The Best Advisors Understand the Power of a “Good Story”
Rembrandt’s masterpiece “The Night Watch”
I visited the “Night Watch” last week. It’s a true masterpiece. I particularly love the stories behind it: Its history and what it currently means for the city of Amsterdam.
We all enjoy a “good story”. From novels to movies and manga to opera, the universal appeal of stories is obvious.
And yet, whenever I talk to business advisors or other professionals about the importance of “mastering the art of storytelling”, I am often met with scepticism.
And when I suggest that storytelling might be the most important skill to master in a digital age, the reaction is usually laughter.
“Today, if you want to succeed as an entrepreneur, you also have to be a good storyteller” — Richard Branson
The fact that many self-made billionaires emphasize the importance of storytelling in their success is dismissed.
“Storytelling had nothing to do with why they were successful. It was talent, ambition or just dumb luck.
. . . I am not here to be the next J.K. Rowling.”
Storytelling is often associated with an earlier “analogue” age: an era of paintings, paper books or tales around the campfire.
But I genuinely believe that the current digital age — with the dominance of social media — provides a perfect environment for a renewed emphasis on storytelling.
I will come back to why I believe storytelling matters in a moment, but this reaction intrigues me.
Why do so many people laugh at the suggestion that storytelling matters in digital age?
Part of the reason is that storytelling just seems so old-fashioned. A skill-set from a different age.
But there is also a lot of scepticism about storytelling today. It is regarded as just another “marketing tool” or a way to create “fake news”. Stories are increasingly associated with manipulation and exploitation.
In this context, the suggestion that storytelling might be at the center of what business and business advisors need to do in order to add value can seem a little “left field”. Hence the laughter.
But this reaction is short-sighted and need to be revisited. I predict that “storytelling” will become a necessary skill for advisors across the board, such as lawyers, accountants and all business consultants.
Here is why.
The Power of Stories
In general, there are three reasons why everyone must study, understand and practice the “art of storytelling”.
#1 — The Emergence of Platforms & Ecosystems
I’ve written before that, in order to survive in a fast-changing digital world, companies have to either become the owner of a platform or be “integrated” or “collaborate” with one.
One of the best examples is the dominance of Amazon and the urgency for “older companies” to partner with the platform.
Amazon Favours Brands Like Burberry, Levi's with 'Pay to Play' Strategy_SAN FRANCISCO, United States - Amazon.com Inc. is giving special privileges to companies that sell their wares directly…_www.businessoffashion.com
In the world of platforms, well-established brands and attractive products aren’t sufficient anymore to lure and attract consumers and employees.
Companies must have a clear mission. They must offer a purpose, be tech-driven and embrace a customer-centric vision.
Storytelling is one of the best strategies to achieve this. A good story is inspirational, builds relationships, invites input (creates a dialogue), and gives “heart and soul” to a company and its platform.
This sounds all very straightforward, but what is difficult for business advisors is to advise their clients to be “personal”, “vulnerable” and “willing to openly address the hard issues”. All too often, this is something that advisors in the “old world” would be unwilling to do.
#2 — Making Sense of Highly Complex Situations
The current world is complex (and appears to become more complicated every day). Business choices are ever-more difficult and made under conditions of huge uncertainty. Business has to comply with more and more rules and regulations.
Of course, this is music to the ears of advisors and consultants. In recent years, they have increasingly focused on compliance. But it appears that we have reached the limit.
Consulting has become a box-ticking exercise in which mandatory reports are overly-complex and boring. What’s worse is that they don’t tell a “real story” anymore.
A company’s annual reports in the 80s (left), 90s (middle) and 2000s (right)
Moreover, consumers, investors and other stakeholders in a company have become less interested in the facts regarding past performance and more interested in the narrative for the future growth of a business.
For instance, consumers want to understand companies better. They pay more attention to the environment and favour eco-friendly products.
Investors have similar demands. For them, the narrative behind a company’s long-term value creation has become a key indicator of future success. Capital efficiency and financial metrics are, of course, still important indicators, but they need to be supported by a narrative that focuses on sustainability and innovation.
This narrative is even more important for the many “platform” companies that still burn money every year. A convincing (possible, plausible and likely) story for future growth is crucial to attract investors, especially in the early stages.
#3 — The Automation of Compliance & Big Data
Mastering the art of storytelling is a new skill that provides many new opportunities for business advisors.
But for many advisors there may not even be a choice.
The compliance role will gradually be automated and overtaken by algorithms and data analytics.
In one of my conversations with accountants it became clear that an increasing number of them predict that their supervising and controlling role will gradually disappear, as digital technologies replace them. Computers and algorithms will continuously monitor the performance of a company in real-time and “annual reports” will soon disappear.
This will lead to more data. Business advisors will have to connect the dots and make sense of these data points. The value-added of the accountant will not be in the generation of data, but in the capacity to construct and then communicate stories about what the data “means”. This storytelling component will be forward looking and complement the historical data that is analyzed by machines.
And it will not stop here.
In smart, connected and sensor-based environments, more and more data will be available. Data that again needs to be analyzed and turned into a narrative that can be “sold” to the various stakeholders.
What’s Next?
I predict that 2018 will be a year of storytelling for advisors. In a business context, three things become really important:
- Advisors will have to master the art of storytelling. They need to help firms in constructing and communicating a personalized vision through a story.
- Advisors must be able to understand, analyze and judge other people’s stories. They must know a “good story” when they hear it.
- In an increasingly data-driven world, advisors must be able to use storytelling to make sense of the ever-more complex data that is being produced.
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