At a time when we’ve all become obsessed with the power of story-telling, I’ve become increasingly focused on the missed opportunity to harness the much greater power of narratives, especially for institutions. In a time of mounting performance pressure and growing uncertainty, narratives will make the difference between institutions that crumble and institutions that grow stronger.
Yes, yes, I know that most of us use these two terms interchangeably – stories and narratives are viewed as the same thing. But I draw two critical distinctions which I’ve developed in more detail elsewhere (my early thinking on this topic is available in a blog and a SXSW talk).
Stories versus narratives
To recap, here are the distinctions. First, stories are self-contained – they have a beginning, a middle and an end. Narratives on the other hand are open-ended – the outcome is unresolved, yet to be determined. Second, stories are about me, the story-teller, or other people; they are not about you. In contrast, the resolution of narratives depends on the choice you make and the actions you take – you will determine the outcome.
Everyone is captivated by the emotional power and engagement of stories and it’s true, they have enormous power. But to understand the much greater power of narrative, I point out that throughout history, millions of people have given their lives for narratives. Every successful social movement in history has been driven at its core by a narrative that drove people to do amazing things, whether it’s the Christian narrative, the American narrative or the Marxist narrative. Narratives have an extraordinary power of pull.
Narratives are relevant at multiple levels – they can shape our lives, our institutions and the social arenas that surround us. I'm going to focus here on narratives at the institutional level, especially companies.
When I talk to executives about narrative, I tend to get puzzled looks – why are we talking about narratives? We have a business to run, profits to make and competitors to keep at bay. A few times, executives will proudly announce their company has a narrative: it had very humble beginnings, overcame enormous obstacles, accomplished great things and has the potential to do much more.
Alas, I point out that this so-called “narrative,” so common to many companies, is about themselves. It’s not about the people they are trying to reach and move. It’s not really a narrative – at best, it’s an open-ended story.
Examples of corporate narratives
Very few companies have in fact developed powerful narratives. One of the best, in my mind, is Apple. Their narrative is condensed into the slogan, “think different.” Unpack the narrative and it goes something like this: there’s a new generation of technology that for the first time in history has the potential to free us from the constraints and pressures to fit into mass society and that makes it possible for us to express our unique individuality and achieve more of our potential. But this is not a given – it depends on one thing: you have to think different. Are you willing to do that?
Apple’s narrative is about us and what we need to do; it’s not about Apple. Of course Apple epitomized what it meant to think different. Certainly, if you go back to its two founders – Steve Jobs and Steve Wozniak – it’s hard to find two individuals who more epitomized what it means to think different. Given the power of this narrative, it’s not surprising that Apple has generated a quasi-religious movement around its products and services.
Just briefly, one other powerful example of a corporate narrative is Nike’s – once again, condensed into a powerful slogan: “Just do it.” Unpack the slogan and a narrative begins to emerge. You’re surrounded with distractions and time pressure, but you have an opportunity to break personal barriers and achieve new levels of physical fitness and health. Others have shown that it’s possible to overcome perceived limits to human performance with determination and perseverance. Sure, it’s hard work and there’s going to be a lot of challenges along the way. In the end, though, the quest to become your personal best is filled with beauty, drama, moral uplift and fun. But, to get started on this journey, you need to “just do it.” Will you?
I give these example and they resonate among executives. But I still find them skeptical about what narrative could do for them and their companies. So, I’m going to explore here the specific benefits that narratives can provide to companies and why I believe narrative is becoming so much more powerful in our evolving global business economy.
In a world characterized by an expanding array of options competing for attention, a powerful narrative can differentiate – it can help a company to stand out from the crowd in a powerful and sustainable way. Narratives are by definition a long-term, sustaining call to action. They far outlive any individual product or service offering (although of course the evolving product or service offerings must be consistent with and reinforce the narrative). More importantly, the differentiation is based on a deep understanding of what drives the people a company is trying to reach and taps into a powerful unmet need that these people have. It’s a far more powerful differentiation than the features and functions of a product.
A narrative can mobilize people outside the company to act in ways that support and reinforce the goals that a company is trying to achieve. In a time when performance pressure is mounting and resources are becoming more limited relative to needs, a narrative can mobilize resources from a broad array of participants that can amplify the efforts of the company. Think of the community of application developers around Apple that are driven to support their platform, at least in part because of their narrative.
We live in a rapidly changing world where even the smartest of us no longer have all the answers. We need to tap into a much broader community of expertise and capability to help us come up with the next wave of insight, practices and products. A powerful narrative can focus a much broader community on an exciting opportunity that can spur innovation in very unexpected directions. For example, what would it take to help people to “think different”? A rich and diverse collection of application developers are deeply engaged in figuring this out and coming up with a growing array of innovative apps. Narratives encourage people to take initiative - properly framed, they can unleash a wave of experimentation, tinkering and exploration that can lead to accelerated learning and breakthrough insights from very unexpected quarters.
A powerful narrative pulls people to you. Word spreads rapidly by those who have already been engaged by the narrative. Participants will want to find others who either might help them attain the opportunity defined by the narrative or who might share their feeling that this opportunity is worth attaining. Rather than trying to push your message out to an increasingly saturated audience, they will swarm to you, drawn by the opportunity and the challenge you have laid out. Properly articulated, a narrative taps into a deep need that will drive people to find you wherever you are – they will not rest until they have connected with the institution that spoke to them in such a powerful way.
In a world of attention scarcity, simply gaining attention is not enough. Attention can be fleeting, gone as quickly as it came. What we need to be successful in business is deep, long-term, trust-based relationships. In a world that is constantly conspiring to draw our attention to the next shiny object, these relationships can be very challenging to build and they’re even more difficult to maintain.
Narratives frame long-term opportunities that require sustained relationships to achieve. We naturally seek connection with others who have fallen under the spell of the narrative and with the institution that crafted the narrative. By working together to achieve an exciting opportunity, we get to know each other in far deeper ways than we ever would through casual conversations. We develop trust as we learn whom we can really rely on. These relationships can sustain an institution in turbulent times when the going gets tough far better than the commercial “relationships’ that fray as soon as the tides change.
Overcoming cognitive biases
So far, I’ve been framing the power of narrative in terms of the benefits of connecting with and mobilizing others beyond the boundaries of the institution. But there’s another benefit that encompasses both the individuals within the institutions and those outside. Narratives help us to overcome cognitive biases that tend to take hold in times of growing uncertainty and turbulence.
While completely understandable and natural, these cognitive biases can lead to increasingly dysfunctional behavior. I've written about this aspect of narratives in an earlier blog posting, but the cognitive biases that narratives can overcome are: risk aversion, shortening time horizons, zero-sum views of the world and erosion of trust.
If executives want to build institutions that can grow stronger in turbulent times, rather than weaker, they have to find ways to overcome these cognitive biases among their employees as well as among those they are trying to serve and collaborate with outside. Narratives can play an important role in accomplishing this.
Hopefully you can begin to see the untapped power of narrative in a business context. If you do, resist the temptation to simply write up a powerful narrative. Effective narratives emerge from collective action, not just words on a page.
There’s a lot that remains to be done to explore the power of narratives for business. I’ve cited Apple and Nike as examples of corporate narratives but surely there are other examples. What examples have you come across? What criteria can we use to evaluate the power of a narrative? What makes for a great narrative versus just a so-so narrative? What are the most effective approaches to defining and spreading a narrative? How can narratives evolve over time? I need your help in fleshing this perspective out.
Narratives are not just “nice to have.” They are increasingly the foundation that will drive business success. Those who master this opportunity will be able to harness increasing returns while those who don’t will remain trapped in the purgatory of diminishing returns until the inevitable collapse. Narratives harness the power of pull in ways that almost nothing else can – especially that third, and most powerful, level of pull: achieving more of our potential. With narratives, small moves, smartly made, can indeed set very big things in motion. Will you join me? It’s up to you.