April 4, 2023

Two Important Perspectives On Why Data Storytelling Matters

Two Important Perspectives On Why Data Storytelling Matters
April 4, 2023

As interest in data storytelling has continued to grow, some people may still question why it matters. One of the best justifications for developing this skill set came from Hal Varian, the Chief Economist at Google. In October 2008, the McKinsey consulting firm interviewed Varian to understand how he anticipated the Internet would challenge workers and managers in new ways.

After remarking how he felt statisticians would be considered a “sexy job” in the next ten years (yes, a few years before Thomas Davenport and DJ Patil labeled the data scientist as the “sexiest job” of the twenty-first century), Varian said the following:

“The ability to take data—to be able to understand it, to process it, to extract value from it, to visualize it, to communicate it—that’s going to be a hugely important skill in the next decades.”

I’ve shared this quote on several occasions, and I’ve always viewed his statement as a one-two punch: first, the ability to find meaningful insights and then followed by the skills to communicate them effectively. Today, we’re already seeing how accurate this economist’s prediction was as data storytelling was recently listed as one of the top five most in-demand tech skills for 2023 on Forbes by Bernard Marr. As more people are expected to work with numbers on a regular basis, you’re only going to see the need for this skill increase.

When people highlight the benefits of data storytelling, they usually take the perspective of the individuals who are tasked with communicating insights—the data storyteller. However, there are two key participants in every communication—the sender and the receiver.

Just like in American football where you have a quarterback who passes the ball to various receivers—both roles are important to success in the game. Sometimes, you might be the sender—the one who is crafting and sharing a data story with others. The next time you might be in the audience as a receiver—listening to someone else’s data story. Remarkably, the benefits of data storytelling are twofold when you examine it from both the sender and receiver perspectives.

The title reads, "Why data storytelling matters." A silhouette of an American football quarterback on the left. A silhouette of a wide receiver on the left. Each side lists out the respective benefits.
If you consider the benefits from both the sender and receiver perspectives, you get a more complete understanding of the value that data storytelling can provide.

Benefits for the sender (data storyteller)

Today, many business teams are tasked with analyzing the data and then communicating their findings throughout their companies. Traditionally, this responsibility would be limited to the more data-intensive teams such as finance, accounting, operations, and analytics groups. However, as data usage has become more pervasive and widespread, individuals across other functional teams—sales, marketing, human resources, and so on—are discovering the need for better data storytelling skills.

Here are some of the main benefits that this skill can offer people who are tasked with communicating insights:

  • Comprehension. When you share complex information with an audience, it can be challenging for them to process. By forming a narrative with clear visuals and sufficient context, you make your insights more concrete and accessible to other people. When it’s done right, the audience won’t misinterpret the insight and will appreciate its significance and level of urgency.
  • Memorability. Today, most audiences are already inundated with lots of information. As a result, facts and figures are shared and then quickly forgotten. However, when you weave the data points into a compelling narrative, it’s easier for audiences to retain the information and recall it in the future as they make decisions.
  • Persuasion. Sadly, the insights that fail to influence a decision or drive action generate no business value. If you’ve identified a meaningful insight, you need to convince the audience it’s something worth pursuing. A compelling data story that includes evidence-based recommendations can help motivate decision-makers to act.
  • Conciseness. Frequently, people overestimate how much information is needed by an audience to understand a topic. Attempting to be helpful and informative, you can inadvertently create a data dump that overwhelms your audience. One of the unexpected advantages of mapping your findings to a narrative is it helps identify what’s essential to the story and what isn’t, making the communication more succinct and focused.
  • Creativity. When you prepare traditional reports, you face limitations in how you can prepare and deliver the information due to standardized formats. However, when you’re crafting data stories, you have more freedom to be creative in how you communicate your messages, engage your audience, and pitch recommendations. Each insight and audience will require a unique approach that keeps the process interesting and engaging for the people crafting the stories.
  • Reputation. As you share meaningful insights in a manner that’s both clear and concise, your standing as a trusted advisor will expand within your organization. Your skills in data storytelling can lead to greater opportunities and career advancement.

Benefits for the receiver (audience)

The one-to-many relationship involved with communicating insights means receivers will always outnumber senders. While the senders who communicate insights will benefit from data storytelling, the ultimate beneficiaries are the members of their audiences (receivers). As organizations seek to become more data-driven, they increasingly need everyone to embrace data in their respective roles and responsibilities. A simple but effective way to expose more of these individuals to data is through data storytelling.

The audiences on the receiving end of the data stories will gain from the experience in the following ways:

  • Engaging. There’s a reason why our attention and interest perk up the moment someone says they’d like to tell us a story. As human beings, we crave stories and would much rather consume information that has been organized and packaged in a narrative format. If the data storyteller has done a good job with the story, the information will be both valuable and relevant to the audience. Stories can also connect with us on a deeper, emotional level than raw facts ever will.
  • Timesaving. From gathering context to identifying key findings and drawing conclusions, analysis can be a time-consuming process. It can also require both analytical skills and domain knowledge to accomplish in a reasonable timeframe. Having someone else do the heavy lifting and then guide you through the numbers will accelerate your ability to grasp what the data means and act on it with confidence.
  • Personal growth. Every data story represents an opportunity to learn more about your business. A steady diet of data stories will advance your domain knowledge as you learn more about your customers, employees, markets, processes, systems, and so on. In addition, these data narratives will further develop your data literacy skills, sparking curiosity and testing your critical thinking skills in the process.
  • Decision making. Many decisions are still based on intuition and made in a vacuum with limited perspective or context. In an increasingly complex business environment, the consequences of making poor decisions are rising. However, data stories can provide reliable data and relevant insights to managers, helping them to make better decisions. Each data story represents a self-contained, concise package of key findings, conclusions, and recommendations. They can not only enrich your own decision-making but also help gain buy-in from other leaders.
  • Accountability. While some people may resist the idea of having greater transparency within their organizations, data stories can shed light on key problems before they become serious crises. As long as the data narratives are not contorted to serve personal agendas, they can give employees and managers an accurate picture of what’s working or not working within the organization. Data stories can gradually help replace the fear of accountability with a culture of learning and continuous improvement.

If you only consider the benefits of data storytelling from a singular perspective—either the sender or the receiver—you won’t fully appreciate how it can enhance your overall organization. Ultimately, when a data storyteller communicates his or her insights in a clear, compelling way that inspires others to act and create business value, everyone in the organization wins.

Former Apple founder, Steve Jobs, once said, “The most powerful person in the world is the storyteller. The storyteller sets the vision, values and agenda of an entire generation that is to come.”

In our data age, those individuals who can weave meaningful insights into engaging data narratives will shape the trajectory of their organizations. However, success will come from both senders and receivers playing from the same playbook. This unique form of teamwork will build stronger relationships across different levels of your organization and lead to more victories on the playing field. If your firm hasn't yet embraced data storytelling, it may be time to start leaning into this critical skillset to gain its many positive benefits.

GAME PLAN: If you’d like to learn how you can become a better data storyteller, consider reading my book. If you want to learn how your team can become better data storytellers, check out my training workshop offerings. If you’d like to learn how your organization can develop a stronger data culture with data storytelling, download my free white paper.

Brent Dykes Portrait
Author - Brent Dykes
Effective Data Storytelling Book Cover

Effective Data Storytelling teaches you how to communicate insights that influence decisions, inspire action, and drive change.

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