Why Storytelling is Important to Business

As long as there have been humans, there have been stories. Stories, told orally, were one of the first forms of human communication, and, in large part, were used to learn from one another’s experiences. Today, they are still at the center of all that we do and say. However, when we think of stories, we often go to a place of extremes – of thrilling fiction books, childhood fables, or the over-exaggerating friend we all have. We don’t always think about the ability that stories have to provide meaning, create context, and instill a sense of purpose in all that we do.

We are surrounded by stories. In fact, over half of human conversation comes in the form of stories. As humans, we are more receptive to stories than we are to data or hard facts. This is because stories help us relate, they allow us to empathize, and they allow our brains to process information in a form that is more digestible and memorable.

This past week, my team and I had the pleasure of teaching storytelling to a group of MBA students at Imperial College London. While storytelling may not be the first topic that comes to mind when thinking of business school curriculum, understanding the importance of storytelling can give companies a competitive advantage, and individuals a leg up.  

Stories sell.

Storytelling is an integral part of design thinking and business – branding is storytelling, design tells a story, the applications of storytelling to business are endless. The fact that stories sell is evidenced by the success of TedX, Humans of New York, and Kickstarter. So why is it that storytelling often goes unappreciated as a valuable business tool?

Most annual reports begin with text. In part, this is because it allows businesses to write their own story, instead of waiting for others to interpret their numbers. It is also why many seasoned investors skip over the text; to not be influenced by the business. As humans, we are inclined to place stories around facts, and businesses need to understand that by not being purposeful about the stories they tell, they are allowing others to write the script.

Stories provide relevance.

Perhaps most founders pitching their startups on Kickstarter understand the importance of stories and personal anecdotes, as most of them introduce themselves and their team long before they explain their product or service. Whether this is intentional or not, it is grounded in the fact that stories connect us. In the context of Kickstarter, stories put a person the forefront of each startup and allow us to place our trust and support in a human rather than a company. The desire for personal connection is one of the factors that drives the success of Kickstarter.

Perhaps one of the greatest and most renowned business storytellers was Steve Jobs. Jobs was highly acclaimed for his keynote speeches, and for making Apple products relatable to consumers. Legend has it that Jobs told the team who designed the iPod that it had to fit in the pocket of his jeans; he was already thinking about the coolness factor of pulling it out of his back pocket when he unveiled it on stage. This small anecdote shows of how stories can begin to move beyond sales and can play a role in both design and ideation.

Stories set context.

It may seem counterintuitive to start with a story, but, because stories help us relate and are memorable, they can ground business strategy and be a powerful tool in any stage of the innovation process. Storytelling can be a valuable tool to help understand the context or the challenge that a business is facing. This is industry and category agnostic, and can be applied to most challenges.

For example, a company that is looking to continue to innovate in the category of the connected home may start their innovation process with their latest technological advancements, or the USPs of their products. But by bringing in a story in the form of personas, the design may become more human-focused and consider how the product fits into someone’s life and, subsequently, into their home. These personas may push the company’s thinking and lead to a better product than one that was founded on technology alone.

Stories create purpose and drive action.

Strategy can also be elevated with the use of story. This is because stories resonate with people more than data, and because taking action is an emotional response to a variety of stimuli. Strategies, and the stories attached to them, must be clear and concise. Imagine a CEO that, while presenting to his board, explains that moving forward the company strategy and mandate will be to “improve customer experience.” While noble, and something that most companies are and should be doing, simply stating that improving customer experience is the way forward may not create as much buy-in as sharing a story and creating an emotional response as to why an improved CX will lead the company into the future. Stories can be used as an impetus to action.

Stories also create purpose. This can be exemplified by a study conducted at Wharton School of Business in 2007. Participants collecting donations in a call center were split into two groups. One group was told how the money they earned would improve their own lives, while the other was told stories about how their earnings would help the lives of others. Because of the sense of purpose these stories instilled in participants, the members of the second group earned more than double the average of the participants in the first.

While stories may not be the best approach in all business situations, they can usually be a powerful business tool and one that should not be overlooked. They allow people to connect with both companies and each other in more meaningful ways.

the author

Alexis Scobie

Alexis Scobie is an innovation strategist at Idea Couture.