The Bottom Line (Exec Summary)
It’s always best to take a joined-up approach, where story and strategy evolve together. Ultimately your story should be a key part of your overall strategy, it’s your strategy’s North Star, and developing both together is an effective way to achieve business success.
Introduction
Have you ever wondered which comes first in business: the story or the strategy? It’s a bit like the chicken and the egg question (which I tried on my daughter when she was four, to hilarious results, but that’s for another time). This question puzzles many business leaders, especially in the complex world of B2B. In this article, we’ll dig into the question and explore how aligning your company’s story and strategy can lead to success.
The Power of Alignment
Imagine you’re building a house. You need a solid foundation (that’s your strategy) and a beautiful design (that’s your story). If these two don’t match up, you might end up with a wobbly house that doesn’t look quite right or a beautiful house that falls over. The same goes for businesses. When your story and strategy are in sync, magic happens.
Several studies, papers and articles highlight how companies that put narrative and story at the centre of their business, within their strategy, are more likely to exceed their business goals. This shows just how important it is to get your story and strategy working together.
Aligning Story to Strategy: Leading With Facts and Logic
Most businesses (as far as we can tell) start with strategy. They figure out what they want to achieve and how they’re going to do it, often it’s not even a strategy but a plan of activity (a difference well cover in another post). They ground everything in data, rational processes and analysis. Then, they crack the whip with the Marketing team to craft a story that fits the plan.
Sometimes, this works, let’s look at how:
- Clear Direction: When you start with strategy, you have a roadmap. Your story then becomes the way you highlight the exciting journey for others.
- Measurable Goals: Strategies often come with numbers and targets. Your story can bring these dry figures to life, making them more engaging for your audience.
- Resource Allocation: A clear strategy helps you decide where to put your time and money. Your story can explain these choices in a way that makes sense to everyone.
Real-world example: IBM’s transformation
In the 1990s, IBM was struggling. They decided on a new strategy: to become a service-led technology company. Their story then became all about “solutions for a small planet”. This alignment helped IBM turn things around, growing their services revenue from $15 billion in 1992 to $35 billion in 2001.
Aligning Strategy to Story: Leading With Vision and Narrative
Sometimes, a powerful story can shape a company’s entire strategy. This approach is becoming more popular, especially in today’s world where customers crave authentic connections (especially in B2B which has been somewhat left behind). Ultimately, the future cannot be measured and often, it takes companies with an ambitious North Star and a clear narrative to take the steps to transform industries.
Here’s why it can be effective:
- Inspiring Vision: A truly compelling story that can motivate employees and attract customers. It gives everyone a reason to believe in the company.
- Cultural Alignment: When strategy follows story, it’s often more in tune with the company’s values and culture and can be powerful if we believe the common used phrase, ‘culture eats strategy for breakfast’.
- Differentiation: In crowded markets, a unique story can set a company apart from its competitors.
- More meaningful goals: The actions you employ in your strategy are based on achieving meaningful goals that matter to customers and your team. It’s more than just a profit objective, more than numbers.
Real-world example: Patagonia’s environmental mission
Patagonia, the outdoor clothing company, built its strategy around its founding story of environmental stewardship. This led to innovative practices like using recycled materials and offering free repairs. As a result, Patagonia’s revenue grew from $20 million in 1985 to over $1 billion in 2017, all while staying true to its story.
Often we call these organisations, ‘purpose led’ not in the sense they have a social or environmental purpose like Patagonia, though that’s great if they do. Your purpose can be help companies grow through better propositions (Stratinn’s purpose) or to put humans on Mars (SpaceX).
Recommended Reading: https://stratinn.co.uk/Innsights/what-is-a-proposition-statement
The Symbiotic Approach: When Story and Strategy Develop Together
At Stratinn, we believe that the most effective approach is a mix of both. Story and strategy can (and should) be identified, grow and change together.
This symbiotic approach allows for:
- Flexibility: As market conditions change, both your story and strategy can adapt together.
- Authenticity: When story and strategy evolve in tandem, the result feels more genuine and cohesive.
- Innovation: The interplay between story and strategy can spark new ideas and approaches.
Real-world example: HubSpot’s evolution
HubSpot was started with a clear vision from the beginning, to help companies grow better. Not to create a SEO tool, not to create a CRM or even an email marketing platform. They had a clear vision to deliver an ‘All in one Marketing & Sales Growth Platform’ highly ambitious, but it was this clear vision that provided the business with the impetus for growth and the strategic plan was developed with this end goal in mind.
The Ripple Effect of Alignment
When you get your story and strategy working together, it’s like dropping a pebble in a pond. The effects ripple out, touching every part of your business. Let’s explore some of these:
- Employee Engagement
When your story and strategy align, it’s easier for your team to understand and get behind your company’s mission. According to a Gallup study, companies with highly engaged workforces outperform their peers by 147% in earnings per share and you engage both staff and customers companies experience a 240% boost in performance-related business outcomes. Imagine what your business could do if everyone was rowing in the same direction! - Customer Loyalty
Customers can spot inconsistencies a mile away. When your story matches your actions (which are guided by your strategy), customers are more likely to trust and stick with you. Research by Bain & Company shows that increasing customer retention rates by just 5% can increase profits by 25% to 95%. - Brand Strength
A consistent story and strategy build a strong brand. Strong brands, on average, see 3 times the revenue growth of their competitors, according to research by Kantar Millward Brown. - Innovation
When your story and strategy are in sync, it often leads to more innovative thinking. You’re not just solving problems; you’re fulfilling your company’s purpose in new and exciting ways. - Decision making: More than feeling great for employees and customers, a truly aligned strategy and story helps you understand the deeper ‘why’ behind the strategy meaning that when the plan does, and it always does, get tested, you know what to do.
- Efficiencies: Efficiencies can be found, with strong alignment, in Product (clarity on what products you should be creating and why), Marketing (clarity on the campaigns and messaging you should be using) and Sales (clarity on who to talk to and what messages to deliver) among others.
Recommended Reading: https://stratinn.co.uk/Innsights/the-language-of-proposition-its-in-everything-you-do
Common Pitfalls in Aligning Story and Strategy
Even with the best intentions, companies sometimes stumble when trying to align their story and strategy. Here are some common pitfalls to watch out for:
- The “All Talk, No Action” Trap
This happens when a company tells a great story but doesn’t back it up with their strategy. For example, a tech company might talk about being “customer-obsessed”, but if their strategy doesn’t include investing in customer service, the story falls flat. - The “Hidden Gem” Syndrome
Sometimes, companies have a brilliant strategy but fail to tell a compelling story about it. This is like having a treasure chest but keeping it buried. Your strategy needs a story to bring it to life and get people excited about it. - The “Flavour of the Month” Mistake
This occurs when companies frequently change their story or strategy without giving either time to take root. It’s like constantly replanting a tree – it never gets a chance to grow strong roots. - The “Lost in Translation” Error
This happens when the story and strategy align at the top levels of the company, but get muddled as they’re communicated down the ranks. It’s crucial that everyone, from the CEO to the newest hire, understands how the story and strategy work together.
An Approach for Alignment from the Start
Aligning your story and strategy doesn’t have to be a shot in the dark. Here are some essential steps to help:
- Understand Your Customers and Their Needs
Start by diving deep into your customers’ world. What are their functional needs – the practical problems they need to solve? More importantly, what are their emotional needs – how do they want to feel? How will these evolve in the future? Use tools like customer interviews, surveys, and empathy mapping to get a full picture. For example, a B2B software company might discover that beyond needing efficient data management as AI becomes more important (functional need), their customers want to feel confident and in control when presenting to their own bosses (emotional need).
- Understand Your Competitors
Look beyond what your competitors do and how they do it. Dig into how they make their customers (and your potential customers) feel. Use competitive analysis tools, but also consider mystery shopping or talking to customers who’ve used competitor products. You might find that while a competitor offers similar features to you, they make customers feel overwhelmed rather than empowered.
- Understand Your Business Today
Take a hard, honest look at your current situation. What are your strengths? Maybe you have a fantastic customer service team or cutting-edge technology. And what about your weaknesses? Perhaps your product range is limited or your brand awareness is low. Asking your customers and market experts can be helpful here as they’ll be more honest than your employees. Remember, understanding where you are is crucial for planning where you’re going.
- Envision Your Future Proposition
This is where your story starts to take shape. Based on what you’ve learned about your customers, competitors, and your own business, what overarching proposition will best serve your customers in the future? This isn’t just about what you’ll offer, but why it matters. For instance, “We’ll provide AI-powered data analytics to help mid-size companies make decisions with the confidence of a Fortune 500 firm.”
- Map the Gap
Next, identify the steps needed to move from your current state to delivering your new proposition effectively. This might involve developing new products, upskilling your team, or changing your company culture. Use tools like gap analysis or capability mapping to visualise this journey.
- Build the Roadmap
Finally, this is where your ‘classic’ strategy comes in – it’s the practical plan to bring your story to life. Break down the journey into manageable phases, set clear milestones, and assign responsibilities.
At the end of this process, you’ll have a compelling story AND a clear strategy and plan, all coherent and working together.
Remember, your story is what you’ll be doing and why – it’s the exciting vision of your future that will inspire your team and attract customers. Your strategy is the decisions you made in choosing the vision for your story and your strategic plan is the detailed roadmap that will get you there.
By using this overall approach, you can ensure that your story and strategy aren’t just aligned, but are two sides of the same coin, working together to drive your business forward.
For example, if your story is about supporting environmentally conscious product manufacturers by becoming the go-to partner for sustainable solutions in the next five years, your strategy entailed deciding on the customer, the market and the needs you’ll look to serve. Your plan may then include milestones like developing eco-friendly products, partnering with green technology providers, and launching an education campaign about sustainable manufacturing practices.
Following these steps and keeping your story and strategy tightly linked, you’ll create a powerful, coherent vision for your business that’s both inspiring and achievable.
The Role of Leadership in Alignment
As a leader, you play a crucial role in aligning your company’s story and strategy. Here’s how you can lead the charge:
- Be the Storyteller-in-Chief
As the leader, you need to be the main champion of your company’s story. Tell it often, and make sure it reflects your strategic priorities. - Walk the Talk
Ensure your actions and decisions align with both your story and your strategy. Remember, actions speak louder than words. Keep an eye out for disconnects between what your team(s) are doing and the overall story and strategy. - Foster Open Communication
Create an environment where team members feel comfortable pointing out misalignments between story and strategy. This can help you catch and fix issues early. - Celebrate Alignment Wins
When you see great examples of your story and strategy working together, shine a spotlight on them. This reinforces the importance of alignment throughout your organisation.
The Future of Story and Strategy
As we look to the future, the line between story and strategy is likely to blur even further. With the rise of purpose-driven businesses and increasing demand for corporate transparency, companies will need to ensure their story and strategy are more tightly integrated than ever.
Emerging technologies like artificial intelligence may provide new tools for aligning and measuring the impact of story and strategy. Imagine an AI that could analyse your company’s communications and flag potential misalignments with your strategic goals!
Check out one of our other articles here, where we used AI to assess our own comms.
However, even as technology advances, the fundamental principle will remain the same: your company’s story and strategy must work together to create a coherent, compelling narrative for your business to help direct customers and employees.
Conclusion: The Power of Alignment
In the end, whether the chicken or the egg comes first doesn’t matter as much as ensuring both are healthy and working together. The same is true for your business story and strategy.
By aligning these crucial elements, you can create a powerful narrative that not only tells the world who you are and what you do, but also guides your company towards its goals. Remember, in the complex world of B2B, clarity and consistency are key. When your story and strategy sing in harmony, that’s when your business can truly soar.
Recommended Reading: https://stratinn.co.uk/Innsights/why-b2b-is-more-emotional-than-b2c
FAQ Section
Q1: How often should I review the alignment of my company’s story and strategy?
A1: It’s a good idea to review this alignment at least annually, or whenever there’s a significant change in your business or market conditions.
Q2: Can a company have multiple stories for different audiences?
A2: Yes, but they should all stem from the same core story and align with the overall strategy. Think of them as different chapters of the same book.
Q3: What if my company’s current story and strategy don’t align?
A3: This is a common issue. Start by identifying the misalignments, then gradually adjust either your story or strategy (or both) to bring them into harmony.
Q4: How can I measure the effectiveness of my story-strategy alignment?
A4: Look at metrics like employee engagement, customer retention, brand perception, and overall business performance. Improvements in these areas often indicate good alignment.
Q5: Is it ever okay for story and strategy to be misaligned?
A5: While short-term misalignments can happen during periods of change, prolonged misalignment can lead to confusion and lack of trust among stakeholders. It’s best to work towards alignment as quickly as possible.
