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The Connection Between Strategy and Story

For some time now I’ve been trying to understand how strategy and story intersect most effectively. There are some situations in which business strategy and brand story seem powerfully aligned (Apple, when it’s at its best). There are other situations in which the story seems to be pasted on, like a blanket of emotion wrapped around a cold, calculating campaign for world dominance (Microsoft, most of the time, and particularly when it was on the verge of world domination). And there are lots of companies and categories in which the strategy and the story simply seem to tug in opposite directions (e.g., is Facebook a benign tool for connecting people, supported by community-minded marketers, or an insidious device for accumulating personal information to sell to nefarious ad-men?).

I understand that strategy and story represent different metaphors. Strategy is the heart of the War metaphor, while the Story metaphor is about meaning and connection. (For a refresher on the Metaphors of Marketing, here’s an essay we posted in November.) Strategy is about making a series of specific choices in order to win in the marketplace. Story is about discovering and articulating the meaning of the enterprise in order to build a relationship between a brand and its audience–a relationship with consumers, of course, but also with employees, suppliers, shareholders, et. al.

One way to pull strategy and story apart is to ask, can you win in the marketplace without building a relationship between your brand and its audience? What would that look like? And how would you sustain a position as market leader in the absence of such a relationship? Cable companies seem to operate this way. Successful cable providers build a winning position in the markets where they choose to play even though their relationship with most of their customers is largely transactional. (And the relationships that do have any emotional content are overwhelmingly antagonistic!)

On the other hand, there are many brands for which the strategy is powered primarily by the story. The fashion category is full of them. And think about Starbucks. Coffee was broadly commoditized before Starbucks infused the category with story. The fact that Starbucks suffered in recent years when it wandered off its story, and that its founder had to work very hard to reinvigorate the story in order to rehabilitate the business, only demonstrates the extent to which the company’s winning strategy was powered by its story.

For most consumer-facing brands, the question of strategy versus story has a chicken-and-egg quality. You need a relationship with your audience in order to maintain a premium position in any marketplace. Absent such a relationship, you are running a commodity business. It is very hard to enter an existing category, let alone invent a new one, without persuading your audience that your offering is meaningful to them in some way. The audience wants to know why you are providing this product or service–and why they should care. A good answer to these questions gives your customer a reason to imagine that you might be better at what you do than someone who is just in it for the money.

That brings us back to the real connection between strategy and story: Strategy is a cascade of choices you make in order to win in the marketplace. Unless you choose to be the low-cost provider (low-cost, not low-price) your strategy has to be built on differentiation. And the essence of differentiation is that your brand means something to your customers. Story is about meaning. If all the strategic choices you make do not leave your customers convinced that your business has some meaning over and above enriching its owners, then whatever differentiation you try to establish will appear shallow and inauthentic. And if the differentiation you are trying to achieve is not persuasive to your audience, it will be very difficult to sustain a premium position over time.

There is a lot more to say about strategy and story, and if you find the subject interesting, we’ll continue the conversation in future essays. For the moment, I would really like to know if you think I’m on the right track. It would be helpful if you can suggest other examples of companies that try to win without articulating an authentic story–both companies that succeed and companies that get in trouble that way.

I’d love to hear from you.

P.S., I learned a lot about strategy from Playing to Win, by A.G. Lafley and Roger Martin. If you would like to check it out, here’s a link.

“Character gets to the heart of what good storytelling is all about. They’ve helped Wendy’s focus on what makes us unique, different and special and that’s helped us to get people’s attention, keep their interest and keep the business growing. We compete with much larger brands, but by being overt about how we want to attack those differences, we’ve been able to have a lot of tension and conflict in the story that we are telling. That allows us to keep the story fresh and to fuel it. The more we do that the more positive attention we get as a brand and the more the brand continues to grow, which, in turn, builds our confidence in our storytelling and keeps the courage level high.”

—Kurt  Kane, President U.S. & Chief Commercial Officer, Wendy’s Corporation

“I’ve been through Character’s story framework process four times in my career, and it has always added extraordinary value. It was a central piece of Walmart’s rebranding effort in 2006, as we sought a new articulation of our brand narrative and our purpose. It’s an equally powerful tool for us now, as Walmart defines its place in a rapidly transforming retail environment. And we are currently using it to do the same for Sam’s Club.”

—Tony Rogers, Chief Marketing Officer, Walmart

“Since articulating our story framework, Gallo has had its best year. We’re up 10% and we’re outpacing the category. From a creative standpoint it’s been great because we’re all in alignment. Now that we have the articulation of our story, our social media, our partnerships, our programs, our packaging—it all makes sense.”

—Stephanie Gallo, Chief Marketing Officer, E&J Gallo Winery