SlideMagic Blog

I had a phone call with a potential client yesterday. He needed an investor presentation but also was interested in a full business plan.

There are different documents that both are called business plan. One is a stack of files (spreadsheets, gantt charts, PowerPoint slides) that contains the company financials/budget, competitive analysis, and development mile stones. In short: real content. It does not have to look pretty.

The second one is a long document created in Microsoft Word in which market research data is copy pasted (IDC says our market is $1bn), the company opportunity is described with lots of buzz words, and so forth.

You need the first one, you can forget about the second type of business plan. They take forever to write, they take forever to iterate, and as a result they are always out of date. No one reads long written text. Brad Feld and others have called them obsolete.

My client admitted that the business plan job was simply a matter of writing up material that was already there. He was willing to invest lots of money and 2.5 months of work with a consulting firm to have the document rubber stamped, paying for the logo on the front page.

I think it is a waste of money, time, and effort. If the only thing the consulting firm does is write down stuff that already exists, investors will look right though it and judge the investment opportunity based on your content, not the way in which it is written. If it is market data you are after, pay for the market data directly, rather than by hiring a consulting firm in the middle.

A decade ago when I just started my career at McKinsey, I always was very excited when I was asked to “present the slide” to the CEO of a client. Presenting the slide: the slide was primary, the presenter was secondary. There is nothing wrong with that. When designing your slide deck, just realize that this is the audience setting you are designing for.

Look what I found in the box with drawing tools of my children: my old McKinsey exhibit rulers! I would carry these with me 24 hours a day in the 1990s. All charts were sketched by hand before being handed over to graphics assistants who would convert them into computer visuals (first overhead slides, then PowerPoint slide shows).

The sketching by hand is a really good thing. But the limited number of available shapes restricted the creativity somewhat, all charts looked very similar as a result. See that big question mark? In case you did not know the answer (yet) :-).

Waterfall charts can X-ray a complicated story. Here is an explanation about the technicalities of creating one in PowerPoint, here is an example of an application.

This PowerPoint slide by the U.S. Army is making the rounds on the Internet to ridicule ineffective presentations that stifle creativity and decision making.

The article in the NYT

does not actually talk about this busy slide specifically, it attacks the use of bullets points and the fact that the majority of time spent by staff in corporate/army headquarters is wasted on producing PowerPoint slides. Seth Godin is repeating today once more why bullet points are bad for you.

The spaghetti slide itself is not that bad, at least that is my opinion.

It makes the point that things are complex, that issues are related, all contributing to a highly unpredictable cause and effect sequence. Almost like the myth of chaos theory, and the butterfly in China that can cause a hurricane on the other side of the planet. Pretty good slide to visualize that.

I guess the source of the slide must have been some management consulting report that applied the technique of Business Dynamics to a complex problem (I recognize the many loops having used the tool in my previous life as a McKinsey consultant).

What is Business Dynamics? Business Dynamics tries to apply the physics of systems theory (electronic circuits, weather, ocean waves, etc.) to business. Complex problems consist of a number of forces. Forces influence each other. Forces can be good and bad, some cancel each other out, some reinforce each other. Everything is related to everything.

In some cases it is possible to model all these forces in a computer program and you get your hands on a very powerful tool: software can make simulations of what happens if you give the system 1 shock by studying the 2nd, 3rd, 4th, 7th order effect of your action.

McKinsey has been posting a number of classic consulting frameworks under the title “enduring ideas” on the McKinsey Quarterly site. I discussed before: consulting frameworks are great for solving problems, but often less good at communicating solutions.

Recently, the business system was discussed. At McKinsey we used it to analyse the value chain of an industry (manufacturing, sales, distribution, etc.). The basic graphic concept of it (simple arrows) can also be used in another context: communicating a project schedule. See the example below.

Related reading:

• An earlier post on the McKinsey GE 9x9 matrix
• One on the McKinsey cost curve
• One on 2x2’s

Yesterday’s post about Venn diagrams led me to a blog that I seem to be the last person on the planet to discover:Indexed. Jessica Hagy posts a napkin-style framework everyday. Sometimes funny, sometimes with a valuable insight about life or an unusual way of looking at things. Here is an example:

Venn diagrams, but especially 2x2’s, are very popular among McKinsey, BCG, Bain, and other management consultants. “We have put the world into 4 buckets, so now we understand it”.

For solving problems they are great, and I have used hundreds of them in my 17 year (oops) as a management consultant. All issues are on the map, how we can we move from one box to another?

But take a step back and think when you want to use these frameworks in a big keynote presentation. To illustrate my point: look at the drawings on the Indexed blog, and check which ones do you get in a second. Tricky isn’t it?

My advice: use these 2x2 frameworks only

1. if you want to show movement of dots in the boxes. For example you can use the same framework in a few slides to show changes in strategy, or the positioning of a company
2. if you want to highlight how your company/idea differentiates itself from the competition (by being in the top right box).

If you just need a structure to list 3 items, try to find a simpler way to visualize things.

Still, add Indexed to your RSS reader, it’s great fun.

Here is a new idea. Zen-style presentations with large images and a few words in a big font do not stand very well on their own. Maybe we should apply something from the movies: add subtitles to a PowerPoint slide.

• Crammed in a small black box that blends in with the black frame of the projector
• A small font that can be read when sitting in front of a screen, but blurs away when viewed from a distance (when a presenter is explaining the chart)
• Unlike notes pages, the text appears on the slide itself (in PDF, in SlideShare)

It’s like reading a newspaper page:

1. You read the small print under the images first
2. You read the headlines after that
3. You read the actual text last

An example below, click on an image to get a larger picture.

Interestingly, this concept is very similar to the “lead” in the ancient McKinsey exhibit format.

Another problem that would be solved by this is to make the information captured in a presentation searchable. In particular large knowledge firms (such as management consultants) struggle with archiving the knowledge that is hidden in PowerPoint presentations with little text.

Information Aesthetics is talking about visualization nostalgia. Hey, we used to have a ruler like this at McKinsey. I will continue to look for one, or a picture. They were blue, had boxes for bar/column charts and pie diagrams, and a few triangles and arrows.

The bad thing is that all your charts sort of looked the same. The good news was that, because you were trained to use this ruler, you always tried to find a graphical way to present your information, hardly ever resorting to bullet points.

A decade of strategy consulting work at McKinsey has not made me a big believer in standard frameworks. Most business problem require a tailor-made approach without the buzz words and generic statements you find in most airport business best sellers.

There is another problem with frameworks: a framework to solve a business problem is usually not the framework to communicate a business solution. Problem solving and presentation are two different things.

McKinsey’s “enduring ideas” series periodically discusses one of the classic frameworks from the world of management consulting. This month it discussed the cost curve.

• On the vertical axis you show the cost per unit
• On the horizontal axis you line up the competitors in order of their production cost
• (Unusual) you change the width of the column to reflect the production capacity of a player
• Drawing a vertical line where capacity = demand shows you what the market price of the (commodity) product will be, and who is making money/who is not.

This framework is maybe an exception. A slightly modified column chart can serve both as a problem solving tool and a communication instrument. If there is incomplete information, 3 people can spend 2 months to develop it (running all the analysis), but once it is there, it shows what’s going on in a (commodity) industry on one very insightful piece of paper (piece of PowerPoint slide).