Storytelling is a building block of human civilisation – so why do so many large businesses struggle with it? David Benady examines how corporate narrative has become more important than ever

The steady drip of incriminating emails and revelations emanating from some of the world’s most prestigious banks gives a new urgency to the term employee engagement. Goldman Sachs has experienced the pain of a departing employee alleging that the bank treats clients as “muppets”. The LIBOR scandal swirling around Barclays was fuelled by emails from employees apparently admitting they were fixing the rate. And an email from a Standard Chartered employee criticising “F***ing Americans” did the bank few favours with a New York regulator investigating it for sanctions-busting against Iran.

How do you get to the position where employees are so ready to disparage a business? And how do you take preventative measures?

The chasm between the high moral tone taken by these institutions in their communications and the language and alleged behaviour of staff suggests the banks’ narratives have failed to cascade down to employees. For businesses in the public eye, this matters. Every company needs a vision of why it is in business, what it aims to achieve and its objectives for the future. 

For the company’s narrative to be more than a tall tale with little relation to reality, it needs to be honest, relevant and meaningful. And crucially, the leadership must make sure that everyone in the business brings this story to life in their daily work. 

As John Godfrey, group communications director at insurer Legal & General, says: “If you set up a corporate culture, you have to encourage employees to behave in line with it. It’s not worth a hill of beans unless employees buy into it.” 

Godfrey says L&G has spent years refining its corporate narrative. An important step has involved challenging the some of the mind-boggling insurance industry jargon used in the organisation. 

“We took a view that if we were going to succeed in communicating with all the stakeholders, particularly customers and investors, we had to simplify the story and make it comprehensible to the generalist investor,” he says.

The business created an overriding narrative summed up in the line “everyday matters”. “We use that in various ways, it underpins everything we do with the brand,” says Godfrey. “It drives urgency and speed of response to customers whether they are pension funds or individuals investing £100 every month.” 

Part of the challenge has been to encourage all staff to acknowledge that they are serving customers, even if their jobs are not at first glance customer-facing. Godfrey adds: “Having a strong brand that everybody buys into internally probably gives you an advantage. People are more committed to performing well and to improvement.”

But many companies struggle to create a convincing, joined up narrative across their stakeholder communications. An analysis of the websites, social media and corporate literature of FTSE 100 companies by Radley Yeldar shows that over half of these listed companies fail to tell a consistent story about their business. 

Only 61% of the websites had video, a powerful medium for storytelling, and over a third of the 66 companies producing separate sustainability reports failed to a have a corporate story in the report. RY asked a panel of communications experts to analyse each company’s literature and judge whether the corporate story talked with personality, was memorable, left the reader wanting to know more and made some emotional connection to the reader. In all, RY found that only ten could be said to succeed in corporate storytelling.

Those doing it well include British American Tobacco, Diageo, BSkyB, Legal & General, GlaxoSmithKline, and G4S. Mike Oliver, Radley Yeldar’s head of brand, says: “Corporate branding starts with the vision for the company: Where does it want to go? What does it want to be famous for? It’s not about how you carry out your business, but what position do you want to occupy in people’s hearts and minds?” 

He says that 80% of FTSE 100 companies do not present their corporate brands with the same focus they would their customer brands. With the growing transparency forced on companies in the digital age, it has become vital to have a single, coherent story for all groups. “10 or 20 years ago companies talked to customers through service brands, and corporation communications used to talk to investors and employees, but it was hidden from the outside world. Now we are more transparent, our belief is that the story you tell customers should be coming from the same place as the story you tell other groups.”

He adds that ultimately, the responsibility for relating a convincing corporate story lies with the chief executive and senior management. They have to create differentiation with rivals so their business stands out from the crowd. “Look at how the story stacks up against the competition. It is pointless coming up with a story that is the same as everybody else’s, it has to be compelling, relevant and distinctive. These are the foundations of a great brand position,” he says.

One of the more successful corporate storytellers identified by RY is pharmaceutical business Shire. The research noted that pharma businesses and support services tend to be better at creating corporate narratives than many other sectors. Shire’s global vice-president for corporate communications Jessica Mann says this is because drug companies have to deal with patients suffering serious illnesses, so need a powerful narrative that will connect with them and inspire confidence in the treatments. 

“We are driven by the human aspects of dealing with people’s health and helping them to lead better lives. A critical part of making that happen is how we are as people,” she says. 

At Shire, this culture has been distilled into one word - brave. “In everything we do, we aspire to be as brave as the patients that we help. In telling that story, we concentrate on how the little stories of bravery that make up achievements on a daily, weekly, monthly or quarterly basis reflect that, and how we tell these stories to employees and other stakeholders.”

“It’s about communicating in the true sense of the word - not broadcasting, but engaging”

Internally, Shire uses a range of techniques to communicate the narrative to staff, including the company intranet and an internal social network, a regular blog from the chief executive, and online Q&A sessions open to Shire’s 5,000 employees in 28 countries. 

Externally, the narrative is expressed through the website, corporate reporting, annual reports and a twice yearly responsibility report, the core of which is embedded into the website. “Because we believe the responsibility story starts with our employees, that report is sent out to all staff. It helps them to know what is expected of them – part of our ‘brave’ culture is that we all do the right thing” says Mann. 

Another important aspect of storytelling is presenting the company’s future direction. Shire has tried to achieve this with its “2020 vision” showing how the company will lead the future of healthcare. 

Intriguingly, Mann says that the “brave” positioning is also something that applies to communications. “It is not about just talking to the employees, but communicating in the true sense of the word, listening and encouraging dialogue. That’s why the social platform and the blog are important. It is not broadcasting, it is engaging with staff so all our employees have a voice, not just the chief executive,” she says.

Some companies have worked with specialist brand consultancies to develop their narratives. IT infrastructure provider Logica, which is being acquired by Canadian business CGI, has employed the techniques of corporate storytelling to enthuse its staff. In 2008 it began working with consultancy The Storytellers to develop the use of stories in persuading staff to support a new strategic direction for the company. 

The strategy involved asking employees to think in clear, simple and engaging ways about the work they do. Global communications director Carolyn Esser says this has not been easy for the staff. “It is natural to tell stories in the pub or at a dinner party. But getting people who are intelligent white collar workers with tech-minded brains to explain their work like that is quite a challenge. They tell you about the huge complexity of the IT systems but we were trying to get to the nuts and bolts and why it is meaningful.”

The Logica story was created as a six-panel narrative covering why the company is in business, what needs to change, how that can be achieved, what is deliverable, what this means for the employees, and the business’s long term vision. 

“The first Logica story went down a storm because it was nothing the organisation had experienced before. It became the platform for the chief executive to go on a road show and socialise the story and get people thinking about what we need to do to achieve it,” says Esser. 

Ultimately, the strategy was driven by the chief executive Andy Green’s belief in using storytelling techniques to signal the new direction. He had already seen the methods successfully used in other businesses. “He gets this stuff, he could see the power of it and was very clear he wanted to signal a change of guard and find a mechanism that would really challenge people,” says Esser.

“A good story is credible and honest, not just a rosy picture of the glorious future”

One of the most important elements of a good corporate story is that is believable, says Alison Esse, a co-founder of The Storytellers. But making the story both believable and engaging is challenging. “A good story is one that is credible and honest, not just a rosy picture of the glorious future. People just won’t believe that, so an element of honesty and being open about where you haven’t got things right is essential.” 

But she warns against becoming too fixated on a single narrative. If everybody in an organization simply regurgitates the same story, it will lack credibility. So the story needs to be adapted by different parts of the organization. “That depends on the way tellers bring it to life and make it personal,” she says. 

While the idea of storytelling sounds like something strictly for children, neuroscientists and anthropologists believe that all humans are actually “hard-wired” to understand the world through a narrative structure - stories are part of what makes us human. 

In the digital age, the pressing need to create coherent corporate narratives is becoming more urgent. People are being swamped with information and need strong stories to try and put the data into context. 

But there are multiple narratives created about companies online, from the media, consumers, pressure groups, competitors and regulators. 

Ian Brownhill, co-founder of consultancy BergHind Joseph, says that getting the corporate story right is even more important in the data saturated world of digital. The story needs to offer bigger reasons for being in business than simply making money. “Corporate storytelling is about contextualizing the work you do and why you are in business beyond profit. We’ve seen a shift in corporate social responsibility from being something companies feel they have to do, to becoming part of their DNA.”

A technological development that is enhancing the effectiveness of story-telling is the massive rise online video. Brownhill says this helps stakeholders “see the whites of the company’s eyes.” Microsoft, for instance, makes great use of staff in its videos, giving a human face to a huge organization. 

Annual reports are another vital channel for relating corporate stories. Since 2005, when the Government abandoned the operating and financial review, there has been a huge rise in story telling in annual reports. Sallie Pilot, research and strategy director at corporate report writers Black Sun, says companies are being forced to think more about their long-term future and their ability to deliver sustainable value rather than just concentrating on past performance. 

The requirements for corporate reports are under review by regulators and there is likely to be a greater emphasis on constructing deeper narratives. But, says Pilot: “The problem is, the stories often aren’t very joined up, one part of the business takes one message and a different department says another. The reason a lot of companies don’t do it very well is because they are not joined up internally. They are worried about putting their heads above the parapet and saying something that might not come true.” 

Having a strong corporate narrative will not necessarily save a company its blushes if a scandal breaks. Indeed, if stories emerge that contradict the narrative, it could undermine a company’s reputation even further. 

But in a world where everybody can stand-up and pontificate on their own digital soap box, no company should allow someone else to tell their story for them. Companies just have to make sure that their stories come true.