The Power of Story

Try this quick exercise: Write down from memory as much of last year’s strategic plan as you can recall off the top of your head. Then on a second sheet of paper, write down as much of the story “Goldilocks and the Three Bears” as you can remember. Despite the fact that the strategic plan was written within the past 12 months and it’s probably been decades since you’ve read “The Three Bears” (unless you have small children), it’s likely that you recalled more of the Goldilocks’s story than the strategic plan. Why? As cognitive psychologists have established from years of research, stories are more memorable than bulleted lists, which tend to make up much of today’s strategic- planning PowerPoint decks.

A story is an account of events or experiences, either true or fictitious, in narrative form. Research shows that because a story’s elements are packaged into a single, linear narrative comprised of the setting, characters, relationships, sequences of events, conflict, and resolution, it is easier for our minds to retain the information a story conveys.60 Lists of bullet points that lack narrative flow suffer from the recency effect and the primacy effect, meaning that people are more likely to remember the first and last items on the list, but not much in between.

Researcher Michael Carriger conducted a study to compare how well employees retained information about corporate strategy presented in bulleted versus narrative format. One set of employees was presented with a PowerPoint version of the corporate strategy. Four months following the presentation, 29 percent of employees identified the strategy as one of differentiation, 58 percent identified it as focusing on customer intimacy, and 13 percent on cost leadership.61 The average confidence rating employees gave their response was only 2.9 on a scale of 5. So, not only was there poor recall of the strategy, but employees knew that they were uncertain of it. Carriger concluded, “Intriguingly, a narrative presentation, in the form of a ‘springboard story’ would appear to be a more effective means to lead employees to understand what strategy is than a bullet-point list of facts and figures reminiscent of the typical PowerPoint presentation.”62

Unlike bullet points strung together across slides, a story forces the creator to demonstrate their mastery of the material by showing the reader the all-important connections and relationships between the key components. A story enables the reader to visualize the setting, see the characters, identify the challenges or conflicts preventing their success, establish how the journey forward unfolds, and describe the final resolution. Much of’s success in anticipating customer needs and providing comprehensive solutions to large-scale challenges (e.g., same-day delivery, cloud services, video streaming, etc.) can be attributed to the high-level of strategic thinking that takes place throughout the organization in the form of narrative. CEO Jeff Bezos has his team prepare six-page narratives, which are read in silence at the beginning of meetings before being discussed. Describing the benefits of creating these narratives, Bezos says, “Full sentences are harder to write. They have verbs. The paragraphs have topic sentences. There is no way to write a six-page, narratively structured memo and not have clear thinking.”63

The nature of story is a fitting way to present strategy for several reasons. Strategy involves trade-offs, which inherently mean that someone is taking a risk. Good stories can effectively convey the element of drama, in this case risk, because they arouse emotions. Too often, strategy is presented in a dry, lifeless, numbers-based approach that inspires no one. Presenting strategy in a narrative form forces us to examine what exactly we can become passionate about within our approach to achieving our goals. If we can’t find that excitement or emotion in our strategy, then we haven’t made the requisite trade-offs, or we are simply going through the motions. In either case, failure is likely.

Stories have protagonists, in some cases heroes that win the day. They also contain antagonists, who try to prevent protagonists from reaching their goals. While the purpose of strategy is to configure resources to create superior value for customers, painting your team as the hero, and a key competitor or market constraint as the villain, may in some cases spark employees’ competitive fires if they aren’t currently lit. Several years ago, Apple ran an advertising campaign for their Macintosh computer line that presented Microsoft’s product as the geeky villain. More recently, Samsung’s ads feature their mobile phone as the new hero, positioning Apple’s iPhone—especially the Siri feature—as the outdated villain. Narrative can give your team a rallying cry and inspire their efforts to outperform a marketplace villain.

Great stories also build tension between the current state and the great unknown. As we watch movies or read books, we’re continually asking ourselves questions like, “Will they get out alive?,” “Can the ship survive the storm?,” and “Is she the real murderer?” Effective stories take us into the unknown, let us wallow in uncertainty, and then show us some form of resolution. Creating, communicating, and executing strategy also involves tension (What trade-offs must be made?), anxiety about the unknown (What will our strategy be?), and uncertain outcomes (Will we succeed or fail?). The story format can convey the tone of your specific situation, ranging from the confidence of a market leader to the aggressive desperation of a challenger with only one product and six months of cash left.

Finally, stories enable you to create a lasting visual impression. “Jack and the Beanstalk,” “Rudolph the Red-Nosed Reindeer,” “Snow White and the Seven Dwarfs.” Each story creates a series of pictures in our mind, which we can piece together, much like Walt Disney did in creating his animated cartoons. If we intend to move people to action, to follow our lead, then using stories filled with image-generating words can be an effective tool. Researchers examined the key speeches and inaugural addresses of U.S. presidents to determine the relationship between their speaking styles and the level of inspiration felt by their audiences. The study showed that the greater the number of image- based words used in the speech, the higher the president’s leadership rating. The author presenting the research concluded, “Presidents who verbally painted a picture of their vision were best at persuading others to follow them.”64 Employing stories that paint mental pictures give leaders a better chance of persuading their teams to commit to strategic direction.

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