#SWDchallenge: the waterfall chart

Last month, we tried something a little less common: visualizing data in a square area graph (nearly 80 people shared their visuals!). One point of feedback raised was whether these really can be effective, or if the type of data you would depict in this way would mostly be better off in a basic bar. I think the challenge did highlight that in many cases, straightforward bars are likely superior, however I do believe there are good use cases for the square area graph as well (which I outlined in the original challenge post).

There is a bigger point to be made here, though: in these challenges, please do think about what sort of data will lend itself well to the type of visual we're practicing, and whether that visual will help serve the message you are trying to get across (if not, you may want to find some different data). This is general advice that I find myself often giving when it comes to selecting an appropriate graph: consider what you want to enable your audience to do with the data and choose a graph that will facilitate this. In these challenges, we work backwards, since I'm prescribing the type of visual I'd like you to use. So in this case, you have to consider what the visual allows you to show and then find some data where it makes sense to show it that way.

This month, let's turn back to bars, but with a twist: the waterfall chart. Waterfalls are less common, but pretty practical in the right use case. Specifically, waterfalls are great when you have a beginning quantity, additions and/or deductions, and an ending quantity. I think of them like a math problem visualized: the first bar represents the starting quantity, the middle sections are meant to be additive or deductive from the original bar, and—when taken together—they yield the value shown in the final bar. Because the middle segments aren't aligned to a common baseline, if specific comparisons of the values are important I recommend labeling those with the values directly. Many people put lines between the segments as a way to tie them visually: I don't think these are necessary, but rather personal preference if you think it makes the visual easier to read (I do show connecting lines in the example below, though if I were to remake it now, I'd be apt to remove them). 

Also, when it comes to color in waterfalls, I commonly see green for the increases and red for decreases. If you're a regular reader, you perhaps know that I'm not a fan of this color scheme for a couple of reasons. First, I believe color can be used more strategically than this (used sparingly, it's one of your best tools for drawing your audience's attention to where you want them to look). In the case of the waterfall chart, you already have the spatial separation, direction of the bar, as well as hopefully clear labeling of increases and decreases, so I don't think the redundant encoding of color is necessary. Finally—and perhaps most importantly—there are accessibility issues from a colorblindness standpoint with a red/green palette.

I see waterfalls most frequently used in finance to show variance to budget, but there are definitely other uses as well. For example, in people analytics, we'd sometimes use them to show what contributed to headcount change of a team over a given period of time. Here is a blog post where you can read more about the following example, including some tips on how to make a graph like this in Excel (I typically use a brute-force method of stacking multiple series, also check out the comments on that post for some related resources). I'm sure there are add ins or perhaps other tools that make it even easier—if you're aware of resources that others can benefit from related to waterfall charts, please leave a note in the comments.

The challenge I pose to you this month: find some data of interest that lends itself well to this view and create a waterfall chart (alternative: if you have another view for showing the type of data you'd put in a waterfall that you think is more effective, I welcome your contribution through a specific example). Share it so we can all see and learn! DEADLINE: Tuesday, 5/8 by midnight PST. You must EMAIL YOUR ENTRY to SWDchallenge@storytellingwithdata.com for inclusion in the follow-up post. Given the volume of entries we’re receiving, we are not able to scrape Twitter, LinkedIn, etc. for submissions. The way to ensure inclusion is to send them to us. Full submission instructions follow (please do follow them, it makes our manual process at least a little easier!).

SUBMISSION INSTRUCTIONS:

• Make it. Identify your data and create your visual with the tool of your choice. If you need help finding data, check out this list of publicly available data sources. You're also welcome to use a real work example if you'd like, just please don't share anything confidential.
• Share it. Email your entry to SWDchallenge@storytellingwithdata.com by the deadline. Attach your image as a .PNG. Put any commentary you’d like included in my follow up post in the body of the email (e.g. what tool you used, any notes on your methods or thought process you’d like to share); if there’s a social media profile or blog/site you’d like mentioned, please embed the links directly in your commentary (e.g. Blog | Twitter). If you’re going to write more than a paragraph or so, I encourage you to post it externally and provide a link or summary for inclusion. Feel free to also share on social media at any point using #SWDchallenge.
• The fine print. I reserve the right to post and potentially reuse examples shared.

I look forward to seeing what you come up with! Stay tuned for the recap post in the second half of May.

Check out the #SWDchallenge page for all of the monthly challenges and recaps!