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Part 2 of 2: How Narrative Drives Outcomes for Apple, and Kodak

As we discussed in Part I, narrative is important because individually and collectively, all of our outcomes are the result of our narratives – narrative drives outcomes. If the leaders of an organization want to change outcomes, they have to begin by figuring out which narratives are getting in the way, and which narratives are actually serving them in regard to helping create intended outcomes. Good leaders know that the right narrative is critical to fostering the kind of organizational development that will positively impact the bottom line.

Consider this:

Most organizations that aren’t happy with their outcomes will focus on their processes or behaviors in order to determine what they might need to do differently in order to change their outcomes. They may have a pow-wow of some kind to brainstorm ideas. They may have a retreat. They may hire a niche consultant who specializes in their industry or in the particular kinds of problems they’ve identified. They may even decide they need to reorganize.

In each and every one of these cases, the organization is trying to solve their problems by focusing on the back-end of a sequence of chain reactions, rather than where the problem actually originates.  Additionally, unless the consultants they hire understand the role of narrative in organization development, they will be trying to change people’s behaviors, even while those very people are holding onto the same narratives that drove the thinking, decisions and behaviors that created the problematic outcomes in the first place.

Narrative Drives Outcomes by Joe Caruso

In business, it isn’t wise to willfully or naively ignore how the collective and individual mind functions. The mind can’t consider an idea in a vacuum. It must attach the idea or thought to something it is familiar with in order to create meaning. (This is called comparative thinking.) This attachment then creates other attachments and very quickly forms a narrative—a story that makes sense of the original idea and how it relates to other known thoughts, notions or ideas. While we are fully capable of doing things that don’t make sense to others, we must have our own reasons for why we think and behave certain ways. (Even if the reasons are made up and don’t stand up to reasonable examination.)

The first thing I do when a company calls me to help them with a goal or a problem is to uncover the thematic narratives of the organization. Every single time, it has proven to be critical to solving the core problem.  Twenty-five years and hundreds and hundreds of companies later, it still is—every single time. 

The Times of Our Lives (Example of Narrative Drives Outcomes)

Consider Kodak. Founded in 1889, they owned the photo development market. They even invented the digital camera.  What happened?  While many forensic business analysts examine the corporate corpse looking for clues, I contend that this is a company that couldn’t get past its legacy thinking. In other words, it couldn’t adapt its narrative about itself to the modern times, and because of this, nothing else they tried could turn around their demise. Stated simply, it couldn’t optimize its invention of the digital camera, if it meant that doing so would lessen the importance of film development—a foundational and fundamental part of their sense of identity.

It’s not like they lacked the resources to change. As late as 1976 Kodak had 90% of film and 85% of all camera sales in the US. It’s not like they weren’t trying to change. The company has had four different CEO’s in the last 19 years. On Thursday, January 19th, the same day that Apple announced that they will change the textbook industry forever, Kodak filed for Chapter 11 bankruptcy protection. If they can’t successfully emerge, the company that helped America make memories will soon become one. (The irony here is that Apple is a company that was able to successfully change their legacy narrative from, We will beat Microsoft, to We create technology so disruptive that it redefines entire industries.)

The fundamental reason why all the changes Kodak tried to make failed to save them comes down to one thing—a narrative that didn’t serve them. The fundamental way they saw themselves became fatally flawed, once they invented the digital camera. True to their narrative, they once again led the field in photographic invention with yet another breakthrough. Only this time, the nearly monopolistic masters of processing, couldn’t process how to embrace the new while they still clung to the old—an impossibility for any individual or organization. In the meantime, the marketplace spoke. Marketplaces don’t wait for companies to change.

We are the stories we tell ourselves we are. Sometimes our stories serve us. Sometimes they hurt us.  Sometimes they help us. Sometimes they get in our way. Great leaders need to understand the narrative of their organization and make sure it’s always edifying, because their markets will continue to shift and change at an increasingly rapid pace.  In this way it seems that today’s marketplace reflects the sensibilities of hundreds of millions of avid digital photographers—an analogy that was obviously lost on Kodak. Once the marketplace focuses in on what it wants, it doesn’t like to have to wait around to see how everything develops.

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