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"The LEADER’S GUIDE to STORYTELLING • M A S T E R I N G T H E A R T and D I S C I P L I N E of MASTERING THE ART DISCIPLINE BUSINESS NARRATIVE STEPHEN DENNING author of STEPHEN DENNING author of The LEADER’S GUIDE to STORYTELLING MASTERING THE ART DISCIPLINE STEPHEN DENNING author of The LEADER’S GUIDE to STORYTELLING • M A S T E R I N G T H E A R T and D I S C I P L I N E of MASTERING THE ART DISCIPLINE BUSINESS NARRATIVE STEPHEN DENNING author of STEPHEN DENNING author of Copyright © 2005 by John Wiley & Sons, Inc. All rights reserved. Published by Jossey-Bass A Wiley Imprint 989 Market Street, San Francisco, CA 94103-1741 www.josseybass.com No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, scanning, or otherwise, except as permitted under Section 107 or 108 of the 1976 United States Copyright Act, without either the prior written permission of the Publisher, or authorization through payment of the appropriate per-copy fee to the Copyright Clearance Center, Inc., 222 Rosewood Drive, Danvers, MA 01923, (978) 750-8400, fax (978) 646-8700, or on the web at www.copyright.com. Requests to the Publisher for permission should be addressed to the Permissions Department, John Wiley & Sons, Inc., 111 River Street, Hoboken, NJ 07030, (201) 748-6011, fax (201) 748-6008, or online at http://www.wiley.com/go/permission. Jossey-Bass books and products are available through most bookstores. To contact Jossey-Bass directly call our Customer Care Department within the U.S. at (800) 956-7739, outside the U.S. at (317) 572-3986 or fax (317) 572-4002. Jossey-Bass also publishes its books in a variety of electronic formats. Some content that appears in print may not be available in electronic books. Text design by Yvo Riezebos Design Permission credit lines are printed on pages 359–360. Library of Congress Cataloging-in-Publication Data Denning, Stephen. The leader’s guide to storytelling: mastering the art and discipline of business narrative/Stephen Denning. p. cm. Includes bibliographical references and index. ISBN-13 978-0-7879-7675-0 (alk. paper) ISBN-10 0-7879-7675-X (alk. paper) 1. Communication in management. 2. Business communication. 3. Public speaking. 4. Leadership. 5. Organizational communication. I. Title. HD30.3.D457 2005 658.4'5—dc22 2005003105 Printed in the United States of America first edition HB Printing 10 9 8 7 6 5 4 3 2 1 [ Introduction 1 CONTENTS ] xi 1 3 The purpose of the book and the process by which it came to be written. Part One: The Role of Story in Organizations Telling the Right Story: Choosing the Right Story for the Leadership Challenge at Hand Narrative can add value to eight major leadership challenges. Based on the author’s personal journey of discovery, the chapter offers a catalog of narrative patterns and a costbenefit analysis of organizational storytelling. 2 Telling the Story Right: Four Key Elements of Storytelling Performance In an organizational context, telling the story right usually begins by choosing a plain style in which you tell the story as though you are talking to a single individual. You tell the truth as you see it, and prepare carefully for the performance. In the actual performance, you make yourself fully available for the audience and endeavor to connect with them as individuals. 25 Part Two: Eight Narrative Patterns 3 Motivate Others to Action: Using Narrative to Ignite Action and Implement New Ideas The challenge of igniting action and implementing new ideas is pervasive in organizations today. The main elements of the kind of story that can accomplish this—a springboard story—include the story’s foundation in a sound change idea, its truth, its minimalist style, and its positive tone. 45 47 vii Contents 4 Build Trust in You: Using Narrative to Communicate Who You Are Communicating who you are and so building trust in you as an authentic person is vital for today’s leader. The type of story that can accomplish this is typically a story that focuses on a turning point in your life. It has a positive tone and is told with context. Sometimes it is appropriate to tell your story, but sometimes it isn’t. 77 5 Build Trust in Your Company: Using Narrative to Build Your Brand Just as a story can communicate who you are, a story can communicate who your company is. A strong brand is a relationship supported by a narrative. It’s a promise the organization has to keep, and it begins by making sure that the managers and staff of the organization know and live the brand narrative. The products and services that are being offered are often the most effective vehicle to communicate the brand narrative to external stakeholders. 102 6 Transmit Your Values: Using Narrative to Instill Organizational Values Values differ: there are robber baron, hardball, instrumental, and ethical values; there are personal and corporate values, and espoused and operational values. Values are established by actions and can be transmitted by narratives like parables that are not necessarily true and are typically told in a minimalist fashion. 121 7 Get Others Working Together: Using Narrative to Get Things Done Collaboratively Different patterns of working together include work groups, teams, communities, and networks. Whereas conventional management techniques have difficulty in generating highperforming teams and communities, narrative techniques are well suited to the challenge. 149 8 Share Knowledge: Using Narrative to Transmit Knowledge and Understanding Knowledge-sharing stories tend to be about problems and have a different pattern from the traditional well-told story. viii 178 Contents They are told with context, and have something traditional stories lack: an explanation. Establishing the appropriate setting for telling the story is often a central aspect of eliciting knowledge-sharing stories. 9 Tame the Grapevine: Using Narrative to Neutralize Gossip and Rumor Stories form the basis of corporate culture, which is a type of know-how. Although conventional management techniques are generally impotent to deal with the rumor mill, narrative techniques can neutralize untrue rumors by satirizing them out of existence. 201 10 Create and Share Your Vision: Using Narrative to Lead People into the Future Future stories are important to organizations, although they can be difficult to tell in a compelling fashion since the future is inherently uncertain. The leader can tell a future story in an evocative fashion or use a springboard story as a shortcut to the future. The differences between simulations, informal stories, plans, business models, strategies, scenarios, and visions are reviewed. 224 Part Three: Putting It All Together 11 Solve the Paradox of Innovation: Using Narrative to Transform Your Organization None of the six main traditional approaches to transformational innovation actually work, and there are pitfalls in trying to avoid the challenge of innovating. Nonetheless, the problem of disruptive innovation can be solved through interactive leadership using (among other things) a portfolio of narrative techniques. 245 247 12 A Different Kind of Leader: Using Narrative to Become an Interactive Leader Effective use of the full array of narrative techniques entails becoming an interactive leader, that is, a kind of leader quite different from a conventional command-and-control manager. The interactive leader is someone who participates, who connects, who communicates with people on a plane of equality and is relatively free of ego. ix 280 Contents Notes Bibliography Acknowledgments About the Author Write to the Author Index 305 323 335 337 339 341 x [ INTRODUCTION ] This book is an account of a simple but powerful idea: the best way to communicate with people you are trying to lead is very often through a story. The impulse here is practical and pedagogical. The book shows how to use storytelling to deal with the most difﬁcult challenges faced by leadership today. The Different Worlds of Leadership and Storytelling Storytelling and leadership are both performance arts, and like all performance arts, they involve at least as much doing as thinking. In such matters, performers will always know more than they can tell. I have tried to convey here as much as I can of what works—and what doesn’t—at the intersection of the two different worlds of leadership and storytelling. For the ﬁrst several decades of my working life, I remained ﬁrmly in the world of leadership and management. Speciﬁcally, I was a manager in a large international organization. The organization happened to be the World Bank, but had it been any other large modern organization, the discourse would have been essentially the same—rates of return, costbeneﬁt analyses, risk assessments, performance targets, budgets, work programs, the bottom line, you name it. The organization happened to be located in the United States of America, but the discourse would not have been much different if it had been situated in any other country. The forces of globalization have rendered the discourse of management and organizations thoroughly international. It’s a world almost totally focused on analysis and abstractions. The virtues of sharpness, rigor, clarity, explicitness, and crispness are everywhere celebrated. It’s a world that is heavy with practical import: the fate of nations and indeed the economic welfare of the entire human race are said to rest on the effectiveness of the discourse. It was the force of circumstance, rather than temperament, that led me away from the world of the boardroom, the negotiation table, and the xi Introduction computerized spreadsheet to a radically different world—the ancient performance art of storytelling. At the time, I was facing a leadership challenge that made the traditional tools of management seem impotent. In trying to communicate a new idea to a skeptical audience, I found that the virtues of sharpness, rigor, and explicitness weren’t working. Having spent my life believing in the dream of reason, I was startled when I stumbled on the discovery that an appropriately told story had the power to do what rigorous analysis couldn’t—to communicate a strange new idea easily and naturally and quickly get people into enthusiastic action. Initially, the idea that storytelling might be a powerful tool for management and leadership was so counterintuitive and contrary to my entire education and work-life experience that I had difﬁculty in believing the evidence of my own eyes. In fact, it took me several years to admit to myself that I was being successful through telling stories. “Soft.” “Fuzzy.” “Squishy.” “Emotional.” ”Fluffy.” “Anecdotal.” “Irrational.” “Fantasy.” “Fairy stories.” “Primitive.” “Childish.” These were just some of the terms that the advocates of conventional management hurled at storytelling, which they saw as contaminating the world of pure reason with the poison of emotions and feeling, thereby dragging society back into the Dark Ages. It took a certain amount of intellectual courage to brave this disdain and suggest that the world of rational management might have much to learn from the ancient tradition of narrative.1 To build up intellectual stamina to face these challenges, I spent time in the radically different world of storytelling. Not that I was made to feel particularly welcome there. On the contrary, I was initially greeted as an interloper—someone who risked sullying the noble tales of glorious heroes and beautiful heroines, the ﬁgures who made the imagination soar and the heart leap, with the shallow, mean, and dirty world of business, commerce, and making money. To some, I was borrowing the magic language of narrative to accomplish something for which a tersely worded “ﬁt-in-or-you’re ﬁred” memo might be more suitable. The possibility that I might be trying to subvert the “ﬁt-in-or-you’re-ﬁred” approach to solving human problems wasn’t always plausible. xii Introduction What made my reception worse was that I didn’t enter the world of storytelling on bended knee in a mood of respectful submission to drink from the ancient fonts of wisdom and accept without question what had been known for millennia about the elements of a well-told story. Instead I arrived with an iconoclastic attitude, suggesting that perhaps it was time to reexamine the eternal verities of storytelling that had been passed on ever since the time of Aristotle. I implied that it might be healthy to throw back the curtains and open the windows and get some fresh air and light on some of these dusty old traditions. To the world of storytelling, this was heresy of the gravest kind. The suggestion that the ancient world of storytelling might actually have something to learn from organizations was as absurd as it was horrifying. The Intersection of Leadership and Storytelling The result was that for some years I found myself uneasily inhabiting these two different worlds—each profoundly suspicious of the other, each using discourse that supported the validity of its own assumptions and conduct, each seemingly unable or unwilling to grapple with what it might learn from the other. Storytellers could talk to storytellers and managers could talk to managers, but managers and storytellers couldn’t make much sense of one another. And what little they did understand of the other side’s discourse, they didn’t much like. As I gradually learned to converse, more or less successfully, in both worlds, I found myself in the role of go-between—someone who reported back from the other world, much as in the thirteenth century Marco Polo reported on his trip to China, telling astonished Venetians that there were strange and wonderful things in that distant world if you took the trouble to go there and check it out. Just as Marco Polo discovered, the very strangeness of my tale rendered my credibility questionable. Occasionally when I would make a report to managers of what was going on in the world of storytelling, or to storytellers what was happening in the land of management, one of them would say, “How interesting!” And that is one of the points of this book: to point out matters of xiii Introduction profound interest to both the world of storytelling and the world of leadership. So when in this book I take potshots of various kinds at both the world of management and the world of storytelling, please see that they are fragments of a lover’s quarrel. If I didn’t care deeply about both these worlds, it wouldn’t be worth the hassle to undertake the role of dual ambassador.2 One of the factors driving me was the awareness that the average manager was not having such extravagant success in meeting leadership challenges that there was no need to learn. Let me cite just a few statistics of the kind that managers love to hang their hats on: • Study after study concludes that only 10 percent of all publicly traded companies have proved themselves able to sustain for more than a few years a growth trajectory that creates above-average shareholder returns.3 Repeated studies indicate that somewhat less than 10 percent of major innovations in large corporations—the ones on which the future is said to depend—are successful.4 The multibillion-dollar activity of mergers and acquisitions enjoys a success rate, in terms of adding value to the acquiring company, of around 15 percent.5 • • To grasp the signiﬁcance of these ﬁgures, you need only ask yourself, If your airline’s ﬂights only arrived 10–15 percent of the time, would you be getting on that plane? If your surgical operation was only successful 10–15 percent of the time, would you be undergoing that operation? And it’s not as though these rather staggeringly low rates of success have always been accomplished in an admirable manner, with names such as Enron, Arthur Andersen, and WorldCom ﬁlling the news. Managers thus have little reason to be complacent about their current mode of getting results.6 Nor was it obvious that the storytellers I met had any reason to be happier with their overall situation. Many of them were entangled in one way or another with the world of organizations. Often storytelling was for them a part-time avocation, as it didn’t generate sufﬁcient revenue to xiv Introduction make ends meet: they had day jobs to ﬁll the gap. And those few who were involved full time in storytelling found themselves willy-nilly in the world of organizations and commerce. But storytellers tended to keep the two worlds separate. They were just as unhappy as anyone else with the command-andcontrol management practices widespread in organizations, but the storytellers had no idea how to change them. They tended to live bifurcated lives. Left-brained workers by day. Right-brained storytellers by night. It wasn’t just that they couldn’t see a way to bring their right-brained storytelling capacity into the workplace. It wasn’t clear that they even wanted to. Just as the left-brained managers were reluctant to contaminate the rationalism of management with impassioned narratives, so storytellers were reluctant to risk dirtying the world of storytelling by introducing it into the world of commerce. Better to keep storytelling pure and noble than risk such a fate. As I moved uneasily between these two different worlds, it was apparent to me that each of them had something to offer to the other. When I saw how storytellers could hold an audience totally engrossed in what was being said, I could see that this capacity is what analytic managers often lack when they present brilliant plans that leave audiences confused and dazed. I also saw how slighted storytellers felt when the world of organizations didn’t take them seriously. By clarifying the theory and practice of storytelling, I felt that I could show that storytelling had much to offer to organizations. By taking a clear-sighted view of what storytelling could and couldn’t do, I believed I could help it assume its rightful place as an equal partner with abstractions and analysis as a key leadership discipline. Storytellers would get back the respect they want and deserve. Leaders would be able to connect with their audiences as human beings. And of course, what both worlds of storytelling and organization have been overlooking is that storytelling already plays a huge role in the world of organizations and business and politics today. One has only to glance at the business section of the newspaper to see that organizations are chockablock with stories that have massive ﬁnancial impact.7 Stories are the only way to make sense of a rapidly morphing global economy with multiple wrenching transitions under way simultaneously. xv Introduction The choice for leaders in business and organizations is not whether to be involved in storytelling—they can hardly do otherwise—but rather whether to use storytelling unwittingly and clumsily—or intelligently and skillfully. Management fads may come and go, but storytelling is a phenomenon that is fundamental to all nations, societies, and cultures, and has been so since time immemorial. And it’s not just leaders in business and politics who can beneﬁt from a greater capability to use story—anyone who has a new idea and wants to change the world will do better by telling stories than by any amount of logical exhortation. It is equally applicable to those outside organizations, such as schoolteachers, health workers, therapists, family members, professional colleagues—in short, anyone who wants to change the minds of those around them. The Role of Storytelling How large an idea is storytelling? In one sense, telli..."

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