As I keep repeating, businesses need to find time to develop a business strategy. At the end of the day a business strategy is merely a tool to achieve competitive advantage. It requires a thorough understanding of the company’s starting position, its aspirations and capabilities, those of its competitors, the needs of its customers and the dynamics of the situation. However a clever strategy on paper is only the starting point. Strategies must also be communicated and understood. They must motivate action. To achieve that you need to persuade.
Most strategy documents and presentations fail miserably when it comes to being able to motivate action and to persuade. Many times it is because such presentations are not built on the knowledge of how people can be persuaded. In essence, we are all persuaded through three different ways – logic, emotions or credibility. Many strategy documents and presentations try to fulfill only one method to persuade people – by presenting facts and researched outcomes and hence addressing only the rationale or logical way of persuading people.
This is why strategy documents need to include a story – a strong narrative. This would provide a powerful bridge between facts, arguments and actions. In fact such a story can be defined as a narrative that is designed to engage. In other words, a story is not just about what is communicated, but also how it impacts its audience. A story would address the other methods I outlined in how people can be persuaded, mainly through emotions.
After all, humans understand the world through the stories we tell. Our brains are primed to understand narratives. Behavioral economics has demonstrated that people are not fully rational actors, motivated by facts and logic alone. Stories can bind the logical ingredients of a strategy into an engaging narrative which can move their audience to act. Few would drive more carefully if presented with a dry list of road accident statistics. Many more would be motivated to do so by a vivid story of the dire consequences of not driving carefully.
Building a story about any company’s business strategy, also ensures that any business strategy does not remain the domain of corporate leaders. After all any business strategy and possible transformation process linked to it, will require action by all those implementing such strategy. Which brings me to draw your attention to one word of advice, as I have seen various business strategy efforts that suffered by a very serious and common mistake. Any strategy process needs to be open to employees, especially those close to customers or competitors. This makes sure that the resulting strategy can be both better understood and owned. This also means that the a strategy process isn’t about retroactively attaching a narrative to your strategy — they work best when developed together with your team.
To build a strategy story, from any business strategy document, the following elements should be covered:-
- Establish the facts: The basis of any strategy narrative should be based on facts. Facts with regards your customers’ behaviors, your revenues, how revenue has changed over time, what triggered these changes, amongst others.
- Leverage the power of questions: In any strategy process, there is a tension between structure, necessary to ensure rigor and alignment and exploration. Questions, deployed in a thoughtful order, can invite structured exploration, while maintaining overall coherence. They can also surface specific details that will make your story vivid and memorable.
- Write your strategy story: A story should have a clear beginning, middle and end. The same goes for a strategy — it should outline the past, present, and future. Ultimately, you’ll have a narrative that begins with what the company does, describes what needs to change, and ends with what the company will be doing in the future.
- Test your story: To test your strategy story, try it on internal audiences which will need to understand and implement it and stakeholders who will need to endorse and adopt it. Be on guard for common pitfalls by probing frankly: Is it digestible? Does it engage? Is it motivating? Is it clear what is to be done by whom?
- Tell the story: The last step is to prepare the story for telling, reducing it to an essential core, while retaining essential details and making a compelling case for action. Ask yourself if your company’s strategy can be related to and understood in five minutes or less. Think about whether its focus can be reduced to a few central issues. Test whether it has been not only been understood but retained and valued as a guide to action for each individual who will be charged with implementation. Then, make sure to re-tell and discuss the strategy story repeatedly and not just once.
The best way to make business strategies more effective is through stories because it is through stories that we understand and care. Well-told stories make both the teller and the listener wiser. Through stories, mere facts and information are turned into a shared mental model of how the business works and where it is heading. Knowing how to construct such a strategy story will not only improve implementation but also greatly increase a company’s rate of learning, which can be a key source for competitive advantage in today’s fast-paced world.
It is with all this in mind that at EMCS we have worked hard to develop the holistic Business Reality Check service. One of the area covered by such a service is to help family businesses and SMEs undergo proper strategic planning, whilst building a planning culture and also making sure that management has the right skills to communicate the key decisions that derive from the strategic plan. Click HERE to review what the Business Reality Check is made of.