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Why Data Visualization Is Key To Understanding Performance

Data visualization can help your company see the big picture and make better decisions. Learn about common methods and the results that accompany them.

Tyrese Griffin
Dec 16, 202317157 Shares231856 Views
We live in a data-driven world. This means that making informed decisions—and being able to make them quickly—is more important than ever.
This is no easy task. Navigating raw data, even when organized into stately rows and columns on a spreadsheet, could make you feel like you’re drowning in a sea of information. Below, we’ll throw you a life preserver—that of data visualization.

What Is Data Visualization?

Data visualization transforms abstract numbers into easily discernible patterns, trends, and insights. For example, you might struggle to identify sales trends by leafing through pages of numbers on a spreadsheet. But if you transfer that data to a line graph, you can easily see where sales are increasing or decreasing over time.
Just as key performance indicators (KPIs) on your resumehelp your future employer to make an informed decision about hiring you, so do data visualizations inform good decision-making. The visualizations help those who are responsible for making choices to see the big picture—what happened in the past, what’s happening now, and what trends may continue into the future.
Data visualization is not just about aesthetics, but appearances do play a role. Eye-catching, appealing, and easy-to-understand visualizations are inviting to employees and consumers alike. Well-crafted charts or infographics demystify difficult concepts and huge, mind-blowing data sets. They make information attainable. However, the prettiness of infographics should not be prioritized over the accuracy of data.

Common Data Visualization Tools

Below are some of the most commonly used data visualization tools. If you’re not already, try using one or more of them during your next meeting or presentation.

Line Graph

Line graphs chart points along an X and Y axis, the X axis often being time. The points are then connected using straight lines to indicate relationships between the points. This type of graph is especially useful for visualizing changes over time, as exemplified above.

Bar Charts

A bar chart or bar graph may be the most familiar form, and you may have drawn these at school in math class. It compares the values of different categories of data. Each set is represented by a discrete rectangular bar. These are easy to generate in spreadsheet software and you can choose the colors and other visual features to customize your chart.

Scatter Plots

Scatter plots mark data points on an X and Y axis. Unlike a line graph, however, the points are not connected by a line. Instead, the location of the points reveals hidden relationships between variables, including statistical outliers.

Pie Chart

Pie charts show all the parts of a whole—how assets and resources are distributed or how customer demographics are divided, for example. Visually, it is a circle with triangular pie slices within it. These chunks are often labeled with percentages or numbers, so the data part is not totally left out. Again they can be easily generated in spreadsheet software.


Heatmapsuse color coding to represent different values. Heatmaps look a bit like a weather forecast map. In fact, the visuals often follow the same color scheme as that used for the intensity of rain and storms. They can pinpoint areas of engagement as well as potential friction points.

Data Visualization and Return on Investment

Analyzing data and organizing it into a visual format isn’t free, but it comes with a profitable return on investment (ROI). Research confirms that good data visualization improves efficiency, reduces employee errors, helps with online marketingcampaigns, and enhances the flow of communication. The allocation of resources can be managed optimally, and decision-makers are better equipped for hard choices in a changing economy.

The Human Value of Data Visualization

Data visualization could be referred to as “narratives with numbers.” They tap into the ways we take in and process information, our visual perception and our psychology. They can inspire action, captivate audiences, and even drive genuine change for the better. Economically, this translates to more sales and increased consumer loyalty.
Furthermore, data literacy—the ability to understand and interpret data—is becoming a crucial skill for all. Data democratization—making it both accessible and actionable for people at all levels of technical expertise—can be accomplished at least in part through data visualization. This helps consumers to understand business performance and make informed purchasing decisions.
Here’s a simple comparison of the importance of this understanding and access. In Medieval Europe, many of the “common people” could not read. Important resources, such as the blacksmith, the baker, or the butcher’s shop, were marked by pictograms instead of or in addition to written words. Iconographywas also used in churches and elsewhere as a means of education. In this way, ordinary people could take in the information and make informed decisions.
Data visualization plays a similar role today. It takes the power of big data and places it in the understanding of ordinary people like you and me—not just the tech moguls and scientists.

Key Takeaways

Raw data has been called a “lonely language” because not everyone can grasp its significance at a glance. Through data visualization, however, those same numbers tell a story, one that is easily understood and perhaps even compelling. Graphs, charts, infographics, and other techniques make the information accessible beyond the data analyst. This, in turn, leads to increased collaboration, alignment toward common goals, and more informed decision-making.
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