ICAEW.com works better with JavaScript enabled.

Why clarity is power when providing information

How much time do you waste staring at indecipherable information, struggling to work out what it is trying to tell to you? At impenetrable graphs or tables? At confusing organograms or flowcharts? At endless dull bullet points? Executives rely on information to make decisions, yet they are let down by the information they receive - it fails to inform them properly.

I've qualified as a chartered accountant and an MBA, but not once did anyone teach me how to show information. Then again, why should they? It is all just common sense, isn't it? And we were taught pie charts at primary school. So, 30 years later, when trying to show a complex issue or a large volume of data, we remember our primary school lesson and do some pretty, colourful pie charts, albeit with a computer, not crayons.

As for showing numbers in tables, accountants are bound to be good at this, aren't they? Certainly most of them believe they know and apply the principles for clear tables.

Yet I rarely meet an accountant that truly does know and apply them. If you need convincing of this, look at your company's management information pack - most of these being far more uninviting and impenetrable than needs be.

Showing information isn't common sense, it is good sense. There are principles to follow and none is complex or rocket science. These principles are based on how people first react to facts and numbers, then scan, understand and remember them. Showing information is about communicating, not computing. And it isn't just about providing better numerical information but better words too - there are clearer ways to show your information than as an interminable stream of bullet points.

Clear information isn't about remembering to state your sources or ensuring each axis has a label. While such functional disciplines show thoroughness and are important, they don't on their own achieve clarity. (For those interested, these disciplines are amply covered in a somewhat uninspiring British Standard on tables and graphs.) And showing information isn't about colours and design frippery, despite the approach taken by some books which seem to believe that 'pretty' and 'clear' are synonymous.

There are many benefits to showing information clearly. Your documents and analysis get read. They are more inviting for the reader. The audience understands and absorbs them faster. Time is saved. Better decisions are reached more quickly.

Many tips or changes to achieve clarity are individually quite small, yet collectively they can make a huge difference. One company made 22 changes to the format and structure of a single page of key performance indicators. The effect was dramatic. By removing pointless graphs and typographical clutter and restructuring the layout of what was left, the page was inviting on the eye and the information far easier to understand and absorb.

And clarity can produce strange results. After a company made its monthly information pack clearer, one profit-centre chief executive officer (CEO) said of his profit and loss account, "I have never understood what it says. Could you talk me through it please?" Previously the page had been impenetrable and uninviting so he hadn't ever tried to penetrate it. Now the page was much more accessible, he had no excuse not to!

The costs

A document that shows information poorly can easily take twice as long to read and understand as a document that presents it clearly. If that document is for a 15-person board, the extra time taken to read and absorb the poor document comes at quite a cost.

However, showing information poorly not only costs money, it costs lives. The world expert on information design is Edward Tufte and he famously showed that unclear graphs by engineers failed to convince decision makers to abort the doomed 1986 space shuttle launch. The engineers had identified good reasons not to launch but the evidence and graphs they presented to the launch controllers were poorly constructed. The next day, the Shuttle exploded on take-off, killing seven people. Tufte also has a justifiable hatred of pie charts and says the only thing worse than a "dumb pie chart" is two of them.

Clear information demonstrates clear thinking, and clear thinking impresses. Almost every decision maker has a boss to answer to and needs to be able to explain to that boss why they made the choice they did. Clear simple information makes it easy for the decision maker to grasp your key points and explain them to his/her boss on your behalf and in your favour. Your proposals and client pitches are more likely to succeed.

Sadly for those CEOs thinking this could help their annual reports, the truth is that that is an unlikely outcome. Much of the annual report's layout is prescribed and structurally cannot be changed. As for format, investors expect a particular style too, regardless of its rights or wrongs. And so, despite Tufte's comments, multiple pie charts prevail - a quick review of eight annual reports in insurance showed 50% had multiple pies. Also, seven out of the eight used 'legends' - those boxes alongside charts, informing the reader as to what each slice or line represents - which are another barrier to clarity. A major exception to all this is Warren Buffett - whose reports not only avoid presentational gimmicks but are also brilliantly funny. Investors give slack to those as successful as Buffett.

Complex

Even when people are shown badly presented information, they rationalise away their confusion. They blame the topic: "it's a big complex subject, it takes time to understand." Or they even blame themselves: "I'm no good with numbers," or "I've a blind spot with this one."

Also, those conveying the information say they don't have time to make it clearer: "it's not a priority for us, it's an indulgence, we've other issues on our plate." And, you know - they're right. They don't have time. They've so little left after wasting hours deciphering their management reports. As for those 'other issues', they are busy spending huge amounts on a new system to produce numbers, while spending nothing learning how best to show them.

Then there is the Emperor's New Clothes syndrome - no-one wants to admit their confusion.

Getting clarity into charts

The right graph shows the patterns clearly, the multiple column chart is indecipherable. When I showed these charts on one of my courses, someone commented, "I have never understood those multiple column charts and always thought it was because I was stupid. It isn't though. It is because the graph is stupid."

When faced with something confusing or inaccessible, speak out and demand that those preparing reports and presentations stop wasting everyone's time. Even complex topics can be made clear - I've travelled four times round the world investigating frauds; they were complex, the reports weren't.

Those that prepare information have a responsibility too. Think twice before printing off that spreadsheet or doing those bullet points or crafting that pie chart. And be harsh on yourself. Whenever you say "What this graph is meant to show...", that means that your graph has not worked.

Do something different next time. Don't assume the Microsoft templates ('Wizards') will help - often, they hinder. A multidisciplinary team struggled to understand the relationships between the 260 units and sub-units in another group, spread over six reporting hierarchies. 'Conventional' organisation charts couldn't cope - they spread the group over eight separate pages, leaving readers struggling to get a sense of corporate perspective. By showing information differently - by ignoring the PowerPoint Wizard - all units and hierarchies could fit legibly on one A3 page and the team could see the wood for the trees.

The glib cliché is 'information is power'. Given how much information is poorly constructed and presented, I say that 'clarity is power'. Information without clarity is useless while information with clarity leads to power. In the meantime, send me any examples, both good and bad. And finally, if I start a campaign to ban multiple pie charts or column charts, do please sign the petition.

Author: Jon Moon is a freelance trainer and consultant. www.jmoon.co.uk 

Finance and Management newsletter, Issue 132, April 2006. Published by the Faculty of Finance and Management.