João Cotter Salvado

Freek Vermeulen

<article-ideainbrief class="article-ideainbrief">
 <h4 class="ideainbrief-title">Idea in Brief</h4>
 <div class="ideainbrief-contents">
  <h5>The Problem</h5>
  <p>When two comparable companies present much the same strategy to investors, the market will often seem to reward one but not the other.</p>
  <h5>Why It Happens</h5>
  <p>Research suggests that the single most important differentiating factor in these situations is whether a company has or has not provided a compelling visualization of its strategy.</p>
  <h5>The Solution</h5>
  <p>Reinforce your strategy with an effective visualization. To design one, follow these five rules: Group ideas into three or four main concepts, create layers with increasing detail, use color and shading only to distinguish the layers, indicate a clear sequence of relationships among the elements, and present information horizontally.</p>
 </div>
</article-ideainbrief><p class="mag-icon-pricing-strategy-w30">On December 1, 2014, Cypress Semiconductor announced that it was acquiring fellow chipmaker Spansion for $1.6 billion. When then-CEO Thurman Rodgers presented the deal, the stock market responded approvingly. An analysis showed that once other confounding influences had been ruled out, the share price of Cypress had jumped up 13% after the deal’s announcement. Clearly, investors believed in the company’s rationale for the purchase.</p>

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<p>Why do investors respond favorably to some CEO presentations but not to others? In an analysis of 654 presentations on acquisitions, two professors found one factor that stood out: whether a compelling visualization of the strategic rationale for the deal was included. Unfortunately, they discovered, the majority of strategic visualizations aren&#8217;t designed to have impact.</p>
<p>In this article the professors explain why visualizations are so important to the communication of strategy and describe how to create one that will win buy-in from employees and investors alike. By combining insights from research on how the brain processes information with their study of deal presentations and experiments testing people&#8217;s responses to various visual approaches, they have identified five critical design principles: Group ideas into three or four main concepts, create layers with increasing detail, use color and shading only to distinguish the layers, indicate a clear sequence of relationships among the elements, and present information horizontally.</p>

You Should Be Able to Boil Your Strategy Down to a Single Clear Visualization

Why do investors respond favorably to some CEO presentations but not to others? In an analysis of 654 presentations on acquisitions, two professors found one factor that stood out: whether a compelling visualization of the strategic rationale for the deal was included. Unfortunately, they discovered, the majority of strategic visualizations aren’t designed to have impact. In this article the professors explain why visualizations are so important to the communication of strategy and describe how to create one that will win buy-in from employees and investors alike. By combining insights from research on how the brain processes information with their study of deal presentations and experiments testing people’s responses to various visual approaches, they have identified five critical design principles: Group ideas into three or four main concepts, create layers with increasing detail, use color and shading only to distinguish the layers, indicate a clear sequence of relationships among the elements, and present information horizontally.

You Should Be Able to Boil Your Strategy Down to a Single Clear Visualization

Summary.

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