If you want to lead a company that outperforms the competition, start by clearly defining your company’s vision, mission, and values system. Once these are defined, you must then articulate the strategies that will allow you to accomplish that mission. There is nothing unusual about this formula for success.
In my experience, however, this is never enough to drive success/performance—and this is where you play a unique role. A broad set of stakeholders (employees, board, investors) must believe in the strategy. As the CEO, you create this belief by articulating a complete and compelling “strategy story.”
Let’s be clear: There is no one else who can create belief in the strategy. You are the only one who can tell your company’s current strategy story. In all likelihood, your predecessor had a story. This is not your story, and one of your first tasks as CEO (or CEO candidate) is to generate and tell your strategy story.
Based on research at the University of Oxford Saïd Business School (2015: 900 new CEOs at US publicly traded companies), new CEOs can positively move markets, quite often delivering a sustained stock-price increase, by delivering a strategy story to the investment community within their first one hundred days. While newly appointed “outsider” CEOs see bigger gains, fortunately almost all new CEOs will see some gain. The average gain in stock price was 5.3%. There are two important findings in the research. First, the investor community dislikes the uncertainty associated with a new CEO and presenting a new strategy creates confidence. Second, if the new CEO waits for longer than one hundred days, there is no impact on stock price. One other item of note is that only 40% of new CEOs present their strategy in the first two hundred days. If you are a new CEO or CEO candidate, this study should convince you of the need to make your strategy story a top priority.
The days of a company just publishing a strategy or simply sharing information are over. Today, the CEO is expected to be the face of the company. Strategy communication has taken on greater importance as CEOs are expected to be much more transparent, are the public face of the company, and are expected to use multiple new channels of communication to deliver strategic messages. High expectations and increased scrutiny make having a clear, well-structured strategic story critical if you are to be viewed as credible, trustworthy, and believable.
When you are armed with a great story about your company, you will be able to create belief by communicating a high degree of certainty about what your company does, which will bring clarity to decision-making and organizational planning. This story should serve as a map or blueprint which, when executed well, creates clarity about what you are going to do and determines what you are not going to do.
You’ll need to review your story annually, as it should evolve. I have yet to work with a CEO where the core story does not change every year to align with new market realities that translate into strategic imperatives. You will tell this story to a variety of audiences: employees, customers, shareholders, investors, and your board. You might vary some of the vignettes and characters in your story, depending on the audience, but the framework will not change. Also, a word of caution—if your industry/business is being disrupted, you will need to review your story every quarter.
Did I mention that you’ll have to hone your storytelling skills? This follows the development of your strategy story. To create belief, a good story should move the audience. It should inspire, motivate, and engage the listeners’ emotions. You can’t do that if you don’t engage your emotions, abandon rhetoric, and dispense with PowerPoint. Just remember that people are never inspired by reason alone. Combining ideas and emotion creates belief and buy-in. You’ll need to be a good storyteller. I write this knowing that you’ll have to tell a story at a time when people have lost significant confidence in business (Gartner 2016 surveys showed that only 18% of those surveyed had confidence in business).
When I work with a client, it can take us 3–4 hours to create the skeleton of a great story. In this article, I lay out the steps so you can do this for yourself. It is important to note that this document assumes you do ongoing strategy work and devote significant time to strategic planning.
PART 1: COMPILING THE ELEMENTS OF YOUR STRATEGY STORY
As any writer will tell you, there are a number of elements to a good story. These elements matter just as much when telling a compelling business strategy story as they do in fiction writing. These are the elements of your company’s story:
The first element in this list is (arguably) the most important. Your company’s purpose is ultimately much more than any solution you provide or product/service you sell. In his book Start With Why, Simon Sinek uses a model called The Golden Circle to help differentiate a company’s purpose from the other dimensions of a company’s business. The circle is made up of three concentric rings:
Sinek argues that few companies know or articulate their why. Yet this is often the most important: the essence of a company. As such, why is at the center of his model. So you’ll have to work to identify the why of your organization and make it easily understood. This will help you answer two key questions: “Why are you excited to lead this organization?” and “How is it making a difference in the world?”
Here’s an exercise. Sit down with your various strategy documents and PowerPoints. In reviewing them, can you identify which parts of the documentation refer to the what, how, and why of your company? Can you easily answer the question: “Why am I excited to lead this company?”
Honing In on What You Want to Do Differently
To develop the strategy part of your story, you need to begin with what you currently do. This part of the strategy story development process requires a holistic audit to clearly understand (and be able to articulate) the products, services, and solutions your company actually offers customers. You’ll probably already have this information in a PowerPoint. If not, you might need to define and document these offerings.
To capture the broader picture, consider asking some of the following questions:
You will use your responses to some or all of these questions as a foundation for answering strategy questions. Your strategy story should create absolute clarity about your go-to-market strategy. Responding to, and even struggling with, these questions will allow you to create the kind of clarity and alignment that is needed to drive successful execution.
As you clearly organize, categorize, and name the offerings you bring to market (sometimes they will neatly fit into a few categories), you’ll need to prioritize them for the future. There are five lenses you should apply, using these questions:
Once you have a clear picture of your offerings and have viewed them from the lens of these five questions, you will be able to define some strategic priorities, based on the sources of future company growth.
A word of caution here. I’m presenting this as a linear process when, in fact, there are often strategic imperatives that are unrelated to what you offer customers. For example, if you have issues with infrastructure (e.g. sales automation, supply-chain system), they will have to be addressed before you can launch new strategic initiatives.
Furthermore, growth is often accomplished through merger/acquisition/divestment activity. Quite often, this information is (or has to be) omitted from a strategy story. Signaling deal activity can trigger some legal and regulatory concerns. Such signaling can also create a lot of angst at your company; after all, the only human that seems to like change is a wet baby. Incorporating information about divestment is very tricky and almost always should be messaged outside of a strategy story.
Take the Time to Look Forward
No powerful strategy focuses only on current conditions. CEOs complain to me that the biggest obstacle to their focusing on strategic forces shaping their company is simply a shortage of time to conduct a strategy and industry review.
I recommend a “crystal ball” type exercise that you should do at the end of each calendar year. This can feed into your strategy story. Ask yourself: In three years,
When you look at the future of your company, it is inevitable that you’ll have to address company transformation. Your story must address the impact or effect of change on yourself, employees, customers, investors, and other stakeholders. This is where it’s important to understand the difference between incremental improvement and transformation. Small, steady steps forward into the future may be rewarding to the customer (and the bottom line), but they are not exciting, engaging, or enticing. Really transformative effort will be radical and unsettling. How you message such transformation will be key to getting the buy-in you need for that transformation to be successful. And, frankly, once people hear the words “transform” or “transformation,” they get antsy.
Let’s be perfectly clear: Initiatives that are cost-saving in nature are not transformative. Misusing the word “transformation” will potentially create a lot of cynicism.
As you consider your own company’s transformative capacity, ask these questions:
Knowing what needs to be transformed is the first step. Figuring out how to speak about it in an inspiring way comes later.
Crafting Strategic Statements
Out of your strategic story-building process, you should strive to create a handful of statements that together comprise your strategy. You don’t need a lot of them, but they must be memorable and should be inspirational.
Compiling These Pieces into a Strategy Story
At this point, you have all the components for a strategy story. Before you compile the components into a coherent story, let’s revisit some of the elements of a successful story. While every situation is different, your story will need to:
Your strategy story should have seven simple elements:
Some of the key questions to be answered include:
In crafting your story, there are also several mistakes you will need to avoid:
Personalizing for Impact
You already have a story about how you became the CEO. Whether you rose through the ranks or were called in to address specific issues, you have a story that is connected with the broader story of your company. In order to compel your various audiences with your strategic story, you need to own the passion yourself. To do this, ask questions like these:
Focusing on self-awareness is another avenue to personalizing your story. You can do this in at least two ways. First, consider these statements and ask, “How are they true (or not true) of me, and how might one or more of these be relevant for my speech?”
Second, include elements of your story in the Context and/or Proofs portions of the Message Modules of your stump speech.
Revisiting Your Strategic Story
Change is the only constant. This means that, like your company, your strategic story will need to change, most likely on an annual basis. Once a year, schedule a block of time to revisit this process and revise your strategic story to make it current, highlighting what you yourself have learned and the challenges and opportunities now facing your industry.
Be aware that external forces could also compel this revision process at critical points, such as in the aftermath of an unexpected presidential election result or governmental policy change. On the other hand, do not revise your strategic story every other month. Make changes to your stump speech only to incorporate updated data, a new anecdote, or your latest example of success. Don’t change the underlying story—which will, and should, bear repeating.
PART 2: CONNECTING YOUR STRATEGIC STORY AND YOUR COMMUNICATION STYLE
Once your stump speech is honed and you have owned your personal connection with your company’s strategic story, it’s time to begin delivery. However, there is a lot more to sharing the story than reading your stump speech from a podium. This is because well-established research suggests that, when you communicate:
Most CEOs spend the bulk of their time refining the message—which is important, but it misses 93% of the impact.
This is another reason why Simon Sinek starts with Why. If you are passionate about your company and your strategic story, this will be clear in your body language and vocal quality. Share your enthusiasm for why your company exists and how it will change the world, and that 93% will make itself more memorable.
It’s a good thing that your passion matters, because evidently the human brain is a sieve. In 1885, Hermann Ebbinghaus scientifically demonstrated that we all experience a decline in what we remember over time—and it starts right away. So when it comes to your stump speech, your audience will forget:
This means that you need to keep your stump speech:
You will also want to “jolt” your listeners every six or seven minutes. If you’re keeping your stump speech concise, this should mean you only need to do this a time or two. For example, people recall when you use vivid images, language, or posture. Other ways to be memorable include doing something different (use a prop or move to another part of the room), saying something in a different manner or tone of voice, or being (appropriately and thoughtfully) dramatic.
Being memorable is another reason that your own personal story is such an important element of your stump speech.
Learning from Expert CEO Communicators
To get a sense of how communication style makes a difference, watch the following CEO presentations:
Reinforcing the Story
Once your story is out, the CEO’s role becomes one of constant reinforcement. For the investor community, it is critical that you update the story and get ahead of any changes in that story. When Meg Whitman was appointed at Hewlett Packard Enterprises, she quickly reversed some of the strategic decisions of her predecessor, only to later reintroduce those decisions. Some of her strategic about-turns and reversals were communicated in a pragmatic narrative that emphasized a five-year turnaround plan. She is so good at telling the changing strategic story that she is sometimes called “the analyst whisperer.”
As P&G CEO Alan G. Lafley says, “Excruciating repetition and clarity are important—employees have so many things going on in the operation of their daily business that they don’t always take the time to stop, think, and internalize.” In the reinforcing of your strategy story, you need to keep two things in mind: first, everyone is rushing and they don’t have five minutes to read a long email; second, millennials and gen Z’ers will soon make up the majority of your workforce. There are many myths about how to communicate with millennials, but let’s be clear: They still have a strong preference for email and they have a strong desire for social interaction with senior leadership. You will have to seriously consider using video to continue to reinforce the story (or aspects of the story).
Highlighting successes and failures is another way to reinforce the story. One CEO invites twenty leaders from across the company to their annual executive retreat. The leaders present company success or failure stories that drive home messages about how employees really own strategic success. Another practice is to identify leaders who are promoted as a result of success with risky or high-profile projects. This is part of reinforcing that you have a company that is learning and embracing change.
Deepening Engagement with the Story
My approach to telling your strategic story emphasizes purpose and deep engagement with all stakeholders. This is especially true of more front-line or junior employees.
“If you think your company’s strategy conversations should only take place at the most senior level, you could unknowingly be crippling your company’s bottom line. Research shows that companies whose employees have a clear understanding of where the organization is headed and how their daily activities contribute to the success of the organization consistently outperform the competition.” —Chris Cancialosi, “The Strategic Narrative: A Better Way To Communicate Change,” Forbes.com
You’ll need to plan ways to get in front of employees. You should be willing to speak to the changes you yourself are making (you might even talk about your coach). Your team and employees will be much more open to change if you are modeling change yourself. Here are ways that you can become such a role model for supporting transformational storytelling across the organization:
Two years ago, I worked with a newly appointed Fortune 100 CEO whose predecessor only had an “OK” reputation with the investor community. The company also had a less-than-compelling story. While my client embarked upon a strategy to transform the company, he also needed to tell a new strategy story that the board embraced, that engaged employees, and that created credibility with investors. Getting that story right was crucial. He asked me to provide him with a framework for thinking about that story. We worked through the Strategy Story Workbook (in the Resource Library). It wasn’t rocket science—we used a lot of the material he already had in various PowerPoint presentations. He refined and tweaked his strategy story—and the result? A company on fire: He has 90% employee approval ratings, employee engagement has dramatically improved, and the company’s market cap has increased 50%—investors love the company.
Don’t underestimate the power of a great strategy story. I hope you find this article thought-provoking and the Workbook a helpful guide as you create your strategy story.