

The Idea

This is the doorway/opportunity to the solution

The Ending: The summary, and recommendations for action, benefits and expected outcomes

The restatement

The recommendation

The benefits

The call for action

iii

Minor Contributor

i

ii

iii

Minor Contributor

i

ii

iii

Minor Contributor

i

ii

Minor Contributor

i

ii

iii

i

ii

iii

Minor Contributor

i

ii

iii

Minor Contributor

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Outcomes Needed?

• Will you be satisfied with providing information

only?

• Will you be satisfied with obtaining input only?

• Do you need a decision? Who in the audience

will make it?

• What latitude do you have in the decision

process?

• What input will the audience really have in the

outcome?


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The beginning

1. Review / describe the environment surrounding

the problem

Why is this important to me?

2. Identify the “audience”

Who am I crafting this story for?

Why is this important to them?

3. State the current condition or situation

This is often a statement of the reason for the

change, request or requirement causing action

What has changed?

5 Most Important Elements of

Your Story


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5 Most Important Elements of

Your Story

4. Express the future condition or desired state

What you want to happen or where you would like

to be after the situation is resolved

5. Express the pathway(s) to resolution

How do we close the gap between point 3 and 4?

How do me move from point A to point B?

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• Read through the XXXX University Case Study

• Consider the audience, its needs, level of

knowledge, how to learn more, how they will use

the material, the frame of reference, your

institution’s situation and the time frame.

• In groups discuss and begin to build facts and/or

assumptions for preparing a presentation

Use the “beginning” section of Presentation/Story

Template

Application Exercise #1


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Strive for Clarity Early in

Your Presentation

• A clear statement of the problem is essential to a

successful presentation

Clarity addresses the audience’s question: “Why am I

here?”

• As soon as possible, address the following for your

audience:

What is the subject or topic to be addressed?

Why is the subject/ topic important?

What is a possible solution (s) or opportunity?


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Strive for Clarity Early in

Your Presentation

• Audience members are not purely rational

beings – they are emotional too

Make an emotional connection with the

audience by defining a few of the most

important elements of any story

Tailor these elements to your audience,

making the story personal.

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Beginning to Craft Your Story

• In view of the previous discussion, what are the

three key points that would be most meaningful

to your audience?

What message do you want to emphasize clearly and

concisely that would be most meaningful to your

audience

Identify your major “theme”. Some possibilities include:

– We’re doing better

– We need support, and we are worthy

– We have a problem

Aristotle is first credited with identifying that a well-constructed story should have a beginning, a middle, and an end.


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Beginning to Craft Your Story

Decide how to best relate your theme to the audience

Look for tangible (and desirable) outcomes available

Begin to tell your story – with this audience in mind

Anticipate the possible impact of your message


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Variations of Your Story

• One size or type of presentation might not fit all

situations

• Consider changing the structure of your story You could place the Why and the What questions first and

define the environment (the Where and When), the audience

(the Who), and the solution (the How) later

You could begin with the solution, used as an attention step, and

then continue with the other steps

At times, you might be able to eliminate one or more of the

questions, if the audience is clear and in absolute agreement

about a situation

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Practical Pieces of Advice for an

Effective Presentation (continued)

1. Provide everyone in the audience one or more pieces

of paper, rich with material related to your presentation

The credibility of paper

Serves as a record for future reference

Demonstrates responsibility

2. Master the details of your presentation through practice

Preparation and practice have high value

Repetition allows for improvement

Practice on what your audience will hear and see


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3. Show up early to your presentation Arriving early provides you a safety “buffer” to overcome

unforeseen problems

Provides a few moments for you to relax

Allows you to greet people as they arrive

Build relationships

4. Finish early Get to the point

Be brief

Remember, its about “Edutainment”

Samuel Johnson’s famous comment on Milton’s Paradise Lost: “None ever wished it longer. . . .” The Lives of the Most Eminent Poets (London, 1783), volume 1, p. 249.


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5. Anticipate questions from your audience

If you have one member of your audience that has “issues” deal

with those in advance of the presentation

This might require a separate one-on-one presentation

Try to answer the “anticipated” questions in your presentation,

thereby avoiding unwelcome discussion during your presentation

Answering these questions demonstrates thoroughness

6. When answering questions during your presentation

Validate

Clarify

Respond

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• Using the same XXXX University case study you

chose before, identify three major messages

and the data elements that relate to those

messages

Use the “middle” portion of Presentation/Story

Template

Application exercise 2

Evaluate Data Requirements


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Selecting the Right Data is Critical

in Reaching Your Audience

• Begin with the basic story and identify data relevant to the story Focus on the three key points

• Be selective Do not use too much data

• Pay attention to time frames Use appropriate time frames in your financial data

• Comparisons Often, this is a good opportunity to integrate the use of

non-financial data into your presentation

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Selecting the Right Data is Critical

in Reaching Your Audience

• Financial data reflects operational decisions

Remind your audience that financial data is derived

from our student population, campus additions and

building improvements, information technology

services, employee health, sponsored research

changes, etc.

• Be consistent with other financial reports

Use existing financial and institutional reports as your

starting point and extract data from them


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Graphics Reveal Data

• Information is data that allows for an action or

decision to take place!

• Data, in isolation, does not foster decision-

making

• Graphics can be more precise and revealing that

computations alone.

Consider Anscombe’s Quartet


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Anscombe’s Quartet:(all four of these data sets are described by the same linear model)

I II III IV

X Y X Y X Y X Y

10.00 8.04 10.00 9.14 10.00 7.46 8.00 6.58

8.00 6.95 8.00 8.14 8.00 6.77 8.00 5.76

13.00 7.58 13.00 8.74 13.00 12.74 8.00 7.71

9.00 8.81 9.00 8.77 9.00 7.11 8.00 8.84

11.00 8.33 11.00 9.26 11.00 7.81 8.00 8.47

14.00 9.96 14.00 8.10 14.00 8.84 8.00 7.04

6.00 7.24 6.00 6.13 6.00 6.08 8.00 5.25

4.00 4.26 4.00 3.10 4.00 5.39 19.00 12.50

12.00 10.84 12.00 9.13 12.00 8.15 8.00 5.56

7.00 4.82 7.00 7.26 7.00 6.42 8.00 7.91

5.00 5.68 5.00 4.74 5.00 5.73 8.00 6.89

N = 11

mean of X's = 9.0

mean of Y's = 7.5

equation of regression line: Y = 3 + 0.5X

standard error of estimate of slope = 0.118

t = 4.24

sum of squares X - X = 110

regression sum of sqaures = 27.5

residual sum of squares of Y = 13.75

correlation coefficient = .82

r2 = .67

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Yet, how they differ!(F.J. Anscombe, “Graphs in Statistical Analysis,” American

Statistician, 27 (February, 1973), 17-21)

I

0.00

2.00

4.00

6.00

8.00

10.00

12.00

0.00 2.00 4.00 6.00 8.00 10.00 12.00 14.00 16.00

II

0.00

1.00

2.00

3.00

4.00

5.00

6.00

7.00

8.00

9.00

10.00

0.00 2.00 4.00 6.00 8.00 10.00 12.00 14.00 16.00

III

0.00

2.00

4.00

6.00

8.00

10.00

12.00

14.00

0.00 2.00 4.00 6.00 8.00 10.00 12.00 14.00 16.00

IV

0.00

2.00

4.00

6.00

8.00

10.00

12.00

14.00

0.00 2.00 4.00 6.00 8.00 10.00 12.00 14.00 16.00 18.00 20.00


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Our goal is to communicate complex ideas

with clarity, precision and efficiency!

• Our reports and graphical elements should:

Show the data

Focus the viewer on “thinking” about the substance

rather than about the method, design, technology or

anything else

Communicate the truth about what the data have to

say (avoiding distortion; preserving data integrity)

Present much data in a small space


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Our goal is to communicate complex ideas

with clarity, precision and efficiency!

Make large data sets coherent

Encourage the eye to compare different pieces of

data

Reveal the data at several levels of detail, from a

broad overview to a fine structure

Serve a clear purpose: description, exploration,

tabulation, etc

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Written Reports

• Chose a format and then follow it consistently

• Use words, numbers, and graphics together

• Tell your story about, and with, the data

• Use attractive displays, they do not have to be

“works or art”

• Simple is better than complex, both in words and

graphics

• Use the “Story/Narrative Template” as the guide

or outline for your report


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Making Complexity Useable

Friendly1. Words are spelled out, avoiding mysterious and elaborate encoding

2. Words run from left to right, the usual direction for reading

3. Little messages help explain text

4. Elaborately encoded shadings, cross-hatching and colors are

avoided: instead, labels are placed on the graphic itself; no legend

is needed

5. Colors, if used, are chosen so that the color-deficient and color-blind

(5 to 10 percent of viewers) can make sense of the graphic (blue

can be distinguished from other colors by most color-deficient

people)

6. Type is clear, precise, modest and is upper-and -lower case

From Edward R. Tufte, The Visual Display of Quantitative Information, 2nd edition, The Graphics Press, Cheshire, Connecticut, 2001, page 183.


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Making Complexity Useable

Unfriendly1. Abbreviations abound, requiring the viewer to sort

through text to decode the abbreviations

2. Words run vertically, particularly along the Y-axis; words run in several directions

3. Graphic is cryptic, requires repeated references to scattered text

4. Obscure codings require going back and forth between the legend and the graphic

5. Design insensitive to color-deficient viewers: red and green are used for essential contrast

6. Type is overbearing, is all capitals

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• Restate your position

• Make a recommendation

• Talk about the benefits

• Make this a call for action

The Ending


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Application Exercise #3

• In groups

Complete the “ending” section of Presentation/Story

Template

Develop three or more slides for your presentation

Summary and Concluding

Remarks

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Our Goal

• To define and focus on:

the environment (the Where and When),

the audience (the Who),

the story (the Why and the What), and

the solution (the How)

• To craft a story

Beginning

Middle

End

• To communicate complex ideas with clarity, precision and

efficiency!


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Communicating Effectively is

Not Magic!

• Remember, to pull a rabbit out of a hat, the

rabbit must first be in the hat!

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