The Leader's Guide to Storytelling

by Stephen Denning

  The stories that are told and retold in an organization are learning experiences for the participants, whether positive or negative. They are among the principal means by which people are integrated—for better or worse—into the culture.

  Stories Create a Social Bond

  The stories that are told and retold in an organization communicate not only the story itself but also the values of the organization—that is, what one must say in order to be heard in that organization. The storytelling that occurs in an organization involves the actions not only of the people the story is about but also of the person telling the story and the audience consenting to listen to the story. It is through these actions that the relationships of the people are played out. What is transmitted through these narratives is the set of pragmatic rules that constitute a kind of social bond. If the social bond is violated, the transgressor may be ejected from the organization. Here's one example:

  From 2005 to 2010, Mark Hurd was highly successful as chairman, chief executive officer, and president of Hewlett-Packard, the largest information technology company in the world by revenue. On August 6, 2010, Hurd resigned these positions, following the discovery of inappropriate conduct in relation to a claim of sexual harassment made by a former reality TV actress, Jodie Fisher. A probe conducted by HP's board concluded that Hurd had not violated the company's sexual harassment policy but he had infringed the firm's standards of business conduct, in relation to expense claims that did not reveal Hurd's relationship with Fisher. The amounts of money involved in the expense claims were small in comparison to Hurd's compensation, but the board insisted on his resignation. Hurd said he “realized there were instances in which I did not live up to the standards and principles of trust, respect and integrity that I have espoused at HP.”13

  Overall, the telling of stories encourages compliance. The narratives may refer to the past, about who did what to whom, but they are also contemporaneous with the act of reciting them, in the sense that the values implicit in the story—the appropriateness of the behavior—are being strengthened or questioned by the storyteller, as in this example from a computer programmer in the United Kingdom: “Try telling your manager sometime that you want to redesign a piece of code because ‘It's aesthetically displeasing’ or because ‘The design sucks.’ He'll laugh you out of the office and quite possibly the company. Never mind that you were right or that your redesign would drastically improve maintainability and probably speed things up.”14

  The Stories Are Endlessly Repeated

  A characteristic feature of organizational culture is the repetition of the same stories. Stories become mere fragments that need not be retold in full but perhaps only have a label, like “Lehman Brothers!” or “BP!” It's as if in this repetition, people are reminding themselves: “Never forget!”

  Although each telling of a particular narrative may seem to an external observer like the same story, the story continues to evolve as each new storyteller recounts the events slightly differently. In this way, the news of the organization is passed on humor, anxiety, praise, or despair. With each new telling, the story's impact spreads.

  Stories Differ in Different Parts of the Organization

  Stories are used for different purposes at different levels of the organization. At the top of the organization, there is always a core group of people who call the shots.15 The stories this group tells typically reflect the complacencies of power. They generally feel no need to question themselves or their assumptions. Stories told by and about the group reflect the preoccupation with own needs and priorities.16

  In small start-ups, for example, the core group often consists of the founders, an angel-mentor or two, and a confidant. By contrast, a large and complex organization such as General Electric or Procter & Gamble can have hundreds of interlocking core groups, each active in its own division, department, or region. They vie with one another for the attention of the ultimate core group: the people in the CEO's kitchen cabinet. This group generally (but not always) includes the people at the top of the hierarchy. But it may also include people who—because they are respected, popular, successful, or manipulative, or because they control access to some critical bottleneck—have gained the loyalty and attention of others throughout the organization.17

  At lower levels of the organization, there is typically a tangle of informal networks—groupings, coalitions, alliances, and friendships, with the participants linked by background, expertise, region, personal interest, common ambition, or whatever. Here the stories that are told and retold can provide a vehicle for those who are trying to advance their various causes and interests—or to undermine a competing group. They may also constitute a resource for those who regard themselves as subordinated, oppressed, or dispossessed, offering a means of self-expression and solidarity, not too different from the traditional griping of troops in a military unit who exchange experience and information: the general tone here is one of satire, ridicule, and disrespect for those in control and their ideals.18

  This is what the computer programmers in a U.K. company who felt themselves at odds with the management of the time said:

  Managers don't want good code. They want code that you can squat and shit as quickly as possible because the only metric they look at is the deadline. It may not smell good. It may self-destruct in a few months. It will certainly keep your team in “fireman mode” for the rest of the time they're at the company, but by God it made the deadline and that's all that counts.19

  The stories that are told and retold in organizations lend themselves to a variety of functions: they transmit information, also prescribe what ought to be done, question what should be happening, evaluate what is going on, express solidarity, or satirize whatever is regarded as ridiculous. The stories may nevertheless reflect a unified viewpoint. Some common refrains:20

  “How did that jerk get promoted?”

  “Why did the stock price go through the floor?”

  “Where has our pension gone?”

  Narratives told within the organization also tend to flow outward and communicate the persona of the organization to clients and partners—for instance:

  While most airlines strive for a culture that exudes seriousness as ensuring safety, Southwest Airlines has deliberately cultivated narratives that express an atmosphere of fun: its staff persistently make light-hearted and humorous comments that communicate friendliness.

  Stories Reflect the Organization's Health

  Different types of stories can be classified according to the willingness to communicate them to others and the level of agreement on their content. Overt and agreed stories are openly communicated throughout the organization and also willingly communicated to outsiders in the form of publications and newspaper articles. Covert and agreed stories are not revealed to outsiders because they contain sensitive information or business secrets. Overt and contested stories emerge in disputes between management and labor, or when there are accusations of wrongdoing. Covert and contested stories may be told either among the core groups running the organization or among unsatisfied staff and build the basis for conflict. Contested stories at lower levels of the organization cannot be controlled by management.21

  Management literature and managers typically dwell on the stories that are overt and agreed. Other chapters of this book deal with how to effect changes in the overt story, mainly with springboard stories (Chapter Four), future stories (Chapter Ten), or inspiring innovation (Chapter Eleven). Even a healthy organization, however, is likely to have some difference between the stories that occur covertly and the official organizational stories that are overt and agreed. Such differences are particularly likely when organizations are trying to cope with a rapidly morphing environment.

  The advent of transformational change will cause divergence between the official story and the stories that emerge in the underground of the organization. This is because the transformation will inevitably threaten some existing power structures.


  In some objective sense, the transformation may be a win-win situation for everyone. But in any transformation, there will be perceived losers as well as winners, as some careers will be expected to flourish more than others, and some types of expertise will become more important than others. These shifts inevitably cause both hope and anxiety among the participants and become the source of covert stories that will challenge the official story that everyone is a winner.

  Until the transformation plays out, risks and opportunities will loom for participants. The fears and hopes of the participants will emerge in rumors, gossip, and innuendo about the pending change and those responsible for it.

  Back in 1996, when I was pushing for the World Bank to adopt knowledge management as a strategic thrust, I was making the case for change to anyone who was willing to listen to me. In the period before the president of the World Bank endorsed the strategy at the annual meeting in October, I was still in the role of an insurgent. Some years later, I discovered that at the time, the senior managers were referring among themselves to knowledge management as “the Denning problem.” Instead of seeing knowledge management as a strategic opportunity for the organization they had turned it into a surreptitious competition concerning careers.22

  Even when no significant transformation has occurred, the career “losers” may be embittered by the struggle and may seek to exact revenge. “The ideal,” says Robert Baron, a psychologist who has studied workplace reprisals, “is to ruin the other person without him knowing what happened, without him knowing if anything happened.”23

  In an unhealthy organization, dissonance between the covert stories and the official organizational stories will be significant. Management may say that the company has great products or services, is innovative, and has a prosperous future. Staff may not disagree openly with this interpretation but among themselves share their own views of how the company is run, as in Case and Piñeiro's study of a computer programming community:

  Just to make matters worse, a lot of managers believe that if they give their programming teams Rational Rose or Visual C++ or whatever, that those tools will magically make the code the team is producing well designed. Well, if you give a monkey a computer, he's still a monkey and you won't get anything out of him at the end of the day except a bunch of monkey shit.24

  An organization in difficulty will also have a vast underground river of negative storytelling at odds with the official stories being put out by its management. These stories may be invisible to outsiders and even to the management itself. The rest of this chapter discusses the range of feasible alternatives—what is possible and what isn't—as well as usable tools to deal with it.

  Management Cannot Control the Flow of Stories

  While the top managers may have formal power over much of what happens in the organization in terms of structure, strategies, plans, programs, budgets, schedules, salaries, hiring, firing, promotions, and the like, one thing they don't control is the ongoing and relentless process of organizational storytelling. They may, of course, use their hierarchical power to compel the staff to listen to their stories. But they can't control how much attention the members of the organization will pay to their stories or how the staff will retell those stories among themselves. The managers' stories may be retold by the staff with approval and support in those organizations where managers and staff are largely in accord, or with derision and contempt in those organizations where there are divisive tensions between managers and staff—for example:

  I like to write beautiful code … as I imagine most real programmers do … us geeks that live, breathe, and dream in code … but in real life, there usually is not enough time or resources given to manage to write really well planned out code.25

  In organizations with significant disagreements between managers and staff, the managers are often barely aware of the stories being told and retold among the staff, particularly stories critical of the organization and its managers. Given the actual or perceived sanctions flowing from any discovery by the managers of the telling of such stories, managers can usually discover their existence only indirectly, and even then only partially. Direct requests to the staff to retell the stories to the managers are likely to yield only anodyne versions. The use of ostensibly independent researchers may elicit more of the stories, if assurances of confidentiality are believed. Even with a significant effort, managers thus usually have a very incomplete understanding of the stories being told in their organization.

  The Need to Tame the Grapevine

  Managerial unconcern about the stories being told by staff may reflect a view that what you don't know can't hurt you—mere gossip, rumor, the usual whining and griping—nothing to worry about! There is, however, a significant risk that any substantial divergences between the overt official strategies and plans of the organization and the covert negative stories being told and retold by the staff will constitute a significant impediment to the work of the organization, particularly where any major change in behavior is under way. It is also likely that the covert negative stories will eventually flow out of the organization and have a corrosive effect on interactions with customers, partners, and analysts. It is therefore important for leaders to identify such divergences as early as possible so as to understand what is occurring and do something about it.

  The ongoing flow of storytelling cannot be stopped by managerial fiat any more than a river will stop flowing or the tide will stop rising as a result of a king's instruction. But leaders do have narrative options for dealing with the underground flow. In effect, they can fight story with story.

  Taming the Grapevine

  Since corporate culture is embodied in the ongoing narratives that are told and retold in any organization, one way of altering the situation is to inject a new story into the flow in an effort to change its nature and direction. One fights rumor or gossip not with arguments or decisions but with counter-stories.

  Use Satire to Kill a Rumor

  To scotch a rumor or a piece of alleged bad news, you may be able to use gentle satire to mock what's being said or its author, or even yourself. Success on any of these fronts can undermine the impact.

  Humor can draw attention to the absurdity of rumors and invite the reader to conclude: This is unreasonable! It couldn't be true! How ridiculous for me to have taken this seriously!

  The particular form of humor involved is satire. Most jokes are not satires: rather they play on the existing views and prejudices of the audience and leave the listeners' perspectives untouched. A satire aims at subverting the listeners' beliefs, perhaps permanently.

  Although stories to tame the grapevine are usually remarkably brief, they are tricky to construct but immensely powerful when successful. Such stories typically seize on some hidden or unexpected aspect of the bad news and point out the incongruity.

  Bill Clinton: Campaigning Against an Unreasonable Attack

  An interesting example from U.S. politics comes from the early stages of the 1992 U.S. presidential campaign: President George H. W. Bush was relentlessly attacking Hillary Clinton as unsuitable to be First Lady after she had admitted that she hadn't spent her adult life baking cookies. White House sponsorship of the attacks ended when the Clinton campaign responded by saying, “George Bush isn't running for President—apparently he's campaigning to become First Lady.”

  Bill Clinton: Whitewater

  President Clinton spent much of his presidency under investigation for a real estate matter in Arkansas known as Whitewater. Eventually, after years of investigation and many millions of dollars spent, no wrongdoing by Clinton was discovered. However, during his presidency, the Washington journalists had made Whitewater a household word. During the ordeal, Clinton used self-deprecatory humor at a dinner for journalists: “I am delighted to be here tonight. And if you believe that, I have some land in northwest Arkansas I'd like to sell you.”

  But having taken his self-administered medicine, Clinton then clearly savored the opportunity
to deliver a broadside at those who had spent the last few months poring over his financial records: “I don't want to alarm any of you, but it's three days before April 15, and most of you have spent more time with my taxes than your own.” And then in gently taunting, singsong voice, he said, “Many happy returns!”26