The Power of Story

“Our company was losing value, and customers were turning away from us.  We had lost the power of our story.  We started as a brand committed to not only making great coffee but creating a great customer experience in an environment of committed employees.”  Howard Schultz, CEO Starbucks.

Mr. Schultz understood the importance of narrative in turning around his company.  He did not say we had lost the focus on our bottom line profits, or the taste of our coffee, or the style of our stores.  He said they had lost the narrative and it had to be saved or Starbucks was going to crash.  To his credit, he resurrected the story and the stock has followed suit. 

Every individual, company, neighborhood, institution, and nation has a story - a narrative that is being lived out - for good or bad.  Your narrative embodies the myths, conflicts, and emotions of the primary forces that are at work in making your story positive, negative, or just blah. 

For instance, as a country, what is the central narrative that embodies America?  Our core narrative is found in the Declaration of Independence: “We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights.”  And while the Declaration was the tip of the iceberg, our national narrative beneath it’s surface has been shaped over the last two and a half centuries. Great political leaders understand that whoever can craft the most compelling story for the American people is the party who wins the next election.  It’s not about rational arguments supported by lots of data. It’s about capturing the imagination of voters.  Just as it goes for nations, so it goes for companies.  Howard Schultz knew he had lost control of the Starbuck’s narrative and he had to win back the hearts of the customer.    

So let me ask you this: What is the narrative of your company or your non-profit?  What is the story you tell that resonates with purpose, meaning, and connection with your customers, your suppliers, and shareholders?  If it’s a war metaphor - defeat the other guy by being top dog in your industry - your narrative will have little traction with your customers, but will appeal to highly competitive people inside your organization.  If your central narrative is about profit - make the most money possible - your narrative makes you the villain with your customer and you will ultimately lose the  connection with your customer base. 

However, if your narrative is centered around meaning, purpose, and inspiration, you are in a great position to develop deeper loyalty with your followers.  In the beginning, Starbucks redefined coffee from being a simple commodity to also being a connector of people - one cup of coffee in one neighborhood at a time. Starbucks designed their products, services, and architecture around this narrative, down to every detail of their store.  Customers experienced what worked and did not work.  They felt which details were in alignment and which were not. When a detail was not in alignment, they let other’s know about it on Yelp.  When Howard Schultz retired, Starbucks started expanding quickly and lost focus. They tried to put stores everywhere. The stores lost their sense of intimacy and coziness. Baristas were not as well trained. Jay Leno joked that Starbucks was building a store in his closet.  So Mr. Schultz recaptured the narrative.  He now talks about each store as nurturing the human spirit through one cup of coffee, one conversation, one place at a time.  He is not into market saturation, but emphasizes the Starbucks narrative so that market growth comes through valuable customer experience. 

As you lead your company, do not overlook the power of your narrative as it is experienced through the eyes of each of your stakeholders.  Your audience wants to know why you are providing them your product or service and why they should care when they deliver that product or service as an employee or supplier.   A great answer to the  question about your narrative assures the customer, employees, and other stakeholders that you are working for more than just the money.  Your vision is much deeper than just being “a model in your industry”, or being “the largest single provider.” 

Each industry has the potential for it’s own unique narrative. In health care, for instance, a positive narrative can be anchored in a passion for health and healing.  You need to find the narrative that differentiates you from everyone else.  At United Stationers, a multi-billion dollar company which distributes office supplies, the narrative is about service to others - helping all of the stakeholders be successful. Their competitors focus more on “lowest price” - thus missing the fact that they are in the service business and must get close to their customer..

So first, develop a deep understanding of the narrative you are creating to differentiate your brand. Your narrative signals who you are — as an individual, a company, or a nation. Your narrative starts with looking back at the past -  the stories, myths, and anecdotes created by you and your company. It progresses to the present as you create relationship with your customers, suppliers, employees, shareholders, and your community.  It continues with the future - way out there - where you can create what you want  people to say and the story they will tell others. The future narrative is best when it embodies the best elements of what you can deliver in the marketplace.

Here’s a helpful exercise.  Write out, “What is the narrative of our company?” Then write out, “What do we want it to be?”  Ask others who admire you what they say about you.  Don’t worry so much about the dissenters.  Start with the admirers. Once you start to get clarity, then ask how you can take your story and express it in every detail on a daily basis in every element of your business. 

As a community of learners, I’d love to see your comments and ideas.

* If you want to learn more about the power of narrative, I recommend you visit the works of both David Altschul and John Hagel.  Both thought leaders have helped to transform, through the power of narrative, some of the biggest brands in America. 

Questions on Leadership

After Luca Luigi Rosi, a London-based journalist, read my Harvard Business Review blog, he wrote to ask me some questions on leadership so he could post them for his readers.  I think his questions and my answers might stimulate your own thinking around the foundational principles of leadership.  Please take a look at the last question and do yourself a quick favour - answer the question yourself.  If you’d like, please post your comment for all of our readers - we can learn together and have some fun.  Thanks!

Luca:  If there’s one lesson to be learned about good leadership, what would it be?
Doug:  Most leadership books are formulaic and miss the key point that what is needed from leaders depends on the situation.  A country in a crisis needs a different type of leader than a country that is growing and reinvesting.  An organization that needs to be turned around needs a different kind of leader than an organization that needs to scale by a factor of ten.  Leadership and it’s behaviors are always determined by context.  The lesson here for a person who aspires to be a leader is to know what you can be great at and find the right context to express your talents.  For instance, I’m best at growth opportunities where the pie is ever expanding.  I’m not great at turn-around situations nor at leading incremental change.  I need to find companies I can help lead who want to grow in a significant way. 

Luca:  The frontline is the bottom line. Do you think leaders are visible enough?
Doug:  Too many leaders are not involved in the gritty encounters where engagement with the customer is realized.  In this age of transparent social networks, leaders are becoming much more aware of how important it is to improve the customer experience at the front lines.  The problem is that many try to solve this problem with complex “customer experience surveys.”  Data is inputted and executives analyze it.  The data from the surveys is certainly helpful but often misses discovering the real opportunities for improvement.  For instance, I can tell you in a survey what I liked or did not like, but I’m not going to suggest a more creative way for your company to handle your overall customer experience process.  The best way for a leader to design innovative improvements is through face-to-face interactions with both real customers and real employees at the front lines. 

Listen to the underlying story being told when you talk with a customer or employee – the narrative that is being woven about your company.  Are you proud of it?  Does the story inspire customers and does it motivate your associates to be their very best for others? Bottom line, there is no substitute for interactive visibility by a leader.   

Luca:  What are the behaviors that leaders should be rewarded for? 
Doug:  Again leadership is determined by context.  However, in general the modern connected economy requires leaders to craft new capacities such as:   

  1. First and foremost, crafting a narrative that speaks to your entire community of involved stakeholders.  If you as a leader can appeal to each constituent’s desire for meaning, purpose, connection, and the feeling that you are building an important community of stakeholders who can make a difference in this world, then you understand not only the power of a pay check, but also the power of your narrative to inspire the best in all of your stakeholders. 
  2. Thinking about your organization in the context of a total system and how the system serves the larger purpose.  Dr. Michael Maccoby, a renowned expert on leadership, refers to this as Strategic Intelligence.
  3. Collaborating across teams and organizations to build synergy toward the common purpose.
  4. Partnering with your broader community of stakeholders, including shareholders, suppliers, and potential joint venture partners.  For instance, Master Card partners with mobile telephone companies to build simple payment systems without a plastic credit card.
  5. Knowing your strengths – surrounding yourself with the best people possible to compliment your strengths.  Do not underestimate the importance of picking great people that compliment your own abilities.

Luca:  Leading by example – your top three takeaways. 

  1. Leaders cast a big arc of sunshine or darkness.  If you want to Lead By Example, you have to Be The Example. Everyone is watching how you behave and they will emulate your actions.  Therefore, always ask, “Is my behavior in this moment something I want others to imitate when I’m not present?”  If you can’t give a big affirmative “yes,” then first change your behavior.
  2. Reinforce behaviors in others that support the culture you want to build.
  3. Put a firm boundary around behaviors you do not want to see in the organization.  The actions you disapprove of are more important than the ones you support.  People will take notice and word travels fast.  

Luca:  What advice would you give me to get ahead in my chosen career?
Doug:  The best advice I can give an emerging leader is to listen to your own personal narrative – what are you most passionate about and how do you want others to describe the contribution you are making in the world?  Ask the question, “What will others say about how I help them change their world?”  Focus on your narrative from the point of view of the contribution you make to others – not about how wealthy or powerful you will be.  Your best bet to get ahead is to do something significant that helps others get ahead. 

Focus Time: How to Improve Strategic Decision Making

A wise comedian said, “10% of the world thinks, 20% thinks they think, and 70% would rather die than think.” In this age of continuous distractions, even the 10% may be decreasing! My own biggest challenge in this equation is to carve out time to think deeply about the most important questions I face in business and life planning. It’s all too easy to get absorbed in the day to day routine, and bounce from one captivating topic to another. Focused attention is different. And it’s difficult. To have true success with focus, it’s vital to have the tools, methods, and disciplines to get you there. One key tool I have incorporated into my own life is the practice of structured focus time. Below is a story of a female CEO who saved her company from loosing millions of dollars in value because she took time to incorporate this tool. Here is her story.

Stop, Think, and Change Your World

Dawn was facing a dilemma. Her company had grown from a little start-up to a thriving business in a digital media space. Revenues had peaked and were no longer increasing. Dawn needed time to think about the future. She set aside a block of time to STOP and BREAK HER ROUTINE. She went to a private setting where she knew she would be undistracted and thus open the avenues to creativity. She cut out emails and phone calls. She committed to letting these pile up until 2:00PM, so that from 8:00AM to 2:00PM she worked alone. She turned her cell phone off, knowing that if she answered even one phone call, she would leap into a completely different brain wave and derail her ability to concentrate and focus on the most important question: “What is the biggest risk we face today as a company and how do we mitigate this risk?” She took time to READ, REFLECT, AND REWRITE her assumptions about the business. She recognized that the habits and strategies that got her company to where they were today were not the habits and strategies that would get them to the next level. Something had to change.

Here is the routine I coached Dawn to use for Focus Time:

1. Start by reading something strategic, perhaps from one of the favorite classics in business, Good to Great. Take forty five minutes to an hour just to get the mind in gear.

2. After that hour of solid intake, start to jot down ideas. You can use an iPad, but there’s something about the creative act of pen to paper that puts your brain on a different path. Ask two simple questions : What is the biggest risk we face today as a company? How can we defend against this risk and survive to grow again? Write out your company’s strengths, the threats, the larger vision. Then, let yourself go, and write about what has been gnawing at you deep inside your “gut feelings.” In Dawn’s case, she scrawled that the company could no longer compete effectively against the rising behemoths in the industry. Worse, she felt she did not have the capital nor the right people to engage in the fight to get back on top.

3. Take a refresher break after writing and thinking; go for a walk or do something that will let your mind roam and reflect. Give your mind the freedom to connect loose dots together. Take 60 to 90 minutes so you’re fully refreshed. Then come back to your note pad and begin to write down more ideas; put pen to paper and let it flow - honestly. Dawn recorded three brutal facts: 1. Her company had grown swiftly. 2. New well capitalized competitors had entered her market space. 3. Her revenues were declining.

Dawn came away from her Focus Time with one key question: “Should we sell the company and prevent the destruction of further value?” She engaged two key advisors, one of whom was a venture capitalist. He encouraged her to sell, giving a very strong rationale. She then engaged the management team, and through a series of meetings, all held in a short time frame, the consensus was that it was time to sell and avoid the risk of a major loss in value. The decision was gut wrenching, and would not have been faced as directly if Dawn had not taken the necessary time to focus her own thinking, listening carefully to both her rational mind and her gut instincts. Ultimately, the company was sold and she saved the company from destroying millions of dollars of value by trying to compete in a space that would have been nearly impossible to win.

The lesson is not that focus time always produces a great decision. The lesson is that without focus time, you increase the probability of missing a key strategic question you need to be answering and acting upon. Leaders must step out of the flowing river, move to the banks, and sit thoughtfully to observe what is happening. Through focused attention, the problems have an opportunity to crystalize in your mind. So ask yourself two questions:

Do you take regular time alone to STOP and THINK about the future of your organization and the future of what you are trying to create as a leader?

What is the most important question you need to be asking yourself? Write it down and then block out time to FOCUS, REFLECT, AND DISCUSS with at least two key people. Don’t let yourself get distracted. Be part of the 10% who actually think - and change your world for the better as a result.