VideoIn 2007, as a major U.S. publishing company contemplated going public, it realized it had a problem: no one had ever heard of it. Despite broad market penetration and an impressive breadth to its product line, the company feared that its anonymity would have a devastating effect on its offering price.
So it did what most companies would do and hired consultants to provide some answers. Three months later the consultants did what most consultants do and delivered a ton of data — the executive summary alone ran 60 pages. The firm had interviewed hundreds of current and prospective clients, and there was a good chance that the answers that the publishing company sought lay buried in the PowerPoint slides and supporting documentation that the consultants delivered. But extracting the ounce of gold from the ton of ore looked to be laborious in the extreme.
Another consulting firm was hired and given only a few weeks to make of the data what they could. It was a daunting task, particularly given what they ultimately produced: a single ingenious chart that positioned the company against six major competitors in terms of brand recognition, breadth of offerings, and markets served (see "From the Simple to the Sublime" at the end of this article). That concise snapshot of a complex business landscape proved momentous. The company ultimately made a $17 billion acquisition that overnight gave it household-name status and market dominance. The CEO was so impressed by the role that the chart played in this move that he had it framed and placed on the wall behind his desk, where it remains.
If the chart was good for the publishing company it was a positive bonanza for Dan Roam and his small consulting firm, which produced it. "I call it the million-dollar chart," Roam says, "because it led to so much more business for us." It was also one of the success stories that inspired The Back of the Napkin, one of last year's best-selling business books. The Back of the Napkin is both a manifesto and a how-to manual that demonstrates just how well the art of the deal can be enhanced by, well, art.
In truth, "art" is overstating it, which should come as a relief to anyone who wants to duplicate the success of Roam and his colleagues. "Visualization" is more accurate: if you can draw basic geometric shapes, lines, arrows, and stick figures, you have all the skill you need to put Roam's ideas into practice and produce a vast array of concept and network models, diagrams, schematics, flow charts, tables, and other representations.
Roam is not the first person to stress the power of pictorial analysis. In 1969, Rudolf Arnheim's Visual Thinking made a compelling case that while perception and reasoning may seem like two distinct mental activities, in fact neither one can occur without the other. More recently, in the business world, the concept of "strategy maps" has been advanced by Robert Kaplan and David Norton (creators of the balanced scorecard) as providing a "visual epiphany" that helps business leaders connect processes to desired outcomes.
Roam argues that executives should reach for the pencil not only when addressing a discrete task such as drawing a strategy map, but in myriad situations in which "the problem [or the solution] is hard to see." That may be a challenge for finance people, who are accustomed to believing that all answers can be found in the numbers if one simply drills down far enough. And, in fact, Roam concedes that those in finance are often what he calls "red-pen" people, who question the entire idea of visualization — right up to the point where they grab a red pen and redraw everything. "I often need to work harder to convince finance execs than any other group," Roam says. "But they become the most ardent backers of the concept." (For the record, the other two classes of people in Roam's world are "black-pen" people — those who are instantly drawn, so to speak, to visualization — and "yellow-pen" people, who are happy to build upon someone else's initial stab at visualization.)
It may help to know that Roam has consulted with the finance department at Microsoft, where, not surprisingly, employees can "make spreadsheets do pirouettes in ways mere mortals can't," he says. Nonetheless, they "understand that insights often depend on looking at the data in a more visual form."
Drawing Conclusions
As Roam sees it, most business problems can be framed as a variant of the five W's, or, more accurately, four W's and an H: who, what, when, where, and how. He walks the reader through the kinds of pictures that can be used to illustrate each kind of problem. In an extended example, he begins with a small accounting-software company that wants to better understand who its customers are. It draws itself as a small building and its typical customer, a large enterprise, as a bigger building, and then sketches in the hierarchy of executives and employees that it must communicate with at such a client.
Right away, Roam says, the picture makes explicit an important fact: the company has more types of customers than it might have thought. Building on these early pictures, the software company continues to refine its vision of the market, charting which people within the customer site are its biggest customer group and comparing that with how much each group spends on the company's software.
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