The Best McKinsey Waterfall Charts (And What Makes Them Work)

The action title does all the work

The most immediately noticeable thing about a McKinsey waterfall chart isn't the bars — it's the title. McKinsey slides almost never use descriptive titles like "Revenue Bridge, Q1 to Q2." Instead, the title states the insight: "New product launches accounted for 70% of Q2 revenue growth."

This is what McKinsey calls the "action title" — a complete sentence that tells the reader what to conclude before they even look at the chart. The chart then serves as evidence for that conclusion. This matters enormously in practice: a reader scanning the deck at 2x speed still gets the message.

Replicating this is the single highest-leverage change most people can make to their slides. Audit every slide title you write. If it just names the chart type or the time period, rewrite it as a sentence that states your finding.

Two colors, maximum three

McKinsey waterfall charts are deliberately restrained with color. The typical pattern uses a dark blue (often close to navy) for the starting and ending total bars, a medium blue for positive contributors, and a muted red for negative contributors. That's it.

There's no gradient, no pattern fill, no color per category. The color serves a single purpose: to encode direction (up or down) and category (driver vs. total). Once the reader understands the encoding — which takes about two seconds — the chart becomes effortless to read.

The failure mode most people fall into is using a different color per bar to distinguish categories. This adds cognitive load without adding information. The label beneath the bar already identifies the category. The color should only convey direction.

Dashed connectors, not solid lines

Between adjacent bars in a McKinsey waterfall, you'll typically see a thin dashed line connecting the top of one bar to the bottom of the next. This connector line serves an important function: it makes the "floating" nature of intermediate bars legible without adding visual noise.

Using a dashed (rather than solid) line is a deliberate choice. Solid lines can look like borders or axes, which creates confusion. The dashed line reads as a reference rather than a structural element — it guides the eye without competing with the bars themselves.

The connectors are always the same light gray, typically around 60-70% opacity. They should never draw attention to themselves.

Value labels on the bars, not on axes

In a McKinsey waterfall, you'll almost always see the actual numeric value labeled directly on or above each bar. The y-axis is present but secondary — it gives rough scale orientation. The labels on the bars are the primary data communication.

This is the right call for waterfall charts specifically. Unlike a line chart where a continuous y-axis tells a coherent story, a waterfall is a series of discrete quantities. The precise value of each bar matters more than its position on the axis. Labeling each bar directly reduces the reader's need to translate visual height into numbers.

The label format follows the unit of the chart — if the chart is in $M, labels read "$45M" not "45." For intermediate bars showing a change (not a total), the label typically includes the sign: "+$45M" or "–$15M". This reinforces the directional encoding.

The source line is non-negotiable

Every McKinsey chart, without exception, has a source citation at the bottom. This is partly institutional credibility — McKinsey won't publish a chart that can't be traced to underlying data. But it also serves a practical function: it anchors the chart in reality and implicitly invites scrutiny.

For your own work, including a source line (even "Source: Internal financial data, FY25") signals the same rigor. It tells the audience that the numbers came from somewhere specific and that you can back them up. Decks without source citations feel less authoritative, even when the data is correct.

What McKinsey waterfall charts are used for

Looking across a large sample of McKinsey public reports, waterfall charts appear most frequently in three contexts:

• Financial performance analysis — revenue bridges, margin walks, cost breakdowns between periods
• Market analysis — demand growth decomposed by sector, geography, or end use
• Impact quantification — cost savings or revenue gains broken down by initiative or lever

Notice what's absent: McKinsey doesn't use waterfalls for process flows, timelines, or comparisons between options. Those use different chart types. The waterfall is specifically for showing how a total quantity changed from one state to another via discrete contributions.

Build one yourself in minutes

The principles above are all encoded in Waterfall Maker — action title field, proper color coding, dashed connectors, value labels on bars, source line. You enter your numbers and get a slide that follows these rules automatically.