Strategy Informs. Narrative Engages. Leaders Need Both.

Having a well-defined, coherent strategy is essential in a growing business to establish priorities and direct behavior across an increasing number of employees.  

Indeed, strategy is necessary, but by itself, it is insufficient from a leadership perspective.

Why? Because even the most brilliant business strategy is transactional rather than relational. It is fact-based, data-driven, rooted in business logic, and on and on. In this sense, it can provide some assurance and even confidence in the likelihood of success. But it doesn’t engage stakeholders. It doesn’t inspire and enroll team members.  And it doesn’t particularly empower leaders other than reinforcing their authority, to the extent that they seem aligned with the specifics of the strategy.

Rather than relying on “raw” strategy alone, effective leaders can embed the strategy in a compelling narrative that engages stakeholders by describing a transformational era in the company’s emerging history and journey toward its mission and vision. The era covers a period long enough to accomplish significant changes in the organization (certainly longer than one year), but near enough to create some urgency about making progress. If the business faces significant risk, the level of urgency can be dialed up through the narrative.

The narrative provides the communications “wrapper” to the core strategy. In fact, I’ve found that the word “strategy” is understood in so many ways that I avoid using it in creating the corporate narrative. It’s true that within the executive team, there needs to be agreement about what strategy consists of, and what the company’s particular strategy is. But that sausage-making can happen within the C-Suite: the narrative, developed subsequently, can serve all stakeholder groups, including investors, board members, middle management, employees, customers, etc.

Strategy inevitably calls for an intentional change of state for the organization. The narrative describes the transformed organization as a destination; the major initiatives the company is undertaking to accomplish the change; and provides the necessary context to empower both management and individual contributors. Importantly, the narrative also provides connection points to core business processes and functional areas such as performance management, annual planning and budgeting, and talent development.

In this leadership environment, once a company grows beyond its initial promise into a viable organization, the company’s business strategy becomes a technical artifact produced by the executive team. The corporate narrative becomes the connection point between strategy and leadership, and a platform for driving change in the organization.

How does your company express its strategy to intimate stakeholders? What name would you give the era that your business is currently working through, and what change of state is happening? How do your leaders create awareness of and drive behaviors around this change?