Everyone loves a good story. We enjoy listening to a good storyteller at work or when we’re socializing. We like a good story when we read a newspaper or a history book. We insist on a good story when we read a novel. We even like the stories we see and hear in good advertisements. So given the positive response everyone has to a good story, why don’t businesses use storytelling more often in their management strategies? It would seem to make sense that employees would respond positively, and would better remember what a manager says, if supervisors and executives used storytelling as a way to communicate. In fact, storytelling and leadership go hand in hand. And they work when discussing and negotiating with colleagues and executives at other companies, as well. Everyone is affected, and often persuaded, by a good story.

In fact, telling stories is critical to effective, meaningful management, says Stephen Denning, former program director of knowledge management at the World Bank in “Telling Tales,” published in 2004 in Harvard Business Review. Denning says that storytelling is one of the most effective tools that leaders can use. The key is to pick the stories carefully and to make sure they’re relevant to the situation.

Denning says that “although good business arguments are developed through the use of numbers, they are typically approved on the basis of a story—that is, a narrative that links a set of events in some kind of causal sequence. Storytelling can translate those dry and abstract numbers into compelling pictures of a leader’s goals.” Denning is talking about organizational storytelling, with a company or corporate audience. When using storytelling in a business environment, the goal is to use a story that will get the listeners thinking about their own company and how it can be more effective, a better place to work and better at what it does in the world. And yes, this is entirely possible. Stories have the power to convince people to take a course of action.

The reason that this is so is not very complicated. As Denning points out, analysis doesn’t offer “a way to the heart. And that’s where we must go if we are to motivate people not only to take action but to do so with energy and enthusiasm.” Effective storytelling inspires people where analysis of the facts does not.

However, there is nothing simple about effective storytelling. The world of work offers a myriad of situations of various kinds, and the kind of storytelling has to fit the kind of situation. In his article, Denning sets out seven objectives that storytelling could have (although he hopes to identify more), and delineates what kinds of story should be used for each. His seven objectives are: Sparking Action, Communicating Who You Are, Transmitting Values, Fostering Collaboration, Taming the Grapevine, Sharing Knowledge, and Leading People into the Future. When you tell a story in the business world, you are not involved in merely entertaining your audience. You have a purpose, a goal, in mind, and the story must be formed and told in such a way that you can achieve your goal. Leadership is about getting people to take action and to believe in that course of action; the story has to make sense in terms of what your people do and what you want them to do.

Denning says that there are two basic kinds of stories: stories that inspire people to action, and stories that impart knowledge and often caution. The first kinds are positive stories, catalysts to action, and the second are cautionary in tone because their purpose is to teach about facts, events, and consequences. Either way, stories are good tools for leadership, because they can tell audiences about the storyteller, and, if done well, inspire trust and loyalty. Stories can also impart the values of a corporation—they tell the “story” of the corporation’s vision of its place in the world and what sorts of actions it should take.

Telling stories about your corporation’s history—good or bad—can have a positive effect, just as stories about individuals outside your corporation, and about other corporations and organizations, can work to galvanize your employees and colleagues. As Denning points out, “Certainly, the ability to tell the right story at the right time is emerging as an essential leadership skill, one that can help managers cope with, and get business results in, the turbulent world of the twenty-first century.” Find your stories, decide how to tell them and to whom, and watch them work to align employees with your leadership vision.

What stories do you like to tell as a leader? Please share! When I am talking with groups about creativity and/or boundary issues, I like to tell them the following story. It’s short, sweet, and easy to interpret.

 “There is an interesting study that was done when a new elementary school was built. School started without the playground fence completed. The children would come outside to play and would really focus only on the playground equipment that was close to the school.   After the fence was complete, the children played in every single square inch of that playground. Sometimes people need to understand the parameters in order for them to be creative.”

Denning, Stephen. May 2004, Telling Tales, Harvard Business Review