When most people think about data analytics, they think about dashboards, spreadsheets and algorithms. While these are all elements of data analytics, they can only take us so far. It’s not enough to simply analyze the data. You need to be able to tell a clear and compelling story with the data.
One of the problems people have in leveraging their data is they approach it the wrong way. They do a data dump and see what they find. This is essentially trying to get your data to answer a question you haven’t asked.
Here’s a better approach.
Start with a hypothesis
If you don’t start with a hypothesis, data can play tricks on you. You can fall prey to confirmation bias, forget that correlation does not imply causation and succumb to other myths, traps and data fallacies.
Instead of starting with a data dump, begin with a question or assumption. For example, you might ask, “Why are our profits down? I think it’s because people are working from home and not as productive.” Then look at the data to see if it supports that hypothesis. If the data shows people are logging more hours working from home than they did pre-pandemic, you might need to come up with a new theory.
Find the signal in the noise
In data analytics, the signal is what you want to understand. It might be the reason profits are down (or up) or whether you’ll have success promoting a new service line with an email campaign. The noise is everything else that can affect the outcome, and the more data you have, the more noise there is.
It’s tough to spot the signals if they’re obscured by noise from bad data. No data is 100% perfect. However, taking steps to clean your data by removing anything incorrect, incomplete, irrelevant or duplicated will allow for the highest quality information in your decision-making.
Have a narrative
Once you find an answer to your question, don’t simply present the data to your clients, partners or other stakeholders. Instead, use it to craft a story that communicates insights gleaned from the data, the context surrounding it and the actions you recommend.
A powerful tool for storytelling can be found in Donald Miller’s book, Building a Storybrand. While the book is primarily about branding and marketing, its storytelling techniques come in handy in many other situations, including presenting data.
While I highly recommend reading the book, the gist of the message is that you (or your firm) are not the hero — you’re the guide. If you’re presenting data to a client, your client wants to be the hero of their own story. Craft your story in a way that positions the client as the hero and you as the person who guides them to success, and your story is more likely to land with your audience.
Use visualizations
Visual representations of your data and narrative are useful for communicating your story clearly and memorably — especially when speaking to a non-technical audience. Whether you use charts, graphs, diagrams, pictures or videos, choose visuals that make it easier for the audience to understand and engage with the data story.
Data-driven storytelling is a powerful way to communicate complex information, generate buy-in and promote better decision-making. As your firm starts harnessing and using data, don’t waste time, money and energy communicating the wrong things. Start talking about data in a compelling way. and your data will start driving change.
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Marc Staut, Shareholder and Chief Innovation & Information Officer at Boomer Consulting, Inc., helps meet the growing needs of CPA firms by leveraging his experience to provide strategic technology assessments, planning, visioning and coaching. He feels that “technology should be an enabler – something that’s approachable, aligned with and integral to the success of each firm.” Marc is a regular speaker, author and panelist on technology in the accounting profession, cloud computing, mobile technology, leadership and vision.