In this unorthodox case study (no company, no chief executive, no burning strategic issue to be solved…), professor Jennifer Aaker of Stanford GSB explains the importance of stories in business, and more importantly explains how to spin a good yarn.

Old wisdom has it that in companies, it is the salespeople who have the best stories – not just the best jokes, but also those rib-tickling stories about mishaps on the road, showing up late for client meetings, and other snafu’s that punctuate their lives of cold calls and golf tournaments. For professor Jennifer Aaker of the Stanford GSB, what these salespeople have understood is the importance of storytelling.

“Our appetite for stories is a reflection of the basic human need to understand patterns of life – not merely as an intellectual exercise, but as a personal, emotional experience,” she writes in this refreshingly unorthodox case, worthy of a moviemaking school.

Why should managers even worry about telling stories? For professor Aaker, it is because stories build emotional bonds that can be far stronger than the rational bonds that managers normally prefer. Most managers will rely on reasoning and facts to make their point, yet a storytelling approach can help strengthen their pitch – without needing to jettison the facts.

So how can you become a good storyteller?

For professor Aaker, and her co-author Victoria Chang, there are certain fixed elements – stepping stones if you will – that can allow anyone to construct a lively and bonding narrative. See the chart for a synopsis.

 

The characters
The first thing that a story needs is characters. At least one. It is these protagonists to whom the audience relates, and they make the story a parable for lessons to be learned. “Deep within the protagonist, the audience recognizes a certain shared humanity,” claims Robert McKee, the author of Story, and one of the key quoted sources in the case.

The characters of the story make it alive through their desires. The protagonists need to want something. These yearnings are important for the audience, since it will disconnect from a gutless protagonist with no desire. What interest for a watered-down Citizen Kane content to publish a local rag, or a timid Lucas Skywalker refusing to confront Darth Vader?

 

The plot
The next stepping-stone is the story’s plot (see box). One of the key elements of the plot is to identify the ‘major dramatic question’. What is the story about? The story’s purpose is also its central organizing force. For fiction, the audience is riveted by the suspense of knowing what the answer will turn out to be. A good plot must know which course to follow; in the navigation of its course, which elements should be kept and which thrown aside.

 

Obstacles to overcome
Another critical element for the plot is an obstacle for the protagonist to overcome. Prince Charming cannot just wake up one morning and seduce the princess. First there is the dragon to slay, then perhaps a few wizards to outwit. Perhaps even a vicious rabbit on the way to the castle of aaaaaargh!

Setting
Perhaps not of paramount importance, the setting is nonetheless important for the story. For it is the setting that places the reader in the proper mental environment. How frightening would Count Dracula be without his Transylvanian castle redoubt and lightning bolts? How heart-wrenching would Titanic have been without the five-star comfort before the iceberg collision?

The setting includes not just the location, but also the period, the duration and can even encompass the level of conflict (e.g. personal struggle à la David Helfgott in Shine or institutional conflict à la Erin Brockovich).

 

Point of view
Who is telling the story? Is it the very personal first-hand account of ‘I’? Or is it the more challenging ‘you’, which calls in the audience. Or is it the ‘he/she’ third person that provides more distance and different angles? Does the story also call upon a narrator to provide a third consciousness?

Although professor Aaker is not suggesting that managers take a script-writing seminar for the one-page memos that punctuate the daily grind, she does hint that managers should devote some of their time to the drama in work. Our lives may not be a ten-year odyssey replete with cyclops and sirens, but with some embellishment they can seem thus.

 

How to tell a story (A)
Prof Jennifer Aaker (Stanford GSB) and Victoria Chang
Stanford Graduate School of Business
Reference M-323 (A)

 

Not all stories are created equal

The arc of the story shows how a story is shaped in terms of climaxes and rests. A story’s arc is crucial in understanding how to capture your audience

According to Robert McKee, the author of Story, a book that has become a reference in the movie world, the classical design characterizes the plots of countless blockbuster movies and bestselling books. The classical design for a plot involves “an active protagonist who struggles against primarily external forces of antagonism to pursue his or her desire…” explains McKee.

In more down-to-earth terms, a story’s arc can be defined by the story’s beginning, middle and end.

The beginning of the story needs to be fast and quick. Cut to the chase so that the audience is captive and give it the interesting stuff before it’s too late. The beginning needs to set the stage by introducing the characters, providing backgorund information and establishing the dramatic question.

The middle of the story allows for further development of the characeters and especially the action, but serves one important function: the middle shows the hurdles that our heroes must overcome. Whether it be financing for the new venture or failures in technological advances, the middle bit builds up the tension. Will our hero succeed in the end?

The end of the story may be the shortest part, but it is often also the sweetest. Tears may flow. Cheers may roar. Smiles may break out. “Movies are about their last twenty minutes,” says oin one revered Hollywood axiom. Dulcis in fondo would have said the Romans. Thou shalt save the best for last.

 

Professor Profiles

Name Jennifer Aaker

  1. What area of research are you currently working on?
  2. a) Corporate strategies (acquisition, differentiation, alliance). My new article “Corporate Strategies in the World Media Industry” is forthcoming in the Russian Management Journal.
  3. b) Technology transfer and modernization of economy. My two articles “International Outsourcing Foreign Experience and Russia’s Perspectives” and “On perspectives of Russian Biotechnology Industry Development” were published in the Journal of Economic Policy, no.1 and no. 5, relatively.

 A management book you think highly of (written by someone else). Why?
“Joint Ventures” by Paul W. Beamish, Information Age Publishing, 2008. It focused on practicing managers, and covers alliances and JVs professionally.

A very recent business or management title you read, and its significant lessons.
“Innovation and R&D in the Global Environment: The Case of Group Thales”, by Ashok Som, published in the International Journal of Business Innovation and Research, 3(3), 2009.

This article covers R&D management in a diversified conglomerate and the risks of technology transfer in emerging countries. In his article Ashok confirms the necessity of balancing opportunities and threats.

 What was your most interesting consulting assignment? Why?
In 2005 the Ivey Business School published my case written with professor Paul Beamish. In this case we analyzed the sector of Russian business education and particularly the Academy of National Economy (ANE) under the Government of Russian Federation. Now Russian business education is growing fast. I am cooperating with the ANE as well as the Graduate School of Management at St. Petersburg State University.