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Graphic Design and Risk Avoidance

graphic_design_risk_avoidance

If you don’t draw it, someone else will… and you might not like the way it looks. That’s the message we’re hearing from public companies who have encountered community activists and journalists with a point to illustrate. Literally. It’s not often that we talk about graphic design and risk avoidance in the same sentence. But while its tempting to sit back and ignore online trends (like Infographics) as the realm of bloggers and pretenders, once activist investors start implementing these graphic design ideas to target your company and attract online support, you’ll be sitting up to take notice. Infographics might not be standard IR tools yet, but they can certainly be used against you.

Design in journalism

The accounting and finance internet is abuzz right now with #luxleaks. A group of hard-working journalists have acquired documents detailing cunning tax loopholes designed and used by many large-cap companies. It makes for poor optics among the public, and it’s only a matter of time before investors and analysts start wondering if governments are likely to take exception to being made fools of, and curry populist favor with claw backs or penalties. IR firms need to start preparing in ernest for questions on this topic.

Tax loopholes are complicated, even for the financially literate. For the journalism to have any kind of lasting effect, it has to be illustrated. The Australian Financial Review’s reporting [1] on Ikea’s tax avoidance has become widely shared and well trafficked in large part because of a cheeky interactive graphic that plays off of the furniture maker’s famous instruction enclosures.

Data based journalism is a growing trend and visualizing earnings data is going to be next. The Global Editors’ Network gives away awards for the best practices every year. In some circles, they’re more coveted than the Pulitzers. Much in the way the personal computer changed the way we can operate businesses, it’s changing the way journalists report.

But data-based journalism’s success is directly dependent upon the ability of reporters and editors to illustrate what they’re finding. Ikea’s clever structuring wouldn’t have raised many eyebrows outside tax haven hawks without the people at the Review drawing a picture for their readers. Similarly, a public company can’t effectively get across the size of potential product markets, the company’s operating efficiency relative to its competitors, or even a consistently favorable debt to equity ratio from text alone. Even if they do, it’s unlikely that anyone will share it.

Negative Data Visualization

As evidenced by the unfortunate (and never-ending) success of daytime talk shows and reality television, people just can’t get enough of other peoples problems. A psychologist may attribute this to a variety of things. Schadenfreude is doubtlessly one of them, but I don’t get the feeling people are glad about the unfortunate state of Honey Boo Boo and the guests on the Maury Povich show. It’s more like they’re staring in slack-jawed wonder.

At any rate, ugly complications sell. Back in 2010 when Transocean’s Deepwater Horizon went up in flames in the gulf of Mexico, causing a prolonged maritime environmental disaster, people came to understand the unfolding tragedy through infographics. The tendency of informed content producers to stick with what works had the infographics pouring on to the internet at about the same rate that the crude was coming out of the hole, spawning this excellent parody news article [2] by IR Smartt favorite Josh Gordon of The Reformed Broker.

According to The Bureau of Pretty Information (BPI), there have been approximately 7,000 infographs created since the disaster began two months ago.  Because most websites show absolutely no sign of losing interest in these, the people who can create them are facing a sellers’ market for their skills. “Look, every conceivable way of looking at the spill and illustrating the data has already been executed,” admits Alan Twink, Acme Infographic’s CEO, “but everyday the Huffington Post is open for business, and what are they going to do- not post infographics?” So far, we’ve seen infographics depicting how large the spill is in barrels, how large the spill is in gallons, how it compares to other spills, what the oil spill would look like if laid out over other geographic areas, how many pelicans have been oiled by the spill, timelines of the spill, projected costs of the spill and many more.  Infographics about the spill are currently being created at a rate of 3 per hour but even this pace has proven inadequate to meet the demand of websites hungry for more colorful BP/Gulf-related charts.

The graphic barrage all doubtlessly made for their very own bit of water-cooler headshaking that brought BP and Transocean a long way past the point that damage control could have any reasonable effect. Infographic consumers tend to feel educated about the topic, despite being disinclined to do additional research, for the most part.

As bad as PR disasters can be at their zero hour, the Internet allows every hack with a spreadsheet and a working knowledge of Adobe Illustrator to fling them around with little or no context, hunting for disgust clicks with link bait, then have them to live on in perpetuity.

Risk Avoidance with Graphic Design

Data visualization has impact, and the technology to create it is cheap and freely available. This means that there are people out there online with with determination, skills, data and tools to drive your company’s story in any direction they like. Avoiding this risk is only possible if your company stays “ahead of the message”. This goes for PR, HR and IR equally. Importantly, it wasn’t just environmental groups who got on board the BP train, it was everyone. The data was compelling and the clicks kept coming. Many content producers are socially and politically agonostic. They care about the clicks, and will remain on the stick as long as they keep coming.

What happens tomorrow, when activist investors start using graphic design to cultivate audiences? They already are, and when Investor Relations Officers aren’t ready, it shows.

data visualization wins investors

Tim Howard

Tim is our CEO at IR Smartt Inc. He leads the strategy and business development teams, driving the company forward. Tim's previous professional experience included extensive work in Journalism and Online Publishing.