Why Story Is Vital to Growing Your Business
Whether you’re looking for funding, investment, customers, collaborators, or new team members, you’re asking another person to make a behaviour change – from having their money in their pocket to giving you their money, or from working without you to working with you.
Entrepreneurs who understand more about the science of story’s effects on decision-making can use it as a powerful tool for growth.
In this blogpost you will learn about:
- How we’re all less logical than we like to think
- The power of the stories we tell ourselves
- Why effective storytelling is vital to business growth
1. We’re all less logical than we’d like to think
In his international best-seller Thinking, Fast and Slow, Nobel Prize-winning psychologist and economist Daniel Kahneman describes two different ways our brains form thoughts that affect our behaviours. He calls these ‘System 1’ and ‘System 2’.
System 1 is fast, automatic, emotional, unconscious, frequently used and relatively effortless.
System 2 is slow, logical, calculating, conscious, infrequently used and requires much more effort.
Kahneman’s research shows that because using System 2 is hard work:
- We use our intuitive System 1 as much as we can, even when making important decisions about money, business and work.
- Our System 2 limits the amount of work it has to do by quickly finding proof to back-up the conclusions System 1 has already reached.
As he says, “the intuitive System 1 is more influential than your experience tells you, and it is the secret author of many of the choices and judgements you make.”
In the majority of occasions, this works well as we often make good decisions based on intuition. We also have these hunches quickly; a key to survival in our evolutionary past when stopping to think more deeply about new information, for example, a movement in long grass, could have been the difference between life and death.
But, this means that expecting funders, investors, customers, collaborators and people you want to recruit to make logical decisions, based on the facts, isn’t the most effective strategy.
2. The power of the stories we tell ourselves
So where do these intuitive and instant System 1 decisions come from? When you encounter new information your brain automatically and unconsciously makes connections and associations. These connected ideas, from our personal histories, are stored as neural models in our brain – basically, we instantly seek alignment with the stories we already tell ourselves.
As Kahneman comments, “The confidence that individuals have in their beliefs depends mostly on the quality of the story they can tell about what they see, even if they see little.”
Since the ‘Cognitive Revolution’ around 70,000 years ago enabled Homo Sapiens to think and communicate in new ways; we’ve told stories not just to entertain but to perform important functions in our societies. Whether these stories were told to explain the physical world around us, to help us learn from the experience of others, or to enable larger and larger cooperation – they all have one thing in common, we like them because they make us feel in control.
Feeling in control is the ultimate mission of the storytelling brain.
As a result, our brains are extremely protective of the stories we already believe.
This biased defense of the stories we believe is incredibly strong, even in the face of logical evidence that goes against it. If we’re psychologically healthy, our brain makes us feel as if we’re the hero at the centre of the stories of our life. When researchers tested this with prisoners, they found they considered themselves to be above average on a range of pro-social characteristics, including kindness and morality. Even on law-abidingness they only felt they were about average.
3. Why effective storytelling is vital to business growth
When a person is deciding whether to fund, invest in, buy from, collaborate with, or join your company, their System 1 will have an intuitive hunch based on whether what they’re hearing agrees with the stories they believe in. If their more logical System 2 even bothers to engage,it’s likely to ‘take the easy way out’ by finding evidence to support System 1’s initial hunch.
When they encounter new information, System 1 instantly decides whether this agrees with the stories they believe in. They will intuitively like or dislike a person or an idea (using System 1), and our ‘lazy’ System 2 thinking is biased towards defending the stories System 1 believes in – finding evidence to support them and dismissing evidence that challenges them. Research by Drew Westen, Professor of Psychology and Psychiatry at Emory University has found that not only does this dismissal happen so quickly that we aren’t conscious of it; but that we also experience positive emotions afterwards that our one-sided hunt for evidence was good and thorough.
This biased belief in the stories we tell ourselves can have an impact on important business decisions. In Thinking, Fast and Slow, Daniel Kahneman tells us about a conversation he had with the chief investment officer of a large financial firm, who had just invested tens of millions of dollars in the stock of Ford Motor Company:
“When I asked how he had made that decision, he replied that he had recently attended an automobile show and had been impressed. ‘Boy, do they know how to make a car!’ was his explanation. He made it very clear that he trusted his gut feeling and was satisfied with himself and with his decision. I found it remarkable that he had not considered the one question that an economist would call relevant: Is Ford stock currently underpriced? Instead, he had listened to his intuition; he liked cars, he liked the company, and he liked the idea of owning its stock.”
The stories we’re hardwired to like by our social evolution are those that make us feel more in control of our lives than we actually are; factors beyond our control can have a major impact on our success, but this isn’t a story we like so we tend not to acknowledge it.
Whether you’re looking for funding, investment, customers, collaborators, or new team members, the most successful story you can tell is one that makes your audience feel in control of the journey of change you’re asking them to come on with you.
This means knowing who your story is for and understanding the stories they already tell themselves so that your story can align these beliefs and make them feel in control. If you don’t do this, any information that challenges their existing beliefs is likely to fall foul of the biases our ‘hero-making’ brains use to protect the stories we tell ourselves. In fact, this challenging information can cause them to dismiss everything you’ve said.
The good news is that everyone tells stories to influence and control other people. This isn’t a new skill for you to acquire – you do it every day. The challenge any entrepreneur faces is grabbing the attention of other people’s brains and getting them to think (and therefore behave) differently. Using story as strategy (insert link) can help you practice and improve the natural storytelling skills you already have.