You have to understand what numbers are before you can do algebra.  And you have to understand algebra before you can do calculus. It doesn’t mean when you are doing calculus that the numbers aren’t important.

Madelyn Blair, author of Riding The Current

In order to create people-centered organizations, organizations need people-centered processes. They need systems and processes that will keep the organization focused on systematically achieving people-relevant outcomes rather than merely the production of outputs. They need systems and processes that will continually push the organization routinely delight and enchant their customers and signal when this is not happening. They need systems and processes that will push the organization to automatically draw on the full talents and creativity of the people who are doing the work. The latest generation of leadership storytelling–Leadership Storytelling 3.0–accomplishes exactly that.

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Leadership storytelling: the beginning

In October 2000, I asked to meet with the director of the Smithsonian Associates in Washington DC and proposed to her a symposium on leadership storytelling. She looked at me as though the idea was absurd and asked: “Why on earth would we want to do that?” When I told her my story, she changed her mind and the symposium took place in April 2001. It marked the beginning of a great flowering leadership storytelling in the ensuing decade all around the world.

During the decade, the leadership storytelling scene was transformed. As a result of the efforts of myself and many others, it is now commonplace to find leadership storytelling discussed and promoted in even the most conservative business journals. Most leadership textbooks now have a section on storytelling. Business schools now often include segments on storytelling in their courses on leadership. Major corporations have taken it up as a central leadership theme. In broad terms, the intellectual battle to have storytelling accepted in the world of work has been won. What was once seen as absurd is now seen as obvious. In this month—March 2011—when a book on storytelling was number one in all the top lists of bestsellers,[i] it is not too much to declare that leadership storytelling has arrived into the mainstream.

Yet not everyone is aware that the storytelling has emerged in three interconnected generations.

Leadership Storytelling 1.0

In the beginning, it was simple. The story begins: “Once upon a time…” or equivalent, and we are off, traveling on the wings of the narrative imagination. It’s a story, without a care in the world or any thought as to where it might lead or what consequences might follow. Stories naturally enable us to get inside the mind of another human being. Stories expand our understanding of other people. Stories give us vicarious experience that we can obtain in no other way. These stories “in the wild” are inherently stimulating and naturally life-enhancing.

All these advantages come from the unthinking use of story. To the extent that thinking about it occurs at all, it is usually at the level of, “Gee, that’s amazing!” The subject matter of these stories might be soaring tales of accomplishment or utter disaster, or it might be mundane gossip about who did what to whom. In organizations, the stories are told in corridors, in cafeterias, around water coolers, in meeting rooms and board rooms—in fact, anywhere where human beings get together. Storytelling 1.0 involves no more than simply telling, retelling and celebrating stories as they are occur in a state of nature.

Leadership Storytelling 2.0

In the second generation of storytelling, narrative consciousness awakens, and there is an explicit recognition of the potential effects of storytelling as well as the beginnings of an explicit understanding of mechanics of narrative. My book, The Springboard (Butterworth Heinemann, 2000) tells the story of my own narrative awakening.

In this world, there is explicit awareness that one is “telling a story” as well as the development of expertise as to what sort of story is effective in which context, and how the story could be told in a way that would maximize that effect. The recognition of different narrative patterns flows from the insight that different kinds of stories are needed for different purposes.  One kind of story—a springboard story—can spring an audience to a new level of understanding and action; it enables leaders to communicate authentically and inspire enduring enthusiasm for worthy causes. Other narrative patterns relate to communicating who you are, communicating the brand, getting people to work together, transmitting knowledge or moving people into the future. Understanding the characteristics of the stories that would perform each of these functions is a key to effective leadership storytelling. These different narrative patterns are elaborated in various places, including my book, The Leader’s Guide to Storytelling (Jossey-Bass, 2nd Edition, March 2011).

The risks of Storytelling 2.0

Yet as Storytelling 2.0 has made its way into mainstream of organizations and leadership thinking, several concerns have emerged.

As always with the acquisition of new knowledge, there is sadness at the loss of innocence. Some people feel nostalgia for the simpler more naïve world of stories of the “once upon a time…” variety and lament the risk of losing the magic of an ancient and sacred art of storytelling.

A more serious concern is that Storytelling 2.0 can degenerate into manipulation, and be used to trick and deceive people. This risk doesn’t materialize where the storytellers are in an interactive relationship with their listeners and recognize that the only important stories are not the stories that the storytellers tell, but rather the stories that the listeners generate for themselves: these latter stories are the stories that will be acted upon.

An even more worrying concern is that the full potential of leadership storytelling is still not being realized. The hope that storytelling would enable leaders to transform dehumanizing workplaces, and turn them into creative and energizing experiences that uplift the human spirit has been only partially fulfilled. It is true that many battles have been won. Many organizational storytelling programs have been launched. Executive support for storytelling initiatives has often been forthcoming in major corporations. And yet the overall war is still not won. Something always seems to happen. There is a change in command among the senior executives. Or a cost-cutting drive. Or a reorganization. The result? The promising storytelling initiative is defunded, set aside, marginalized or simply crushed. As a result, attention is now turning to what is necessary to go beyond winning battles to create workplaces worthy of the human spirit and to win the war itself.

Leadership storytelling 2.0 is not enough

This has led to the development of new kinds of storytelling that embed human centered values in the very drivers of an organization so that the organization systematically and automatically focuses on human-centered outcomes.

One reason why this is possible now is the appearance of studies that show that even on its own terms, traditional management is failing. Thus the Shift Index has revealed that the rate of return on assets of US firms is only one quarter of what it was in 1965. The life expectancy of firms in the Fortune 500 is down from around 75 years half a century ago to less than 15 years. Only one in five workers is fully engaged in his or her work. We also know that these attitudes, values and practices have infected our education system which no longer provides an education that fits our children for the future. Our health system, which, quite apart from the recent health reform, is heading the country towards bankruptcy. These disastrous results create necessity of finding a better way of managing organizations.

But persuading people to manage the organization differently is not enough. We need to change the very processes and systems that drive the organization. If those processes and systems remain focused on the manipulation of things—outputs, demand, human resources—those processes and systems will undermine deliberate attempts to make the organization more people-focused. If the traditional systems and processes are left in place, the organization will automatically revert to its default mode—manipulating outputs, demand, human resources—even though the leaders and managers sincerely want to operate differently and contribute strenuous efforts to make it happen.

Leadership storytelling 3.0

In order to create people-centered organizations, organizations need people-centered processes. They need systems and processes that will keep the organization focused on systematically achieving people-relevant outcomes rather than merely the production of outputs. They need systems and processes that will continually push the organization routinely delight and enchant their customers and signal when this is not happening. They need systems and processes that will push the organization to automatically draw on the full talents and creativity of the people who are doing the work.

In effect, they need systems and processes that don’t need continual adjustment to achieve people-oriented results. They need systems and processes that automatically push the organization to achieve people-oriented results.

The good news is that methodologies have indeed been developed that do exactly that.

As the methodologies are people-oriented, it should not come as a surprise that they are also story-based:

  • At the organizational level, the very goal of the firm is to generate positive outcomes for customers. This is best measured by a story: the Net Promoter Score is a methodology that enables the organization to measure whether it is delighting the customer by inviting the customer to imagine a story: “Would you recommend this product or service to a colleague or friend?”
  • At the level of the team, work is planned in the form of user stories—a special kind of story devised to formulate the goals of teams in terms of customer outcomes.
  • The user stories that are developed are then sized and prioritized using other methodologies called “story points” and “planning poker” to measure how much work is involved in making any of the user stories “come true.” In such work places, people routinely speak of “implementing stories.”
  • Value stream mapping is a tool that creates a story of the organization seen from the customer’s point of view, and helps identify any delays in delivering value to the customer. It enables the organization to manage the forgotten competitive weapon: time.
  • These story-based measures enable the firm to go further and—for the first time—calculate the productivity of a firm in terms of human outcomes rather than merely the production of things.

In this third generation of leadership storytelling, with the shift in vocabulary to NPS, user stories, story points, planning poker and team velocity, we are a long way away from the innocent world of “Once upon a time…” Are these methodologies still really genuine storytelling?

Using Madelyn Blair’s a wonderful metaphor from mathematics, Storytelling 1.0 is the equivalent of simple arithmetic. Storytelling 2.0 is the equivalent of algebra. Storytelling 3.0 is calculus. Each one provides the foundation for the other. We have to understand Storytelling 1.0 before we can do Storytelling 2.0. We have to master Storytelling 2.0 before we can cope with Storytelling 3.0. Each one builds on the other. New skills give us new capabilities.

What now becomes possible is to create organizations with systems and processes that are systematically life-enhancing.

To achieve this, we need to recognize that storytelling is more than just a tool. It is a different way of thinking, speaking and acting in the workplace. We must use it to convey meaning that reveals our deepest values, our very core, as human beings. It involves creating a state of mind that starts with a change of heart.

To learn more

My book, The Leader’s Guide to Radical Management offers a comprehensive account of the principle and practices of Storytelling 3.0.

If you would like to get together with others who are intent on using Storytelling 3.0 to master what’s involved in creating a workplace that systematically puts people at the center, please join me, Rod Collins (author of Leadership in a Wiki World, Seth Kahan (author of Getting Change Right) and others for two days on May 12-13 in Washington DC. Cool, innovative and serious fun.

Don’t delay: the early bird discount ends March 31. More details here.

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