Why Do Most Corporate Strategies Fail? How Storytelling Can Fix Your Company Culture

Does Your Team Know the ‘Hero’s Journey’? What Steve Young Can Teach CEOs About Authentic Leadership

Stop letting outdated culture eat your strategy for breakfast. Read The Secret of Culture Change to learn why compelling, authentic storytelling is the only way to align your team’s values with your business goals—featuring real-world lessons from NFL legend Steve Young.

Don’t let your new strategy die in a memo—read the full summary below to learn how to craft the one story that will actually change how your employees think and act.

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Without the right strategies, most organizations will fail. But even the best strategies cannot succeed if your company’s culture doesn’t support them. Authors Jay B. Barney, Manoel Amorim, and Carlos Júlio explain that culture change hinges on story-building. Leaders aiming for a strategic culture shift must craft and share compelling stories with their employees – stories rooted in the new norms and values they wish to establish. Employees will then develop and share their own culture-change tales. The authors teach you how to create and communicate these stories in ways that jump start change.

Take-Aways

• To change outmoded strategies, change your company’s culture.
• Leaders must create and share culture-change stories.
• Culture outweighs strategy.
• Culture-change stories should speak to your employees’ heads and hearts.
• When NFL great Steve Young’s company purchased a firm, he told a culture-change story called, “He Threw a Chair at Me!”
• Leaders’ stories have a cascading effect; employees’ stories must percolate through the ranks.
• Tread lightly when instituting cultural change.

Summary

To change outmoded strategies, change your company’s culture.

Are your business strategies outdated? Would you like to change them, and do you know how? Begin by aligning them with your culture. Organizations whose strategies and cultures align outperform firms with misaligned strategies and cultures.

“Culture mediates the relationship between your strategies and your organization’s performance. Your strategies are the bundle of activities your organization engages in to gain competitive advantages.”

If your company culture is a mismatch with your business strategy, you can change your strategy, change your culture, or do nothing and watch your competitors succeed. Because strategies are, by their nature, action-oriented plans – let’s do this and let’s not do that – you can change them fairly easily. But allowing culture to dictate strategy is problematic. If, for instance, you abandon a strategy that your research indicates is best for product differentiation because it doesn’t align with your company culture, you are risking your bottom line. Changing your culture – which is far less concrete than your strategy – is more difficult but, ultimately, it’s a far better approach.

Leaders must create and share culture-change stories.

The stories that lead to cultural transformation talk about a company’s “myths,” norms, and values. Leaders create and share these stories with employees who then share them with one another and with relevant stakeholders.

“Culture change is fundamentally about breaking well-entrenched patterns of thinking, acting, and responding, and replacing them with new patterns.”

Where do the stories come from? Leaders write them, and then they live them out. Developing story-building and story-telling skills is like learning any other skill.

Culture outweighs s trategy.

Culture precedes and enables strategy. As famed management expert Peter Drucker once said, “Culture eats strategy for breakfast.”

However, a new or revised strategy requires a new or revised culture. Your tired old corporate stories won’t spur cultural transformation. To create a cultural shift, leaders must develop new culture-change stories that break with tradition and point their firm and employees in the right direction.

These stories require specific attributes. They must come from the storyteller’s personal experiences – in other words, they must be authentic. The stories should reflect your “deeply held values and beliefs” and those of the organization’s stakeholders. Your stories must be entertaining and dramatic, and they should feature heroes and villains. You are the hero, always.

“[Theater] involves top leaders in a firm doing something very different from their normal day-to-day activities, doing this in a very public setting, and doing it in a way that reinforces some aspect of a cultural change that [the]…leader is trying to implement.”

Culture-change stories must feature the leaders who tell them and often involve accounts of these leaders acting in unexpected ways – for instance, one change story about a dramatic customer-service revamp began with the CEO engaging in the un-CEO-like act of sitting on the phone and waiting for more than two hours to speak with one of his company’s customer service representatives.

Leaders may present their stories in novel ways. For example, they might act them out in a skit format while wearing costumes. The goal of these presentations is to help employees understand the necessary shift in their corporate culture and to see that the leaders themselves are fully committed to the new way of doing things. When leaders build and share their stories correctly, employees will see these stories as examples they can use to create their own culture-change tales.

Culture-change stories should speak to your employees’ heads and hearts.

Cultural change is often more of a radical shift than a gradual evolution. It may involve disrupting or discarding familiar routines and instituting new ways of thinking and acting. This sort of significant change can make employees fearful. To achieve their desired effect, change stories must address this fear’s emotional and rational sides.

The cultural change you want to institute may strongly appeal to your listeners’ emotions, but their rational side may rebel and wonder whether the change is good or bad news for them. Efforts to elicit emotional responses may prove incompatible with attempts at provoking rational thinking; the two do not always mesh.

“Yes, our new culture will help us sell more products. But the resulting revenue growth will also help our people realize their full leadership potential.”

To escape this problem, develop cultural-change stories that emphasize “rational profit-maximizing thought” while still offering a personal angle. For example, culture-change stories might stress that the company’s profitability depends on the proposed cultural change and that increased revenues will help provide better benefits, such as enhanced professional development opportunities.

Your story must unequivocally show which old ways are no longer functional and must be forgotten. While your story may call for a total shift from your previous culture, it should open the way forward to the organization’s future, which will include new patterns and routines.

When NFL great Steve Young’s company purchased another firm, he told a culture-change story called, “He Threw a Chair at Me!”

Leaders must either live out the norms and values of the culture they hope to nurture within their companies or leave. Staying in charge when you cannot authentically embody the new culture is bad for your business and will create frustration.

Steve Young is a National Football League (NFL) Hall of Famer, a former San Francisco 49ers superstar, and a previous Most Valuable Player. Today, Young is the co-founding chairman of Huntsman Gay Global Capital, an equity investment company. Young’s culture-change story exemplifies the importance of a leader embodying his company’s values and serves as the sort of tale that helps transform a culture. Note that Young is the star and hero of his story.

Young discusses an executive he calls “Michael.” Young’s equity firm bought Michael’s company. They discussed Michael’s role in the firm after the buyout. Young contended that the business could have only one leader: the new CEO that Huntsman Gay Global Capital hired to lead it. Michael agreed to stay out of the CEO’s way and take on the board chair role. But Michael kept showing up at the office and interfering with the new CEO’s day-to-day running of the company. The CEO complained to Young.

“Your stories appeal to your employees’ heads when they draw a direct causal line between the new culture you are trying to create and your firm’s financial performance. They appeal to your employees’ hearts when they see how a new culture will benefit the people associated with your company.”

Young asked the new CEO to be patient with Michael and asked Michael to give the new CEO some room. Despite Young’s pleas, Michael would not stop interfering. Finally, the new CEO told Young that he would leave if Young didn’t get rid of Michael.

When Young told Michael he had to go, Michael got angry and threw a chair at Young. To lighten the mood, Young asked Michael if that was the worst he could do. Michael cracked a smile, and the mood lightened immediately. Then, Young asked Micheal if he could suggest a solution.

After talking a bit more, Micheal had an epiphany. He told Young that he couldn’t take a hands-off approach with the company: He either had to be in charge or he had to leave. Nothing else would suffice. After clarifying the feelings behind his actions, Michael resigned. Over the years, Michael stayed in touch with Young and later told him that leaving the company was the best decision he ever made.

Any employee who heard this story would likely agree that neither Michael nor the firm would have benefited if Michael had chosen to stay. By emphasizing Young’s patience and good humor and framing Michael’s resignation in positive terms, the story positions the company’s new leaders and culture as the best choices for taking it to future success.

Leaders’ stories have a cascading effect; employees’ stories must percolate through the ranks.

The most effective way to bring about cultural change is through the proliferation and sharing of culture-change stories. This is called the “story cascade.”

“Stories that are not shared and discussed among your employees have no power to influence these people to build their own stories.”

Leaders can’t create and implement a new culture alone; they need the backing of employees who make and swap their own stories. For this progression to work, leaders must create and share their stories first and be ready to revisit any procedures or rules that don’t fit the new culture.

The more compelling a leader’s culture-change story is, the more employees will want to share it and build on it to create their own stories. One of co-author Manoel Amorim’s change stories shows how this process works. When he was CEO of the Brazilian telecom company Telesp, Amorim discovered first-hand that the company’s latest offering – a home internet service dubbed Speedy – was rife with technical problems. Rather than ignoring the issues, he asked a call center employee to tell the company’s out-of-touch executives what resources the customer-facing team needed to manage the firm’s service issues.

“Culture-changing stories… come from your real-life experiences in your organization. Every time you become aware of a time when your organization does not deliver on its strategy, there is a possible culture-changing story there.”

Amorin suspended product sales until the company could resolve these issues and invited more call center employees to share their thoughts on the proposed solutions.

This story highlights frontline employees, giving them a pivotal role in Telesp’s transformation from an unattractive, hierarchal culture to a friendly, customer-centric culture. Amorin’s story meets the culture-change story criteria: It is authentic. It stars Manoel as the CEO and hero. And it depicts a marked shift in the company’s values and ways of operating.

Amorim fashioned his story to appeal to his employees’ heads and hearts. Because it was theatrical and compelling, his tale circulated throughout Telesp in a single day as employees repeated it company-wide. Eventually, Brazil’s most popular business magazine featured the story, which further promoted cultural change within Telesp.

Tread lightly when instituting cultural change.

Creating engaging culture-change stories is challenging. To begin, start and maintain a “business experiences” journal. Routinely review it to see if any events you listed have culture-change story possibilities. When you find one with potential, expand, adapt, and share it.

Most business leaders expect to be in complete control of their organizations – including cultural change efforts. A firm’s leader has to stay on top of operational, financial, regulatory, promotional, and personnel matters, but a leader who tries to manage all facets of culture change will likely fail. Such micromanaging inevitably backfires.

Leaders can find it difficult to understand all aspects of their company’s culture. Those who try to guide every culture-change moment will come across to their employees as heavy-handed and controlling. Culture change has to be a shared effort. A proposed culture shift that remains the sole province of a single organizational leader will almost surely fail. Employees will assume the proposed culture change is nothing more than their leader’s ego trip and ignore it. Staff members can and will quickly detect and reject leaders who try to manipulate or deceive them.

“Since every business leader in an organization can engage in activities that have strategic implications, it follows that every business leader needs to be concerned with how the culture in the part of the organization where they lead aligns with the strategies they are pursuing.”

The status quo of any organization always seems sacrosanct. Any change directly challenges that sense. Employees often feel that change may threaten their livelihoods or positions. Don’t expect people to embrace the cultural change you want immediately or think you can make it happen easily.

If you have a major cultural shift in mind, don’t delay starting your story cascade. Timing matters. Share the right stories at all levels before you make major changes.

About the Authors

Jay B. Barney is a professor in strategic management at the University of Utah. Manoel Amorim is a co-founder and partner in K2A Partners in Brazil. Leadership expert Carlos Júlio is a visiting professor at four MBA Schools in Brazil.