The Untapped Potential of Corporate Narratives

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.

The pseudo-narrative

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.

Differentiation

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.

Leverage

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.

Distributed innovation

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.

Attraction

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.

Relationships

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.

Bottom line

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.

Comments

[John Maloney]

It is an uncomfortable feeling that these concepts are new to people.

From a personal perspective and for example narratives are an essential enterprise governance technique. They inhabit the corporate 'constitution.' It can take many forms. The specific purpose is share principles and to limit the scope of control.

The corporate narrative/constitution propels dignity and high achievement of people. Think Different is an excellent example. Here is another.

http://colabria.com/knowledge-based-organizations/

[Helene]

Hi John, thanks for this article, which comes quite timely and resonates with what I am currently working on. That's a very important and interesting distinction.

I particularly noted the comment from kdietz, with which I tend to agree, though I don't quite understand why he doesn't embrace the distinction. In particular these:

"the grand ‘narrative’ discussed here is made up of hundreds or thousands of stories that are always fluid and in motion. They work dynamically on people sometimes long after the telling."

And

"Narratives as movements are made up of a collection of stories, beliefs, and visions of the future that galvanize people. But folks do not relate to ‘narratives’ in this sense without having stories to connect to that are relevant to them personally."

This is perfectly true, but this does not eliminate the existence and the need for narrative, as something... the aggregator or the attractor... at a meta-level....

I personally would say that narrative is the underlying logic or the scaffold that relate the stories together and creates coherence from disparate elements. Whether it is emergent from a collection of stories, or whether the stories are an expression of this logic. It's probably a mix of both in a feedback loop. In a corporate context, narrative pertains to identity and brand as a factor of cohesiveness, a corporate paradigm so to speak, and the stories are its vehicle. That's why good brand strategists first look at the stories and draw elements of narrative from it that then serve to tell stories that will coalesce various action logics to reinforce the narrative and build all kinds of connivence with the brand... indeed as you say John, a driver for action! So the brand and the communication attached to it is not an artificially projected image, but the 'true' reflection of the corporation's identity in a dynamic perspective (including it's past achievements, current capabilities, and vision/potential).

I've been looking at how this applies to social change and federating efforts towards a thrivable world: http://www.slideshare.net/helenefinidori/imagine-thecommongoodconf2013. I think what I presented at that conference, which illustrates what I describe above, reflects what both you John and kdietz are talking about, and puts beliefs and worldviews in the mix too.

[RalfLippold]

Thanks a lot John, making the distinction between story and narrative.
Especially in the corporate world it seems that focus is more on the individual story, leaving out the bigger picture.

From my point of view Edgar Schein's "DEC is Dead, Long Live DEC" is a good example of a narrative, showing all the different currents during the rise, and fall of DEC (Digital Equipment Corporation).

What makes it challenging is the broadness of a narrative, that seems not to end and is going on and on. Pulling in the interest of curious readers/ listeners can be achieved by making explicit what is not yet connected by telling individual stories about specific parts of the corporation's life.

Explaining for example the success of the building o of BMW plant in Leipzig would not make sense as one leaves out the disaster that followed the bold move by BMW to buy Rover in the UK at the end of the 90's.

Great thoughtprovoking piece John!

[David Hutchens]

Response to Charles Thrasher: Thank you for your thought. I agree with you. Faith and belief are sadly missing from the landscape of many organizations and are powerful sources of engagement. My disagreement is with the author's assertion that a faith or belief is an example of a narrative. They are not. A narrative is something quite different.

[Kdietz]

Well, exceptionally trained professionals working with organizational story for several decades are having problems with the distinctions made here between story and narrative. I've been curating their blog posts and comments at www.scoop.it/t/just-story-it

[Nadyne Edison]

I am a story teller because I am a marketer. I can tell a great product story, a persuasive message for a corporation, I make up stories, embellish stories.....and have been successful for pushing product, changing opinions and attitudes, and creating an image...but I have never been able to get a message that defined the focus of my companies, brands, corporate entities had a narrative for the customer,......a slogan, a company story, an image building series of messages are not narratives and although, useful and important for the marketing of a product or company, they do not bring about a focus that looks out to the customer, their experience, their needs and even desires. We have few narratives. As a former General Motors executive, the customer was last on anyone's mind....we were car people....I started the customer experience strategy for GM and was basically an outcast.....what is GM's narrative....I certainly know their stories, which there were and are many....none involving the customer.....oh yes, "it's not your father's Oldsmobile, a brand slogan that goes in the annals of bad brand marketing and ultimately the destruction of a brand. But think, what if there was a narrative for Oldsmobile .....where may it be today...the story had a sad ending, the narrative may have kept the customer loyalty and confidence that was once there. I will always tell stories but not I realize the value and critical importance of a narrative....once again John you have put me on another path!

[twitter.com/wmougayar]

This was a very inspirational post, and very true throughout. I think it even applies to the world of startups, and I have riffed on that here:
http://startupmanagement.org/2013/10/10/the-power-of-pull-for-startups/

[Charles Thrasher]

David Hutchens refers to faith and belief as if emotions are a flaw in John's argument for the strength of narrative. In fact, anything less than faith and belief is insufficient to inspire imagination, engagement or fierce loyalty. The self-centered, emotionless, insipid narratives lived by most companies has led to the 70% disengagement among employees reported by Gallup this year.

Perhaps I'm misinterpreting David's objection but I strongly believe that emotion isn't a weakness in the argument for narrative, it's a necessity.

[David Hutchens]

I'm struggling. I think it is very telling that not one but two of your commenters above have re-interpreted your presentation of "narrative" by replacing it with the words "faith" and "belief."

Wittingly or not, your commenters have diagnosed the disconnect I was feeling in your text. Your application of the word "narrative" does in fact sound a lot like collectively held mental models.

When I read your examples of Apple and Nike, I see vivid descriptions of mental models, beliefs. But the examples do not present a connected set of related events. (Although you are correct that each marketing slogan creates an engaging context in which narratives and stories can emerge. But your examples fall a step short of actually rendering examples of those narratives.)

Everything about your blog is right on -- except for the terminology! I appreciate the comment from Kdietz, which helpfully articulates the fluid natures of both story and narrative, and appropriately reestablishes the link between the two.

Agreed: there is a lot of unhelpful mania around "story," but let's not toss the term out quite yet. Story is active, and co-created, and is in fact the dynamic building block for the meta structures that you describe so well.

[Kdietz]

John, while I have enjoyed your writings in the past and appreciate your thinking on stories, I get what you are trying to do here I think. Yet at the same time, I question whether the distinction between stories and narrative really add up. I welcome a further discussion. Here are my thoughts after decades of working with organizational stories:

If we consider stories as only being about a beginning-middle-end structure, then they are self-contained. However, structure is only a small part of stories. In fact, stories are dynamic events, not discrete objects. Treating stories as objects leads to this kind of odd distinction being made between stories and narratives. In truth, the grand ‘narrative’ discussed here is made up of hundreds or thousands of stories that are always fluid and in motion. They work dynamically on people sometimes long after the telling. As performances, as events, story’s beginnings and ends are ephemeral as folklorists and anthropologists have recognized for decades.

Stories when told orally are co-created experiences and not passively consumed – and all great storytellers know that. They also know that stories are always about the other person, not themselves or other people – regardless if a personal story is being shared. That is the biggest lesson businesses need to learn.

Stories hold different problem solving structures within them. Once hearing a story, the choices people make about actions to take are always up to them. This is the craft of storytelling versus messaging – another lesson businesses need to learn. Stories are guides – actions are up to the listener. So the distinction here between stories and narratives is again problematic. I would rather the discussion focus on getting businesses to understand the powerful dynamics of storytelling rather than on distinctions that may create more confusion.

Narratives as movements are made up of a collection of stories, beliefs, and visions of the future that galvanize people. But folks do not relate to ‘narratives’ in this sense without having stories to connect to that are relevant to them personally. People will live and die for their stories. The aggregate of stories you are naming as a narrative are more aptly called ‘movements’ as you wrote. This is because they move people to action based on what is being said that they can connect their own person stories to, and the vision that is present. Again, calling these movements ‘narratives’ is kind of limiting and I’m not sure really expands our understanding of the dynamics going on.

I don’t think that narratives overcome cognitive biases any better than stories do. In my decades of org story experience and all the research I’ve read, stories are the ultimate and best vehicle for overcoming cognitive biases. But again, this is all based on stories being understood as dynamic events and not as objects.

Authenticity, trust, engagement all happen through story sharing that over time eventually generates what is being called here a grand ‘narrative’. There is nothing inherently good in narratives just because one focuses on them. There are plenty of dysfunctional and debilitating ‘narratives’/cultures floating around out there. Grand narratives/cultures are not cooked up in some executive meeting – cultures emerge through time as people share stories, walk the talk, and live their beliefs. That culture – hopefully one that is positive and enlivens people -- is what companies can be known for. And that is the real work story professionals and businesses need to get done together.

[Charles Thrasher]

The power of narrative derives from shared faith in some greater potential, a faith that sparks imagination and ignites action. I can't think of many corporate narratives that do either. Maybe that's a worthwhile goal itself - to gather compelling narratives, to understand their power.

[Jeremysewell]

Great article. I've been thinking about some aspects of this lately in relation to my own business and I think narratives come from beliefs an organization holds.

Apple believes in "thinking differently."Nike believes in "Just Do it." Everything they do is driven by this belief.

And others who already believe (or aspire to believe) in the same thing are drawn to the narrative and willing to become a part of the community.

Recently, we saw the Barilla debacle serve the other side of this. The organization's belief became their narrative and you saw those that did not share the beliefs distance themselves.

In my option, narratives can't just be created like stories. Narratives have to come from something deeper, more intrinsic to an organization's top leadership and the core reason the organization exists.

[James Strock]

Excellent insights, John. Perhaps the foundational one is your observation about some (most?) organizational narratives being about the organization and its needs, rather than about serving others. As in so much else, if one works from the outside-in, from a perspective of service, everything else can come into clarity. Simple... but not easy... :-)