Strategy and Story-Telling: What Could Possibly Go Wrong?

I often think of Strategy as an act of leadership in creating and reinforcing shared purpose, direction, and momentum for an organization. In this sense, articulating Strategy is a tremendous creative challenge: how best to persuade stakeholders of all types – employees, investors, partners, customers – to buy in to a shared mission and the plan to achieve it?

Of course it’s challenging! Strategy is all about anticipating the outcomes of highly uncertain future events. Plausibility is only the beginning of the leadership dimension – you’re hoping to create meaning for people and to engender authentic buy-in, particularly since the future will no doubt throw some obstacles in front of your Strategy, inviting fear, uncertainty and doubt into the equation. Even though it is (usually) based on a set of perceived facts, Strategy starts out as fiction with the belief that it will become history.

In recent years much has been written about the efficacy of story-telling – or narrative – in articulating strategy. Contrasted with economic theory about rational actors and data-driven decision-makers, narratives are acknowledged to be easier to remember and relate to, harkening back to the most basic needs and desires of humans to relate to each other.

My colleagues and I use the construct of a Strategic Narrative to express corporate strategy. For us, the word Narrative connotes coherence, logic, and process – a plausible journey toward an appealing destination. There are quantitatively driven elements in the Narrative, such as TAM/SAM/SOM estimates, but also highly qualitative components such as Category life cycle analysis and differentiating assets and capabilities. Above all, a powerful Narrative is based on an over-arching sense of progress to achieving a higher purpose or mission. Connections to story-telling and its persuasive benefits are easy and logical to make.

That doesn’t mean Narrative creation can’t be done badly or without noble intent. Here are some ways that Strategic story-telling can go sideways.

• Self-contradicting – all of the elements of the story have to work together, or at least acknowledge the challenges to its coherence. We see this perhaps most frequently with the idea of sustainable competitive differentiation and the analysis of the competitive environment. Is the company’s moat really a moat?
• Selective inclusion – while it’s true that strategy creators can choose what to include and exclude in their narrative, as well as what receives particular emphasis, they should also be able to answer why any apparently relevant aspect of the environment was left out or downplayed.
• Implausible heroism or achievement – has the leadership team established its credibility to accomplish its “incredible journey”?
• Stakeholder/listener imbalances – making (and keeping) investors, employees, and customers –all of whom have potentially conflicting interests – “happy” with the Strategic Narrative can be extremely challenging. Maintaining consistency across engagements with all three is critical.

Beyond these issues of quality, there can be ethical questions raised by Strategy stories when they get into the area of truth, honesty, and control. Lawrence Freedman’s Strategy: A History raises the link between official narratives, propaganda, and expectations for allegiance in the face of objective facts. The destination may be further away than originally thought, or more difficult to reach, or perhaps much less desirable than it was first described. People and technology may prove far less effective than expected. How does the Narrative hold up as reality unfolds? And how does leadership respond? How does Strategy evolve?

Among examples of “worst practices,” the unraveling of the blood testing company Theranos in the 2010’s included denial of under-performing technology and outright deception of many stakeholders in the name of progress toward the company’s mission – and demanding that line level employees compromise their integrity by lying about test results, which ultimately put patients’ lives at risk. This is certainly an extreme case and includes raising questions of mental well-being among the leaders of the company. But there are just as surely less-extreme-but-still-highly-questionable examples of leaders who manipulate stakeholders to support a strategic narrative gone awry. I am always fascinated by how Strategy is expressed at a company, and how leadership uses it to create shared purpose. The use of stories certainly has tremendous potential, but should be undertaken with care and forethought. Over time, you will come to understand stories about your stories, which perhaps offers the most valuable leadership lesson of all.