Author: Jim Stikeleather

There is a marked dissonance between CIOs and the C-suite — a fact that we uncovered in new research conducted with HBR, The Economist, CEB, and TNS Global. We have identified the problem, which is that CEOs believe that the CIO does not understand or help with the CEO’s issues and the needs of the business. We have explored the dramatic business changes that have contributed to this dissonance, and described how the enterprise is adapting in order to keep up with the changes. Now, I’d like to address the solution to the problem by providing three simple steps CIOs can take to begin repairing the dissonance between business and IT, and guiding their organizations into the 21st century.

1. Find Your Voice in the C-Suite
To put it simply, CIOs are not engaged in the strategic decision-making that goes on at the executive level. Only 46 percent of CEOs think their CIOs understand the business. To be fair to the CIO, CEOs have created this problem by emphasizing efficiency and cost-cutting over value creation. However, time and time again, statistics show that CIO and C-suite alignment drives financial success. Economic performance for organizations whose CIOs were part of the overall development of strategy outpaced that of other organizations by a scale of two to one as discovered in our Economist and HBR studies. It is clear that CIOs must lead their organization in discovering and then providing balance between efficiency and efficacy.

Increasingly, the CIO and IT must be seen less as merely developing and deploying technology, and more as a source of innovation and transformation that delivers business value, leveraging technology instead of directly delivering it. In the end, the CIO must be responsible if technology enables, facilitates or accelerates competition that the C-suite didn’t see coming, or allows the enterprise to miss opportunities because the C-suite did not understand the possibilities technology offered.

CIOs must be an integral and vocal part of conversations on new ventures and resource allocation. The role and effect of technology should be a part of conversations on business decisions, and the CIO should have a pertinent and relevant point of view. To that end, the role of the CIO must be strategic instead of tactical.

2. Define Your Strategy
CIOs need to develop an affirmative IT strategy that begins by identifying old behaviors to give up, new behaviors to adopt, and remaining behaviors to do differently. This means a lot of change for enterprise IT organizations. CIOs will need to free up time and resources currently dedicated to traditional IT responsibilities — delivering transactions, infrastructure, technology and code — to focus more on facilitating and accelerating collaboration, choreography, orchestration, and the provisioning, management, monitoring and securing of services. These are the things that will create more value for the customer and enable the enterprise’s agility.

If you are a CIO, the starting point is to begin to standardize what you do. Decide what you should be doing — those things that create value for your customers, give you a differentiating capability, or that you can do better than anyone else — and begin to modernize them in preparation for the evolving capabilities of IT. As for everything else, either quit doing it or find someone else to do it for you.

Begin doing things differently, simplifying to make sure there is one place to get things done. Whether it is virtual or physical, there should only be one version of truth. Begin preparing for the inevitable adoption of cloud technology — virtualize everything you can, and for those things you cannot, figure out why and start making the changes to eliminate those obstacles. Extend the concepts of virtual and cloud to business processes and business models in anticipation of the future digital business ecosystems and the socially enabled enterprise.

Then, decide which tasks need to be done manually vs. automatically. Future value comes from the collaboration and creativity of people in solving problems or realizing opportunities. If the work to be done requires neither of these, then automate it.

Finally, resources and customers should not be constrained by dependence on others to be able to do their work. Organizations operate 7x24x52, work is done across organizational boundaries, and value creation is more a function of the right people, resources and ideas coming together at the right time and in the right place. Consequently, self-service and on-demand should always be a first-order design principle for any IT offering in the future. Get IT out of the way of the immediate, serendipitous opportunities that arise to create value, solve a problem or service a customer.

3. Change the Conversation in the C-Suite
As new business models take shape via technology advances, older ones will wither, and companies’ ability to survive will rest on their capacity to adapt or think outside the box. CIOs must lead the charge in getting other executives to understand that the game has changed, and explore strategies and tactics to win it and keep pace with global market changes.

Every time the C-suite decides to start a new venture — whether it’s business- or IT-related — a CIO needs to ask three major questions:

• Does it create value for the customer?
• Are we required to do it for legal or regulatory reasons?
• Are we the best in the world at it?

Only if at least one of these questions is answered “yes”, should it even be considered for action. If no answer is yes, then find a partner in your ecosystem to do it for you. Or maybe it doesn’t really need to be done.

Then, much as the IT strategy was developed, ask the members of the C-suite to identify old behaviors to give up, new behaviors to adopt, and behaviors to do differently. This will also mean dramatic change for the enterprise, but old strategies and processes that were time-consuming and didn’t create value need to be automated, outsourced or eliminated to make room for new strategies and processes that encourage collaboration, innovation, and value for the customer. Gary Hamel maintains that the key to future success is management innovation. It has to come before technology innovation, product innovation, operational innovation, and all the other areas where we eventually must innovate. It is the CIO, who knows both the business and the technology, who should best understand what, where and how technology can enable, facilitate and accelerate management innovation and therefore lead the enterprise in its pursuit.

In a time of increasing business and economic change, the role of the CIO and IT is changing in exciting ways. As Seth Godin has said, “Change almost never fails because it’s too early. It almost always fails because it’s too late.” The time to get ready for that change is now.

Many organizations are approaching the tipping point being described in this series of blogs. Stepping into the role of strategic visionary and business driver requires CIOs to have a completely new conversation with their C-suite colleagues. To begin the conversation, Dell, HBR and CIO magazine are sponsoring a Harvard Business Review panel discussion, “Change the Conversation, Change the Game,” through a webinar, broadcasting live from The CIO Leadership event in Boca Raton, Florida May 5-7, 2013.

As we all know, the very nature of the enterprise is changing. This is the result of the rapid shifts that have been occurring in the business world over the last few years–the commoditization of goods and services, the individuation of value, the transformation of the workforce–which I discussed in my previous blog post . In order to keep up with these changes and to succeed, future enterprises will need to have three clear characteristics: They will be socially enabled; they will operate as digital business ecosystems, offering innovative services and products as rapidly and inexpensively as possible; and they will view innovation not as an optional advantage, but as the only advantage.

This is very different from the way large businesses have operated for decades. Originally, business consisted of neighbors exchanging the products of their labors, dedicated craftsmen travelling from town to town, and localized general stores. Eventually, businesses became department stores, specialty stores and malls, and finally, today’s e-businesses and networked organizations that support them. Traditionally, they have been hierarchical, fixed, integrated, transaction-based and risk averse. Only a small percentage came up with anything that was truly innovative.

Tomorrow’s businesses will have a very different make-up, and the CIO must lead the charge in the face of these changes. As Erik Brynjolfsson said, to succeed in the future, “We must reinvent our organizations and our whole economic system.”

What does it mean to be a socially enabled enterprise?
Companies are comprised of business units, work groups, communities of practice, and alliances with suppliers, partners and customers. The role of management can be broadly thought of as the processes that tie these components together to produce value. Until now, the goal has been to standardize and optimize transactions among these components to reduce costs and achieve efficiency. Most of these benefits have been achieved.

Now, management needs focus on enabling and optimizing the connection, communication and collaboration between employees, customers, and partners. As those new dynamic business networks form (and dissolve) management moves from trying to plan and direct them towards preparing and mentoring them on the challenges the business faces; staff and control them to engaging their participants and framing their interactions; impose structure and authority to encouraging activity and direction to emerge.

This will lead to new business models, new processes, more meaningful business interactions, innovation, improved and faster decision making, and a more agile organization. Companies that fail to facilitate these interactions will stagnate with old processes and strategies, and eventually fail.

What does it mean to operate in a digital business ecosystem?
A digital ecosystem is a business community of organizations and individuals transacting across a distributed, adaptive, open, social, technical system with collaboration, transparency, constant evolution, self-organization, scalability and sustainability. This is not a new idea. Each participant focuses on its customers (including members of the ecosystem) and what it does best while distributing all other enterprise activities dynamically and fully to other participants, in order to deliver value to each other’s customers with rapidity and agility. In the same way that markets have always outperformed command economies, the transactional efficiencies possibly lost are more than made up for by the ecosystems value effectiveness.

Digital business ecosystems dynamically create and operate value chains that extend their participants’ markets. This allows the smallest of firms to compete globally with the largest of firms. The European Commission believes that digital business ecosystems are critical to Europe’s future competitive ability, and the key to realizing “this promise of fostering the development of those technologies, systems, applications and services that are critical to achieving higher growth, more and better jobs, and greater social inclusion.” Also, the concept of digital business ecosystems has drawn more academic business, economics, process, scientific, mathematic, systems theory, and engineering attention than any other business idea.

What does it mean to view innovation as the only competitive advantage?
The nature of competition is changing. With the evolution of cloud computing, even the smallest, least-funded organization in an out-of-the-way town can appear and deliver like the largest. Any need or demand can and will be met faster than ever. Traditional economic frictions and barriers to market entry are disappearing. The downplayed downside of this convenience is that there is usually no long-term profit from such ventures.

When enterprise value propositions are racing to the bottom, commodization, and the limits of efficiency driven margins, there is one form of profit left: monopoly profits. Those moments in time when you have an offering that no one else has — a unique value proposition. Such propositions come from innovation. This is why innovation is so important and takes up so much room in press and annual reports. Innovation is the key to the future — innovation in business models, business processes as well as products and services. Only innovation can break the chains of commoditization that a global and frictionless economy encourages. Innovation is the only insurance against irrelevance. It’s the only antidote to margin-crushing competition, the only hope for out-performing the economy, and the only way to truly amaze and delight your customers.

The Rise of the CIO
CEOs don’t think CIOs understand the business, and how to apply IT in new ways to benefit the business. CIOs must become aware of the changes in the business world and the enterprise and how these changes are affecting the roles in the C-suite and their own leadership role. They must then help lead the enterprise’s evolution to a socially enabled environment and a digital business ecosystem, and provide the platform upon which innovation is encouraged, nurtured and manifested.

But CIOs also need to not get caught up in the technology trap. Changing technology alone will not cause the changes discussed here; changing management will. The CIO’s role becomes one of helping management change by supplying vision, direction and supporting technology. Gary Hamel asserts that management innovation is the critical component and starting point for all innovation-in terms of operations, technology, product, strategy, etc. He also identifies many validating examples, including the history of consistent military competitive advantage: those able to break with the past and imagine new ways of motivating, staffing, training and deploying warriors. The key is not size, scale, technology, tactics or strategy — though each provides transient advantage for a short time. Adaptable, agile management above all sustains competitive advantage.

The contribution of CIOs to all this is to rise up and enable, facilitate and accelerate its uptake by their organization. It is the CIO who is the one person in the organization to best understand how it operates, since every transaction passed through his or her systems. It is the CIO who best understands where the technology is going and how it can be applied, both to develop new methods for generating existing value, and to old methods to generate new value. Therefore, it is the CIO who should guide and mentor the rest of the organization into its 21st century model. In the last post of this series, I will explore how exactly the CIO should begin this process.

Many organizations are approaching the tipping point being described in this series of blogs. Stepping into the role of strategic visionary and business driver requires CIOs to have a completely new conversation with their C-suite colleagues. To begin the conversation, Dell, HBR and CIO magazine are sponsoring a Harvard Business Review panel discussion, “Change the Conversation, Change the Game,” through a webinar, broadcasting live from The CIO Leadership event in Boca Raton, Florida May 5-7, 2013.

We know there’s dissonance between corporate IT and the C-suite. New research, conducted with HBR, The Economist, CEB, and TNS Global, reveals that CEOs believe CIOs are not in sync with the new issues CEOs are facing. CEOs also tell us that CIOs do not understand where the business needs to go and how IT should support strategic goals. The dissonance is due to the changes in the business world, and the resulting second- and third-order effects on IT. CIOs need to be aware of these changes in order to keep in step with their business leaders:

1. Goods and services are becoming rapidly commoditized. The natural cycle of products through diminished economic frictions and supply/demand curves approaching equilibrium are causing decreasing margins, so executives desperately seek new ways to differentiate their company, products and services. But even though they know they must innovate in response, they don’t know how to do so in the complex global market.
2. Traditional products are simply becoming windows into information-based, services-delivered value. The value of a cell phone is more based on its app ecosystem than its function and features. Running shoes are differentiated by their sensors and supporting web analytics and user networks. 3D printers email themselves updates which they then print out for their user to install. Toys become total ecosystems of innovation, collaboration and adaptation.
3. Barriers to entry have been destroyed. The same diminished economic frictions, along with new business models, organizational structures and enabling technologies, have accelerated the appearance of new, unanticipated competitors with new value propositions or the old value propositions presented faster, better and/or cheaper. So business leaders relentlessly drive down costs to maintain share.
4. Value is becoming highly individuated. This is a consequence of introducing the horizontal enablement of social media, where value is a function of time, place, participants and other factors beyond the control of supplier individuals or organizations. Value is not just financial; it is also social and emotional. The transaction is less about money exchange than it is the co-created experience and engagement. Witness the “apps marketplaces” with apps that generate thousands of new, instantaneous value creation events and profits through collaboration (e.g. the “liking” on Facebook of a new restaurant may cause five friends to visit it for lunch that day).
5. The nature of competition is changing. With the evolution of cloud computing, even the smallest, least-funded organization in an out-of-the-way town can appear and deliver like the largest global entity. Today, I can have a new idea, sketch it out using world-class design software via the cloud, find and route it to the best possible prototype manufacturer anywhere in the world who will produce it using 3D printers, and have it delivered to my door via FedEx. If it turns out the idea has legs, I can do everything from crowdsource business plans to turn my customers into a superior support organization through companies with self-service web sites–from the comfort of my desk and with my personal credit card. The companies enabling these capabilities, such as InnoCentive, Tongal, 99designs, TopCoder and Kickstarter, are being used by organizations large and small. This is great for the consumers of world: Any need or demand can and will be met faster than ever. It is challenging, to say the least, to existing enterprises.
6. The nature of the workforce and management is shifting. The business and economic landscape has shifted from industrialization and its focus on reliability, predictability, discipline, alignment, control, repetition, scale, and efficiency, to value creation and its focus on originality, adaptability, innovation, engagement, collaboration and efficacy. As a result, the nature of work and the workforce is changing. Many of our assumptions about what motivates and dissuades people are wrong-especially when knowledge, creativity and innovation are desired. Management is trying to adapt to these new realities of the workforce.

Outcomes
As a reaction to these business changes, the enterprise is beginning to respond in a number of ways:

1. Outsourcing services. We are at the early stages of seeing large organizations outsource specific services such as HR, accounting, payroll, and IT support while breaking themselves up into smaller, more agile enterprises to address specific markets, geographies, or customers. Interestingly, even employees are starting to pursue this path, preferring to be independent and focused on delivering value rather than feeding an organizational structure.
2. More partnerships. We are starting to see more relationships among organizations (and even among competitors) in order to better serve customers. Think of the interesting ecosystem among Apple, Google, Amazon, Yahoo and even Microsoft with their mobility businesses, apps and services sharing each others’ capabilities in order to better engage and serve customers. It is better to be highly focused and utilize other, highly focused firms (even your competitors and other customers) to service your customers’ needs rather than to try and do it all yourself. Otherwise, you lose flexibility, agility, adaptability, and even scale economics begin to reverse. Finding other enterprises that can add value to my value (and vice versa) is the key to responsiveness, individualization, and meeting the market’s needs in the moment.
3. A focus on customers. Organizations are starting to realize that they should zero in on what creates value for customers, and what they are better at than anyone else. Then become someone else’s customer for everything else. As Peter Drucker said, “There is nothing quite so useless, as doing with great efficiency, something that should not be done at all.”
4. Structural changes. Future successful enterprises will be socially enabled, and they will operate as digital business ecosystems–very different from contemporary hierarchical, fixed, integrated, transactional structures of today. Both of these characteristics are necessarily, but not sufficiently, driven by the CIO.

CIOs must be aware of the changes in the business world and the enterprise, and how these changes are affecting the roles in the C-suite and their own leadership role. How we run companies today can best be described in a phrase I have heard many times from many sources: “Maximize efficiency by minimizing deviations from standard practices.” But to succeed in the new business environment, enterprises must be more than well-oiled machines; they must also be adaptive and innovative. How to get there is the next topic.

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Many organizations are approaching the tipping point being described in this series of blogs. Stepping into the role of strategic visionary and business driver requires CIOs to have a completely new conversation with their C-suite colleagues. To begin the conversation, Dell, HBR and CIO magazine are sponsoring a Harvard Business Review panel discussion, “Change the Conversation, Change the Game,” through a webinar, broadcasting live from The CIO Leadership event in Boca Raton, Florida May 5-7, 2013.

It has been a while since I was a parent of teenagers, but I remember when the question, “Have you had the conversation yet?” made me break out in cold sweats. The Conversation is also a 1974 film by Francis Ford Coppola whose themes include the role of technology in society and being so focused on what you are doing that you forget why you are doing it and become oblivious to what is happening around you. Both examples fit the conversation that should be going on in the C-suite, but isn’t, because it makes people nervous, and because people lose visibility and perspective of what is changing around them as they focus on their goals. It is a conversation about the increasing importance of information technology and the role it must assume in every enterprise, regardless of size, industry or geography.

Over the last two years, we have been engaged in primary research with The Harvard Business Review, The Economist, CEB (formerly known as the Corporate Executive Board), Intel, and TNS Global in an attempt to paint a picture of how the role of the CIO and the IT department is changing. We also engaged with CIOs across the globe in discussions about what they were experiencing and what changes were surprising or bewildering them.

A simple summary of the work suggests that CEOs believe that CIOs are not in sync with the new issues CEOs are facing, CIOs do not understand where the business needs to go, and CIOs do not have a strategy, in terms of opportunities to be pursued or challenges to be addressed in support of the business.

Key findings from our research:

• Almost half of CEOs feel IT should be a commodity service purchased as needed
• Almost half of CEOs rate their CIOs negatively in terms of understanding the business and understanding how to apply IT in new ways to the business
• 57% of the executives expect their IT function to change significantly over the next three years, and 12% predict a “complete overhaul” of IT
• Only a quarter of executives felt their CIO was performing above his or her peers

Our observations:

• CEOs are demanding more visible value from their CIOs, in terms of generating revenue, gaining new customers, and increasing customer satisfaction.
• Increasingly, the CIO and IT must be seen less as developing and deploying technology, and more as a source of innovation and transformation that delivers business value, leveraging technology instead of directly delivering it.

• The CIO must be responsible and accountable if technology enables, facilitates or accelerates competition that the C-suite didn’t see coming, or allows the enterprise to miss opportunities because the C-suite did not understand the possibilities technology offered.
• CIOs today must adapt or risk being marginalized.

Why this is happening:
As we worked with the data, while we saw what was happening it became clear we were missing the “why” it was happening. Why is this dissonance between the CIO and the C-suite happening? It could be the rapid pace of technological change, but historically that only facilitates or accelerates change already desired or underway? The more we looked for an answer, the more we realized we were at an impasse. Then we realized that what we were seeing were not changes in IT, but secondary effects from changes going on in business.

In order to understand the future of enterprise IT, the evolving future of business itself must be considered.

Trends that are affecting fundamental concepts of business, and in turn IT:

• The basic ideas of capitalism–return on investment (ROI) and return on assets (ROA)–are being challenged by the historical stalwarts of capitalism (Harvard, Drucker Society, Forbes, the London School of Economics and many more). Many of these ideas shun ownership for rent on those elements of the enterprise not tied directly to value creation, suggesting a rethink in how IT is delivered.
• As we transform from industrial work more easily and efficiently done by robots to creative and knowledge work leveraging humans, we are balancing the values of scale and efficiency (industrial work) with the need for agility and efficacy (creative and knowledge work). This means that transactional systems that ensured security, encouraged conformance and drove operational goals of predictability and productivity lose value to new systems of collaboration, transparency and agility.
• The nature of economics is transforming as complexity science and behavioral science provide valuable insights about how value is created, markets work and buyers think. The nature of value which is momentarily created and quickly perished in turn drives the new economics as it diverges from classical ideas of value chains. As a consequence, the boundaries between customers, suppliers, partners, staff, contractors, channels and even competitors begin to diminish and even disappear, creating a whole new user community for enterprise IT systems.
• All of these ideas are drastically changing how we organize to accomplish the necessary work, and in turn how we manage those organizational structures and resources. This suggests more unique, highly focused niched application systems with integration of information and systems across organizational and agent boundaries – no IT system is an island.

How this affects the CIO and enterprise IT:
All of this is changing the role of the CIO before our very eyes. Not only are there new systems, business and delivery models, types of information, technologies, etc., but whole new roles for IT in the enterprise’s ecosystem. These new business insights, tied to the emergence of new technologies, are creating an opportunity for IT to lead business transformational efforts, creating new business models, initiating new business processes and making the enterprise agile in this challenging economic environment.

Leveraging that change requires starting with a conversation that CIOs, CEOs and the rest other members of the C-suite should be having, but aren’t. Here’s a start to that conversation.

In future pieces, I will explore the dramatic business changes and challenges that are affecting the C-suite and the role of the CIO; look at how innovation, as the only way to create long-term profit, provides a solution to these challenges; and outline the new conversation that CIOs should be having in the C-suite.

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Many organizations are approaching the tipping point being described in this series of blogs. Stepping into the role of strategic visionary and business driver requires CIOs to have a completely new conversation with their C-suite colleagues. To begin the conversation, Dell, HBR, and CIO magazine are sponsoring a Harvard Business Review panel discussion, “Change the Conversation, Change the Game,” through a webinar, broadcasting live from The CIO Leadership event in Boca Raton, Florida May 5-7, 2013.

An excellent visualization, according to Edward Tufte, expresses “complex ideas communicated with clarity, precision and efficiency.” I would add that an excellent visualization also tells a story through the graphical depiction of statistical information. As I discussed in an earlier post, visualization in its educational or confirmational role is really a dynamic form of persuasion. Few forms of communication are as persuasive as a compelling narrative. To this end, the visualization needs to tell a story to the audience. Storytelling helps the viewer gain insight from the data. (For a great example, how much do you think steroids have influenced baseball?)

So how does a visual designer tell a story with a visualization? The analysis has to find the story that the data supports. Traditional journalism does this all the time, and journalists have become very good at storytelling with visualization via infographics. In that vein, here are some journalistic strategies on telling a good story that apply to data visualizations as well.

1. Find the compelling narrative. Along with giving an account of the facts and establishing the connections between them, don’t be boring. You are competing for the viewer’s time and attention, so make sure the narrative has a hook, momentum, or a captivating purpose. Finding the narrative structure will help you decide whether you actually have a story to tell. If you don’t, then perhaps this visualization should support exploratory data analysis (EDA) rather than convey information. However, for the designer of an exploratory visualization it is still important to spark the viewers’ imagination to encourage examining relationships among and facilitate interacting with the data – think gameification.
2. Think about your audience. What does the audience know about the topic? Is it meant for decision makers, general interested parties, or others? The visualization needs to be framed around the level of information the audience already has, correct and incorrect:
• Novice: first exposure to the subject, but doesn’t want oversimplification
• Generalist: aware of the topic, but looking for an overview understanding and major themes
• Managerial: in-depth, actionable understanding of intricacies and interrelationships with access to detail
• Expert: more exploration and discovery and less storytelling with great detail
• Executive: only has time to glean the significance and conclusions of weighted probabilities
3. Be objective and offer balance. A visualization should be devoid of bias. Even if it is arguing to influence, it should be based upon what the data says–not what you want it to say. Tufte found numerous charts that misled viewers about the underlying data, and created a formula to quantify such a misleading graphic called the “Lie Factor.” The Lie Factor is equivalent to the size of the effect shown in the graphic, divided by the size of the effect in the data. Sometimes it is unintentional-a number that is three times bigger than another will be perceived nine times bigger if represented in 3D. There are simple ways to encourage objectivity: labeling to avoid ambiguity, have graphic dimensions match data dimensions, using standardized units, and keeping design elements from compromising the data. Balance can come from alternative representations (multiple clustering’s; confidence intervals instead of lines; changing timelines; alternative color palettes and assignments; variable scaling) of the data in the same visualization. Maintaining objectivity and balance is not a trivial effort and is easily unintentionally violated. Viewers and decision makers will eventually sniff out inconsistencies which in turn will cause the designer to lose trust and credibility, no matter how good the story.
4. Don’t Censor. Don’t be selective about the data you include or exclude, unless you’re confident you’re giving your audience the best representation of what the data “says”. This selectivity includes using discrete values when the data is continuous; how you deal with missing, outlier and out of range values; arbitrary temporal ranges; capped values, volumes, ranges, and intervals. Viewers will eventually figure that out and lose trust in the visualization (and any others you might produce).
5. Finally, Edit, Edit, Edit. Also, take care to really try to explain the data, not just decorate it. Don’t fall into “it looks cool” trap, when it might not be the best way explain the data. As journalists and writers know, if you are spending more time editing and improving your visualization than creating it, you are probably doing something right.

Now that we’ve discussed when data visualization works — and when it doesn’t, let’s delve into what makes a successful data visualization. Although there are a number of criteria, including ease of comprehension and aesthetics, I’d like to explore the three that designers most often overlook.

1. It understands the audience.

Before you throw up (pun intended) data in your visualization, start with the goal, which is to convey great quantities of information in a format that is easily assimilated by the consumers of this information — decision-makers. A successful visualization is based upon the designer understanding whom the visualization is targeting, and executing on three key points:

• Who is the audience, and how will it read and interpret the information? Can you assume it has knowledge of the terminology and concepts you’ll use, or do you need to guide it with clues in the visualization (e.g., indicated good is up with a green arrow)? An audience of experts will have different expectations than a general audience.
• What are viewers’ expectations, and what type of information is most useful to them?
• What is the visualization’s functional role, and how can viewers take action from it? An exploratory visualization should leave viewers with questions to pursue; educational or confirmational visualizations should not.

2. It sets up a clear framework.
The designer needs to ensure that everyone viewing the visualization is on common ground about what it is representing. In order to do so, the designer needs to set up a clear framework, which involves the semantics and syntax under which the data information is designed to be interpreted. The semantics involve the meaning of the words and graphics used, and the syntax involves the structure of the communication. For example, when using an icon, the element should bear resemblance to the thing it represents, with size, color and position all communicating meaning to the viewer.

Lines and bars are simple, schematic geometric figures that are an integral component of many kinds of visualizations: lines connect, suggesting a relationship. Bars, on the other hand, contain and separate. In studies, when people have been asked to interpret an unlabeled line or bar graph, people overwhelmingly interpreted lines as trends and bars as discrete relations — even when conflicting with the nature of the underlying data.

There is one other element to the framework: Before everything else, make sure your data is clean and you understand its nuances. Does your data set have outliers? How is it distributed? Where does your data have holes? Are you making pre-judgments about the data? Real-world data is often complex, of diverse types from diverse sources, and not always reliable. Getting to know your data will help you select and appropriately use a framework.

3. It tells a story.
Visualization in its educational or confirmational role is really a dynamic form of persuasion. Few forms of communication are as persuasive as a compelling narrative. To this end, the visualization needs to tell a story to the audience. Stories package information into a structure that is easily remembered which is important in many collaborative scenarios when an analyst is not the same person as the one who makes decisions, or simply needs to share information with peers. Data visualization lends itself well to being a communication medium for storytelling, in particular when the story also contains a lot of data. Minard’s graphic of Napoleon’s march on Moscow in 1812 is an exemplar. With newer technology freeing designers from the paper-based paradigm of images, even more compelling narratives can be constructed.

Storytelling helps the viewer gain insight from the data. Information visualization is a process that transforms data and knowledge into a form that relies on the human visual system to perceive its embedded information. The goal is to enable the viewer to observe, understand and make sense of the information. The difference between information visualization and traditional storytelling in film, theater or television is that the information and story conveyed in information visualization environments are much more complicated. Design techniques that prioritize particular interpretations in visualizations that “tell a story” can significantly affect end-user interpretation.

Visualization designers need to dig into the data in order to gain an understanding of it, and also to connect with the visualization’s audience. Good designers know not just how to pick the right graph and data range, but how to be a compelling storyteller through the visualization.

I am uncomfortable with the growing emphasis on big data and its stylist, visualization. Don’t get me wrong — I love infographic representations of large data sets. The value of representing information concisely and effectively dates back to Florence Nightingale, when she developed a new type of pie chart to clearly show that more soldiers were dying from preventable illnesses than from their wounds. On the other hand, I see beautiful exercises in special effects that show off statistical and technical skills, but do not clearly serve an informing purpose. That’s what makes me squirm.

Ultimately, data visualization is about communicating an idea that will drive action. Understanding the criteria for information to provide valuable insights and the reasoning behind constructing data visualizations will help you do that with efficiency and impact.

For information to provide valuable insights, it must be interpretable, relevant, and novel. With so much unstructured data today, it is critical that the data being analyzed generate interpretable information. Collecting lots of data without the associated metadata — such as what is it, where was it collected, when, how and by whom — reduces the opportunity to play with, interpret, and gain insights from the data. It must also be relevant to the persons who are looking to gain insights, and to the purpose for which the information is being examined. Finally, it must be original, or shed new light on an area. If the information fails any one of these criteria, then no visualization can make it valuable. That means that only a tiny slice of the data we can bring to life visually will actually be worth the effort.

Once we’ve narrowed the universe of data down to those that satisfy these three requirements, we must also understand the legitimate reasons to construct data visualizations, and recognize what factors affect the quality of data visualizations. There are three broad reasons for visualizing data:

• Confirmation: If we already have a set of assumptions about how the system we are interested in — for example, a market, customers, or competitors — operates, visualizations can help us check those assumptions. They can also enable us to observe whether the underlying system has deviated from the model we had and assess the risk of the actions we are about to undertake based upon those assumptions. You see this approach in some enterprise dashboards.
• Education: There are two forms of education that visualization offers. One is simply reporting: here is how we measure the underlying system of interest, and here are the values of those measures in some comparative form — for instance, over time, or against other systems or models. The other is to develop intuition and new insights on the behavior of a known system as it evolves and changes over time, so that humans can get an experiential feel of the system in an extremely compressed time frame. You often see this model in the “gameification” in training and development.
• Exploration: When we have large sets of data about a system we are interested in and the goal is to provide optimal human-machine interactions (HMI) to that data to tease out relationships, processes, models, etc., we can use visualization to help build a model to allow us to predict and better manage the system. The practice of using visual discovery in lieu of statistics is called exploratory data analysis (EDA) and too few businesses make use of it.

Assuming the visualization creator has gotten it all right — a well-defined purpose; the necessary and sufficient amount of data and meta data to make the visualization interpretable; enabling relevant and original insights for the business — what gives us confidence that these insights are now worthy of action? Our ability to understand and to a degree control three areas of risk can define the visualizations’ resulting value to the business:

• Data quality: The quality of the underlying data is crucial to the value of visualization. How complete and reliable is it? As with all analytical processes, putting garbage in means getting garbage out.
• Context: The point of visualization is to make large amounts of data approachable so we can apply our evolutionarily honed pattern detection computer — i.e., our brain — to draw insights from it. To do so, we need to access all of the potential relationships of the data elements. This context is the source of insight. To leave out any contextual information or metadata (or more appropriately, “metacontent”) is to risk hampering our understanding.
• Biases: The creator of the visualization may influence the semantics of the visualization and the syntax of the elements of the visualization via color choices, positioning, and visual tricks (such as unnecessary 3D, or 2D when 3D is more informative) — any of which can challenge the interpretation of the data. This also creates the risk of “pre-specifying” discoverable features and results via the embedded algorithms used by the creator (something EDA is intended to overcome). These in turn can significantly influence how viewers understand the visualization, and what insight they will gather from it.

Ignoring these requirements and risks can undermine the visualization’s purpose and confuse rather than enlighten.