In this video, I'm going to break down this chart from Bain.
I'll talk about why they decided to use a line chart and what exactly they
did to make the chart so effective.
Plus, I'll talk about the one thing Bain does better than any other
consulting firm when it comes to building charts, all that and more coming up.
Hi, everyone.
Paul here with the analyst academy, where we teach people how to create high
quality consulting style presentations.
Our courses have been used to train consulting, finance, and strategy
teams in some of the most prestigious organizations around the world.
So if that sounds like something you or your organization might
be interested in, make sure you visit us at theanalystacademy.com.
The chart I'll be reviewing today is from an article on Bain's website
called Why category leadership matters more than ever in Medtech,
which we'll link to down below.
All right, here we go.
The chart is just a simple line chart that shows the growth in earnings for two
different groups of medtech companies, category leaders, and everyone else.
The title says In medtech, turbulent times favor category leaders.
So very simply, it's just trying to show how well the category leaders perform
compared to the rest of the industry.
The Y axis shows the growth in earnings before interest in taxes for each of
these two groups and its index to 100, so you can compare them apples to apples.
Then the X axis just represents time from 2007 before the recession until 2019.
So you can see pretty clearly that these category leaders significantly
outperformed the other med tech companies, both during and after the recession.
Now there's a lot of things that Bain has done really well with this chart.
But the first thing I want to talk about is their decision to use a line chart.
Line charts are great when you're trying to show how information changes over time.
Our brains naturally associate line charts with time, because
there's a connection between each of these different data points.
2012 is connected to 2013, which is connected to 2014 and so on.
If you were to put this in a column chart, there would be a
natural gap between each year.
So the data points would feel a little more disconnected.
Here Bain wants us to notice the connection because they want us to
see a trend and more specifically, they want us to see how the trend
Whenever you're building a chart, the first thing you really want to make
sure you get right, is the title here they've got two titles and they're
both important in their own way.
This title, just above the chart explains the data- growth in earnings before
interest and taxes, 2007 index to 100.
But then at the very top, they've got another title where they very
clearly called out the insight they want you to look for.
In med tech, turbulent times favorite category leaders.
What this title does is it helps the audience understand the insight
so they know exactly what to look for when they read the chart.
They know how to interpret the data.
And even if they don't do it consciously, they're going to see that
the insight is proved by the data.
After I read that turbulent times, favorite category leaders, it's much
easier for me to see that reflected down here with the red line, pretty
significantly outpacing this gray line, even for a chart like this that's pretty
simple the correct interpretation is important without a title I might look
at this and make the conclusion that the category leaders have outpaced the
other companies over the last few years.
But what's really important here is that's not the message.
The message is about how companies perform in response to turbulent times, which
is probably something I wouldn't have been thinking about had I just looked
at the chart without any direction.
In the context of the article this distinction is especially important
because they're trying to explain what might happen to the med tech
industry in response to COVID-19.
By focusing the reader's attention on how the MedTech industry has reacted
to turbulent times in the past, they can make a much stronger argument
for how it will react in the future.
Another thing they've done really well is to use color to make the insights pop.
Bain consistently does this better than any other consulting firm
largely because their color template really lends itself to this.
They use a lot of black and gray in their slides so that they can use red
to provide contrast and help attract attention to what matters the most.
Every slide or chart is a battle for the audience's attention.
So just like you guide them logically, you need to guide them visually.
Here are the category leaders group is what they want you to notice.
So highlighting it in red makes that natural and normal.
Notice how there's nothing else red on the chart, competing for your attention.
In addition to the obvious highlights, they've also done a good job
providing the important contextual information like this gray section
that indicates where the recession is.
This is especially critical for this chart, because as we've talked
about, the message is about how companies respond in turbulent times.
As I'm looking at this chart, it's really helpful for me to see when
those turbulent times occurred without having to do much thinking of my own.
It's also important to note that the color is a bit muted.
It's gray instead of red.
This keeps the attention on the red line, but still shows very clearly that 2008
through 2010 was an important period.
These kinds of background highlights can be especially important in line
charts like this, where your brain might not be connecting the dots
between the years you're looking at and some important period or event.
And this, again goes back to the idea of simplicity.
You want to make things as easy as possible for the reader so they
can focus on what's important.
So the takeaway is to make sure you add contextual information to your charts.
Even if it's something your audience knows such as the years of a global recession,
it really helps to bring the data to life and emphasize your key message.
Another thing they've done well is to add this section here.
A common mistake I see with line charts like this is to add a separate
legend with shaded boxes that tell me what each category means.
The reason why this is a mistake is because you force the reader to look
back and forth between the legend and the chart, which is just unnecessary.
Having the labels right next to the line here is much more intuitive.
And it's just one less thing the reader has to worry about when
trying to interpret the data.
This small table is also critically important for the chart.
This is one thing consulting firms tend to do pretty well, which is to add
data on top of, or next to the chart to really help emphasize the message.
Here you get a nice comparison between the two different groups.
The category leaders saw 5% growth between 2010 and 2015 versus 0%
growth for the other companies.
And then again, 8% growth versus 4% growth from 2007 to 2019.
This is exactly the message Bain is trying to emphasize that category leaders
performed better in response to the recession and emphasizing this helps them
draw comparisons with the pandemic, which supports the article's broader message.
Then one final thing I want to call out here is how clean and clear the
chart is from the title to the labels everything is well formatted, nicely
aligned and perfectly in place.
There's nothing on the chart that doesn't have a purpose.
And the overall presentation is easy to read and interpret.
The white background, contrasts nicely with the black, the gray and the red,
and the font is simple and easy to read.
All these things together help me as a reader see what I
need to see quickly and easily.
Plus, it's just nice to look at.
All right, that's going to do it for today's breakdown.
If you're interested in learning how to create high quality presentations,
like what you might see at a top consulting firm, make sure you check out
our courses at theanalystacademy.com.
Thanks for watching.