D Murali

Blend finance with stories

D. Murali | Updated on August 30, 2011 Published on August 24, 2011


Storytelling should be used extensively by corporations to explain their performance and make finance understood by the ordinary guy at the street corner.

Finance is generally perceived to be a dull subject. Do stories fit here? On the face of it, it would seem outrageous to mix storytelling and finance, observes Mr Sam Swaminathan, Storyteller, Center for Creative Thinking, US (http://bit.ly/F4TSamS), during a recent interaction with Business Line. View it a bit more closely, and things turn out to be quite different, he adds. What does Warren Buffett do, asks Sam? Berkshire Hathaway's annual general meeting is not called the Woodstock of Capitalism for nothing, he reminds. “Buffett and his partner, Charlie Munger, enthral audiences by narrating story after story about their businesses. The annual report is fun to read, because it educates while it entertains. Buffett's pithy epithets are filled with meaning and humour. The Oracle of Omaha is among the finest storytellers on this planet. And thanks to his close ties with Bill Gates, he has helped the latter become a better communicator.” My interaction with Sam continues over the e-mail.

Excerpts from the interview.

How can CFOs think of presenting the financial health of companies through stories? And who would the audience be?

CFOs could employ storytelling to produce imaginative annual reports that people actually want to read. So many reports are loaded with numbers upfront, with hardly anything inspiring or interesting about the company, its products, the industry, or their employees. If people are your greatest asset, why don't more CFOs help transform the annual reports into a tribute to those assets, in addition to a statement of financial assets? CFOs should run a programme like Mr Jack Stack used at SRC to disseminate finance-related knowledge to all their staff. Far too many companies hide their real numbers, instead of sharing them openly. That is the change CFOs can bring.

Can start-ups use storytelling for fund raising?

Storytelling is a boon for companies seeking funding. Remember, persuasion is the centrepiece of business activity. And storytelling is a potent weapon in the entrepreneur's arsenal. Storytelling is your best business partner when you want to make an impact. Bullet points last for a few minutes, stories last a lifetime.

Imagine you are the founder of a start-up drug company that is seeking funding. Instead of limiting the presentation to market size, business plan, org. chart and five-year projections, suppose the CEO also tells a story of her father who died of an illness that has no cure. She realises that if this drug had been there, he might have been saved. This has a greater chance of touching the heart of the venture capitalist. That is the power of storytelling. Let us not forget that the emotional brain has to say YES to give access to the rational brain. Show me a better tool than storytelling to achieve this.

Is there a risk that investors can be deluded by false stories? What is the antidote?

I can't think of an antidote for false stories. If people want to defraud others, they will succeed as often as they will fail. Storytelling neither increases nor decreases the risk of fraud. Investors are routinely deluded by false projections – the Indian real-estate industry is a basket case of false representations so much so that there one wonders what is ‘real' about real estate. You build your reputation by your actions. People like Murthy and JRD Tata are poster children for corporate cleanliness. If their stories are told well and often, ordinary investors will begin to recognise false stories from true stories.

You mentioned, during our meeting, about the use of storytelling to teach topics on finance. Can you elaborate how?

Storytelling should be used extensively by corporations to explain their performance. Listen to this: In 1983 along with 12 other managers, Mr Jack Stack scraped together $100,000 in cash, borrowed $8.9 million and transformed a failing division of International Harvester into one of the most successful and competitive companies in America. Under Stack's leadership and open-book management approach (later coined The Great Game of Business), this formerly failing company has now become SRC Holdings Corporation, a thriving company of 1,000 engaged employees in 17 business units across a variety of industries producing $300 million in annual sales. A company that has increased its stock price from 10 cents per share in 1983 to over $199 in 2010. SRC is the perfect example of the application of storytelling to make finance understood by the ordinary guy at the street corner.

How essential is it for companies to capture not only the wins but also the losses, through stories?

I haven't come across a company that doesn't want to innovate. If you don't innovate, you simply die, sooner than later. In order to innovate, you have to try. Einstein taught us that if we want to accomplish something never before accomplished, we must attempt something never before attempted. When you attempt something never before attempted, there is at least a 50 per cent chance that you will fail. So failure has to be in the DNA of an innovative company. Remember Apple's Lisa and Mobile Me. Both wins and losses need to be documented and shared.

Charles Schwab has an item titled ‘The one that got away' on the front page of its internal newsletter, which carries a story of a significant loss – it could be a lost client, a lost business opportunity, a failed systems application, whatever. This sends a strong signal to everyone that failure is not only tolerated, it is not taboo, but it is also spoken about, and lessons are learned. Truly great companies not only share wins and losses, they also reward both. Mr Andy Grove practiced this philosophy religiously at Intel. Great companies wear their successes and failures on their sleeves, as a badge of honour.


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Published on August 24, 2011
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