How one can produce an insight that offers understanding?

Authentic insights should be contextualized to maximise their impact and comprehension. Context enriches the narrative driven by data. Six methods to infuse insights with context include:

1. Comparative context: compare product sales monthly or juxtapose actual costs against a budget or last yr’s same period.
2. Scale Adjustment: highlight the cumulative impact over time or break down annual advantages into monthly or weekly gains for a more tangible perspective.
3. Equivalence: aid comprehension through the use of familiar examples. As a substitute of stating: ‘your smartphone has 128GB storage’, mention ‘it will probably store 25,000 photos*’.
4. Historical context: display performance trends, considering seasonal or cyclical influences. All the time compare whole periods.
5. Informational context: offer details about patterns or anomalies without presuming correlation implies causation.
6. Data validation: enhance trustworthiness by citing data sources, collection methods, and timeliness [5].

Secondly, never accept the initial conclusion, especially when employing LLMs for evaluation. Delve further until the conclusions resonate with real insight.

Third, trigger the spark. And the simpler tool you employ, the more likely is that it’ll occur. Even when the technique employed seems easy. Remember what Archimedes said:

Give me a spot to face, and I’ll move the earth.

Below, I present some analyses executed using a basic tool like Excel. While these analyses are straightforward, they’ll yield invaluable insights, potentially serving as a foundation for deeper exploration with more sophisticated programs or techniques.

The initial chart illustrates the fluctuations in the client confidence index over a yr, analyzed using Excel. As evident from the trend line and accompanying linear regression equation, the overarching trend is downward. Notable dips occurred during events just like the C-19 lockdown and the outbreak of war in Ukraine. Currently, the trend is on an upward trajectory.

One other evaluation, also conducted in Excel, aids in identifying peculiarities inside the distribution of results. By employing a basic histogram chart, we are able to pinpoint outlying values and assess any irregularities within the frequency distribution. As an example, what might initially appear as a single distribution could, in point of fact, be three distinct ones, as demonstrated in the next example:

The ultimate evaluation, also performed in Excel, involves adding a trend line to a chart. This tool allows for the appliance of varied functions, each linear and non-linear, together with the regression equation. Furthermore, one can assess the fit’s accuracy using the R-squared estimate.

How can we make insights more specific and meaningful?

Insights should be intrinsically linked to core business objectives and strategic initiatives. The stronger this connection, the less likely these insights will go neglected.

Broadly, there are two sorts of indicators:

• KPIs (Key Performance Indicators)
• KCIs (Key Conceit Indicators).

If an indicator proves difficult to reply to, whatever the magnitude of its change, it’s likely a KCI — widely monitored inside a corporation but lacking in actionable value. Conversely, insights related to KPIs can instill a real sense of urgency, driving decision-making and motion.

The closer a KPI aligns with corporate strategy, the more naturally it translates into tactical responses, as these are directly connected to pivotal business components.

KPIs should be deeply embedded inside the company’s DNA, spanning from top leadership to back-office employees. The balanced scorecard might be instrumental in disseminating targets and metrics across every division. By nurturing roles that seamlessly connect management, finance, and data science, a unified approach to focus on realization emerges. Emphasize business partnering across all areas of the organization, from sales to accounting. For suitable organizations, adopting agile management structures can enhance this integrated strategy.

How insight can prompt decisions and actions?

The initial step involves embracing the art of information storytelling. Communicating insights should evolve beyond merely presenting intricate tables to decision-makers. Such an approach risks overwhelming them, prompting them to disengage.

Effective data storytelling stands on three tenets:

1. Understanding context: recognizing what drives our audience.
2. Employing narrative structure: implementing elements just like the storytelling arc [6].
3. Utilizing effective visuals.

What constitutes an efficient visual? Primarily, it must be clear and never confuse the audience. Hence, I advocate for the usage of these three chart types:

For chart selection, use column or bar charts when comparing aggregated values like budget versus actual. A line chart is your go-to for analyzing trends. And in case you’re trying to know how an element pertains to the entire, a pie chart is right. These three chart types will likely cater to around 80% of your visualization needs unless there’s a particular scenario like cohort evaluation**.

When designing your charts, it’s essential to eliminate any clutter. Remove extraneous elements like frames, support lines, and unnecessary data points, which might distract from the essential message. Consider color and text as strategic tools in your arsenal; they must be used to emphasise and highlight key information, not only to beautify the chart.

All the time be in tune along with your audience. Test your visuals, see what works and what doesn’t, and adjust accordingly. This iterative process is vital to constructing a mutual understanding and ensuring your data tells a compelling story.

Lastly, ensure your narrative flows naturally. Avoid derailing your audience’s attention with unnecessary and extensive suspense. Evaluate your storytelling using methods just like the 3-minute story or the Big Idea [7]. As an example, I vocalize my narratives, be it articles or presentations. If I can articulate the story easily, it boosts my confidence in its resonance with the audience. When you’ve won their attention, introduce key conclusions and call to motion. You should definitely do this right after the story’s climax — that’s after they’re most engaged and receptive. Nevertheless, if reservations arise, prioritize lively listening. Address any uncertainties, and if needed, suggest collaborative follow-up activities to foster understanding.

Conclusions

In this text, I walk through my method for crafting powerful insights. These aren’t just any insights; they’re the type that guides businesses toward smart decisions. When used right, these insights might be game-changers, helping corporations tackle tough situations or make the most of great opportunities. Having the correct data or the perfect tools isn’t the entire story. How we share and explain these insights is just as crucial. It’s all about ensuring the message hits home, gets people pondering, and motivates them to act. Ultimately, the most useful insights are people who result in meaningful motion and transformation.

*Assuming a mean photo size of 5MB and 120GB of effective space on the smartphone

**Writer’s subjective assessment

[1] Wikipedia, Compound Chocolate

[2] Martinko, Katherine, What Does Cacao Percentage Mean on a Chocolate Bar?, February 6, 2021

[3] Szudejko, Michal, From Numbers to Actions: Making Data Work for Firms, August 14, 2023

[4] Hürtgen, Holger and Mohr, Niko, Achieving business impact with data, April 27, 2018

[5] Dykes, Brent, Contextualized Insights: Six Ways To Put Your Numbers In Context, October 18, 2018.

[6] Apple Podcasts, Narrative Arc: The Missing Tool in Your Data Stories with Brent Dykes, 2021.

[7] Nussbaumer Knafflic, Cole, Storytelling with Data, Wiley, 2015.