Storytelling nowadays
Lately, storytelling has been everything. And everywhere. We tend to justify pretty much everything around (or because of) it.
Take the example of Masayoshi Son (I read this recently on his biography “Gambling Man”): he sometimes, especially in the central part of his career, acts in a certain way (which by the way means buy and selling companies for billions of dollars, and taking - and repaying - loans of the same amounts and sizes) because he has to keep the storytelling with its board, investors, and shareholders.
Where does this poised behavior come from? Why do we tend to justify choices, that ultimately impact (sometimes negatively) the company that takes them?
This is what I thought of.
We tend to simplify
Human brains are wired to save energy, looking for shortcuts everywhere. This is sometimes (perhaps most of the times!) a good thing, because it means efficiency; however, in many cases, it leads us to rely onto synthetic metrics (see my article on why EBIDTA lies to you) or on simplified storytelling, ultimately neglecting the complexities behind any “story”.
Keeping the example of “Masa”, storytelling simplifies the complexity behind not only the reason for some choices, but also, and most importantly, the outcomes (and the implementation!) of those.
Losing face
Widely and culturally entrenched in the Chinese culture, sometimes we keep storytelling just to continue the story we have been telling from the start. This is not only textbook for “destroying shareholder value”, but it is also one of the best (and fastest) ways for the storytelling to unravel in a (sometimes negative) spiral. And believe me, whichever the spiral it won’t be a customer-obsessed one, because here we are way far off from being close to the customer.
The role of the investor (and/or the Board)
Investors and Board members often base decisions on perception, future promises, and visions rather than pure performance metrics. Sometimes it needs to be like that, because they have perhaps invested (or are sitting) in different companies, and they need synthetic metrics. However, sometimes it may be a risk.
Managers aware of this behaviour may take advantage of it by creating (and sustaining!) attractive stories rather than focusing exclusively on fundamental execution.
An example of, sometimes, this short-termism view, is the excess importance and focus on the earning reports, especially if they the most frequent ones. Both executives and investors tend to rely too much on storytelling and focus to much on the latest results: this has the positive effect of continuously refreshing trust and buying executives additional time to fulfill promises, but on the other hand completely neglects the company’s vision and execution’s abilities.
If you think, continuing to storytell is like technical debt: every hype cycle (of storytelling) you miss compounds over time. And the more you go on, the more difficult it will be to come back.
Solution/Conclusion
Usually blog articles end with a Call To Action, a solution, or a conclusion. Perhaps because today I am lazy, but I don’t have one so far. I however commit to update this blog article whenever I will find one. Or maybe you can propose me one!
