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How can leadership understand their business to better design the company’s narrative?

“How we interpret the events in our lives, our perspective, is the framework for our forthcoming response—whether there will even be one or whether we’ll just lie there and take it. Where the head goes, the body follows. Perception precedes action. Right action follows the right perspective.” 
― Ryan HolidayThe Obstacle Is the Way: The Timeless Art of Turning Adversity to Advantage

A narrative is a series of events, fact or fiction. In my observations, it is one of the most powerful motivators. If someone sees themselves inside a narrative it can empower them to rise to a challenge, be a villain, or join a cult. Narratives are powerful and dangerous.

Just as the Ryan Holiday quote reads, it is not the events (or narrative) that shape our action; it is our perspective and how we interpret the events that become the framework for our response. If we are developing our perspective, which intern can set a powerful narrative, wouldn’t it be important that we got the events right? Wouldn’t it be important that we understood all available information to combine with our experience to reach an understanding?

 

All organizations have a narrative, whether intentional or accidental.

All organizations have a narrative. Some leadership teams are careful and thoughtful about what their narrative is. Sometimes it is based on reality; sometimes it is based on gut feel (i.e. empirical vs. anecdotal). Even when management fails to provide a narrative, one develops on its own.

Have you ever worked for a casual organization where every time an insurance agent showed up in a suit rumors cascaded through the shop floor about how the company had been sold? Alternatively, what about the closely held business where the owner was rumored to keep two sets of books so that the employees did not know about the fortunes the family was amassing? Moreover, we have all worked for a company that was in continuous shutdown mode but that day never actually came.

What I am saying is that if you do not develop the narrative, then one will develop for you based on other people’s perspectives.

 

Leaders are bad at narratives too.

I have observed two types of leaders who are a victim of their terrible perspectives. It is two ends of the spectrum. The leader who lives in a false (inaccurate) sense of scarcity, thus missing opportunities because they did not have their head up. Moreover, there’s the leader who lives in denial; they’ve got their head in the sand instead of noticing and addressing real issues within their businesses. There could be more, but these two seem standard.

Both perspectives impede upon the health of business, and potentially more dangerous, don’t portray an accurate picture of their business to their employees. For all sailors on a ship to tie the right lines, they all must understand at a minimum an accurate picture of what direction the ship is going and at what speed. They may not need to know the destination, but the captain of the ship cannot be too scared to come out to the deck, nor can they be in denial of what ship they are on.

It is a challenge to the integrity of the business and the leaders when the narrative is not accurate and truthful. It means leaders must know the truth and be willing to communicate the truth.

How can leaders adjust their perspective to set better narratives?

Communicating at all levels of business is required to establish a proper narrative. However, how do we know we are setting the right narrative? There is a simple answer; use data.

Company data can take many shapes and forms. It may be financial performance over time, sales conversion during a given period, or market facing data about how many customers are in your niche. Using data, leadership can easily assess the situation and devise a plan of action. It helps them with setting short term and long term goals for the company.

Try this. Try putting together a simple dashboard for your leadership meetings to review 6-9 data points in a trending chart (a trend is just a time series of three or more points). It is critical that you are tracking the right information for the right team. If your audience does not care about the data, there’s a good chance you have been tracking the wrong stuff. TWP often consults with clients helping them decide what to track and how to track it, so I have stepped into several bad data situations.

Once you have the data, you need to interpret it so that it creates a basis for your perspective. Questions like “Why are sales down in the central region?” or “Why didn’t we produce more from assembly line A since it has a faster run speed?” will naturally develop. Answering these questions will change your perspective.

As your perspective changes, you should communicate to the organization in a meaningful way. I suggest using visuals to understand the data inside the leadership team, then also using another, a perhaps simpler set of visuals to communicate to a broader audience with a potentially lower numeracy level. It is not just important to know the data and adjust your perspective. It is also important to use that data to set the narrative inside the business so that all participants understand their role in your company’s story.

For more information on using data to set perspective and design the company narrative, reach out via LinkedIn or tweet me @james_h_j.

James H Johnson CPA.CITP, MBA, CGMA