The Leader's Guide to Storytelling

by Stephen Denning

  Granted, even optimistic stories have to be true and believable, since jaded corporate audiences know too well the experience of being presented with half-truths. Stories told in an effort to spur action needed to make good on their promises and contain sufficient evidence of a positive outcome. But stories intended mainly to transfer knowledge must be more than true. Because their objective is to generate understanding and not action, they tend to highlight the pitfalls of ignorance; they are meant not to inspire people but to make them cautious. Just as my minimalist stories to spark action were different from traditional entertainment stories told in a maximalist fashion, so an effective knowledge-sharing story would have negative rather than positive overtones.

  A Collective Yawn

  Once I saw that different narrative forms can further different business goals, I looked for other ways that managers could make stories work for them. A number of distinct story types began to emerge—ones that didn't necessarily follow Aristotelian guidelines but were nonetheless used to good effect in a variety of organizations. (For descriptions of some of them and the purposes for which they might be used, see “A Storytelling Catalogue” later in this chapter.) And I continued to come across unexpected insights about the nature of storytelling within organizations.

  For one thing, if negative stories have their place, so do apparently boring ones. In Talking About Machines, Julian Orr recounts a number of stories that have circulated among photocopy machine repair technicians at Xerox.2 While rich in detail, they are even less storylike than my little anecdote about the health care worker in Zambia. Most of these tales, which present solutions to technical problems faced by the technicians, lack a plot and a distinct character. In fact, they are hardly stories at all, with little to hold the interest of anyone except those close to the often esoteric subject matter. Nevertheless, they are compelling even to this limited audience because they are driven forward by a detailed explanation of the cause-and-effect relationship between an action and its consequence—for example:

  You've got a malfunctioning copy machine with an E053 error code, which is supposed to mean a problem in the 24-volt Interlock Power Supply. But you could chase the source of that 24-volt Interlock problem forever, and you'd never ever find out what it is. If you're lucky enough, you'll eventually get an F066 error code, which indicates the true source of the malfunction—namely, a shorted dicorotron. Apparently this is happening because the circuitry in the XER board has been changed to prevent the damage that would otherwise occur when a dicorotron shorted. Before the change in circuitry, a shorted dicorotron would have fried the whole XER board. Changing the circuitry has prevented damage to the XER board, but it's created a different issue. Now an E053 error message doesn't give you the true source of the machine's malfunction.

  This story, paraphrased here, doesn't just describe the technician's accurate diagnosis of a problem; it also relates why things happened as they did. This makes the account, negative in tone and almost unintelligible to an outsider, both informative and interesting to its intended audience.

  As I continued my investigation, one area of particular interest for me was the link between storytelling and leadership. I already knew from personal experience that stories can be used as a catalyst for action. And I had seen in several influential books—Leading Minds by Howard Gardner, The Leadership Engine by Noel Tichy, and The Story Factor by Annette Simmons—that stories can help leaders define their personality, boosting confidence in their integrity and providing some idea of how they might act in a given situation.3

  I also had seen leaders using narrative to inculcate a positive set of corporate values and beliefs in the hearts and minds of employees. Think, for example, of Tyco's effort to repair its battered value system. The company began by developing a straightforward guide setting forth new rules in such areas as harassment, conflicts of interest, and fraud. But Eric Pillmore, senior vice president of corporate governance, soon learned that in this form, the booklet would merely gather dust on people's shelves. So he threw out what he had done and started again in an effort to bring the principles alive through stories. Here is one of them:

  The entire team jokes about Tom being gay. Tom has never complained and doesn't seem to mind, but when Mark is assigned to work with Tom, the jokes turn on Mark. Now that Mark receives the brunt of the jokes, he tells his supervisor he wants to be reassigned. His supervisor complies with Mark's request.4

  This story serves as a sidebar for the section of the guide that deals with sexual harassment and other forms of intimidating behavior. While the company's policy on harassment is clearly laid out in the guide, the simple narrative helps bring the policy to life and provides a starting point for thinking about and discussing the complex issues involved. Dozens of similar stories illustrate an array of company policies.5

  An Enticing But Hazy Future

  Although these types of stories furthered leadership goals in a relatively predictable way, others I came across were more quirky—particularly ones used to communicate vision. Noel Tichy writes about the importance of preparing an organization for change: “The best way to get humans to venture into unknown terrain is to make that terrain familiar and desirable by taking them there first in their imaginhations.”6 Aha! I thought. Here is a place where storytelling, perhaps the most powerful route to people's imaginations, could prove indispensable.

  But as I looked at examples of such stories in a number of arenas, I discovered that most of the successful ones were surprisingly sketchy about the details of the imagined future. Consider Winston Churchill's “We Shall Fight on the Beaches” speech and Martin Luther King Jr.'s “I Have a Dream” speech. Neither of these famous addresses came close to describing the future in enough detail that it became familiar terrain in listeners' minds.

  Over time—and in part through work I did that incorporated scenario planning—I realized the reason. Specific predictions about the future are likely to be proved wrong. Because they almost inevitably differ in major or minor ways from what eventually happens, leaders who utter them risk losing people's confidence. Consequently a story designed to prepare people for change needs to evoke the future and conjure up a direction for getting there—without being too precise. Think of the corporate future laid out in a famous mandate by Jack Welch: General Electric will be either number one or number two in the field, or it will exit the sector. This is a clear but broad-brush description of where Welch wanted to take the company. Like my Zambia story, it doesn't convey too much information, though for different reasons.

  I also came across stories used in somewhat unusual situations that called for reactive rather than proactive measures. These stories counteracted negative ones that circulated like viruses within an organization and threatened to infect the entire body. Dave Snowden of IBM first pointed out to me how stories could be used in this manner. His hypothesis was that you could attach a positive story to a negative one and defuse it, as an antibody would neutralize an antigen.

  For example, at an IBM manufacturing site for laptop computers in the United Kingdom, stories circulated among the blue-collar workers about the facility's managers, who were accused of not doing any real work, being overpaid, and having no idea what it was like on the manufacturing line. But an additional story was injected into the mix. One day a new site director turned up in a white coat, unannounced and unaccompanied, and sat on the line making ThinkPads for a day. He asked workers on the assembly line for help. In response, someone asked him: “Why do you earn so much more than me?” His simple reply: “If you screw up badly, you lose your job. If I screw up badly, three thousand people lose their jobs.”7

  Although this isn't a story in the traditional sense, the manager's words and actions served as a seed for the story that eventually circulated in opposition to the one about managers' being lazy and overpaid. You can imagine the buzz: “Blimey, you should've seen how he fumbled with those circuit boards. I guess he'll never work on the line. But you know,
he does have a point about his pay.” The atmosphere at the facility began improving within weeks.

  A Storytelling Catalogue

  Storytelling is an increasingly accepted way to achieve management goals. But leaders need to employ a variety of narrative patterns for different aims. The following sections sketch the kinds of stories I've found, following the general outline of Part Two of the book.

  Sparking Action

  Leadership above all is about getting people to change. To achieve this goal, you need to communicate the complex nature of the changes required and inspire an often skeptical organization to enthusiastically carry them out. This is the place for what I call a springboard story—one that enables listeners to visualize the large-scale transformation needed in their circumstances and then to act on that realization.

  A springboard story is based on an actual event, preferably recent enough to seem relevant. It has a single protagonist with whom members of the target audience can identify. And it has an authentically happy ending, in which a change has at least in part been implemented successfully. (It also has an implicit alternate ending—an unhappy one that would have resulted had the change not occurred.)

  The story has enough detail to be intelligible and credible but—and this is key—not so much texture that the audience becomes completely wrapped up in it. If that happens, people won't have the mental space to create an analogous scenario for change in their own organization. For example, if you want to get an organization to embrace a new technology, you might tell stories about individuals elsewhere who have successfully implemented it, without dwelling on the specifics of implementation.

  Communicating Who You Are

  You aren't likely to lead people through wrenching change if they don't trust you. And if they are to trust you, they have to know you: who you are, where you've come from, and why you hold the views you do. Ideally they'll end up not only understanding you but also empathizing with you.

  Stories for this purpose are usually based on a life event that reveals some strength or vulnerability and shows what the speaker took from the experience.

  Unlike a story designed to spark action, this kind is typically “well told,” with colorful detail and context. So the speaker needs to ensure that the audience has enough time and interest to hear the story.

  For example, Jack Welch's success in making General Electric a winner was undoubtedly aided by his ability to tell his own story, which includes a tongue-lashing he once received from his mother after he hurled a hockey stick across the ice in response to a disappointing loss. His mother chased young Jack into the locker room where the young men on the team were changing and grabbed him by the shoulders. “You punk!” he reports her saying in his memoir. “If you don't know how to lose, you'll never know how to win.”8

  On the face of it, this is a story about Jack Welch's youth, but it's also a story about the Jack Welch of today. From this story, we get a good idea of the kind of person Jack Welch became as CEO of GE—obsessed with winning, strong on loyalty, and with an aggressive style of behavior, someone who is very much in your face.

  Communicating Who the Company Is—Branding

  In some ways, the stories by which companies communicate the reputation of themselves and their products so as to establish their brand are analogous to leaders' stories of who they are.

  Just as individuals need trust if they are to lead, so companies need trust if their products and services are to succeed in the marketplace. For customers to trust a company and its products, they have to know what sort of company they are dealing with, what kinds of values it espouses, and how its people approach meeting customers' needs.

  Strong brands are based on a narrative—a promise that the company makes to the customer, a promise that the company must keep. It's a story that the customer has about the company and its products and services. The brand narrative is owned by the customer, not the company.

  Once you have settled on the brand promise and made sure that the organization can deliver on it, communicating that to customers is most effectively done not through electronic advertising (which today has limited credibility) but rather through having the product or service tell its own story or by customers' word of mouth.

  Transmitting Values

  Stories can be effective tools for ingraining values within an organization, particularly those that help forestall future problems by clearly establishing limits on destructive behavior. A story of this type ensures that the audience understands “how things are done around here.”

  These narratives often take the form of a parable. Religious leaders have used them for thousands of years to communicate values. The stories are usually set in some kind of generic past and have few context-setting details—though the context that is established needs to seem relevant to the listeners. The facts of such tales can be hypothetical, but they must be believable. For example, a story might tell the sad fate of someone who failed to see the conflict of interest in not disclosing a personal financial interest in a company supplier.

  Of course, narratives alone cannot establish values in an organization. Leaders need to live the values on a daily basis.

  Fostering Collaboration

  Every management textbook talks about the value of getting people to work together. But most don't offer advice on making that happen in real-life work environments except for generalities like, “Encourage conversations.” Yes, but how?

  One approach is to generate a common narrative around a group's concerns and goals, beginning with a story told by one member of the group. Ideally that first story sparks another, which sparks another. If the process continues, group members develop a shared perspective that enables a sense of community to emerge naturally. The first story must be emotionally moving enough to unleash the narrative impulse in others and create a readiness to hear more stories. It could, for example, vividly describe how the speaker had grappled with a difficult work situation.

  For this process to occur, it is best if the group has an open agenda that allows the stories to surface organically. It is also desirable to have a plan ready so that the energy generated by the positive experience of sharing stories can be immediately channeled into action.

  Taming the Grapevine

  Rumors flow incessantly through every organization. “Have you heard the latest?” is a whispered refrain that's difficult for managers to deal with. Denying a rumor can give it credibility. Asking how it got started may ensure its spread. Ignoring it altogether risks allowing it to grow out of control. Rumors about issues central to the future of the organization—takeovers, reorganizations, major managerial changes—can be an enormous distraction (or worse) to the staff and to outside stakeholders.

  So as an executive, what can you do? One effective response is to harness the energy of the grapevine to defuse the rumor, using a story to convince listeners that the gossip is either untrue or unreasonable. This kind of story highlights the incongruity between the rumor and reality. You could use gentle satire to mock the rumor, the rumor's author, or even yourself in an effort to undermine the rumor's power. For example, you might deal with a false rumor of “imminent corporate-wide reorganization” by jokingly recounting how the front office's current struggles involving the seating chart for executive committee meetings would have to be worked out first. Keep in mind, though, that humor can backfire. Mean-spirited ridicule can generate a well-deserved backlash.

  The trick is to work with, not against, the flow of the vast underground river of informal communication that exists in every organization. Of course, you can't ridicule a rumor into oblivion if it's true or at least reasonable. If that's the case, there is little that can be done except to admit the rumor, put it in perspective, and move on.

  Sharing Knowledge

  Much of the intellectual capital of an organization is not written down anywhere but resides in the minds of the staff. Communicating this know-how across an organization and beyond typically occurs inf
ormally through sharing stories.

  Knowledge-sharing narratives are unusual in that they lack a hero or even a detectable plot. They are more about problems, and how and why they got—or didn't get—resolved. They set out a description of the problem, the setting, the solution, and the explanation. Because they highlight a problem—say, the challenge employees face in learning to use a new system—they tend to have a negative tone. And because they often focus in detail on why a particular solution worked, they may be of little interest outside a defined group of people. But although they lack most elements of a conventional story, they are nonetheless the uncelebrated workhorse of organizational narrative.