Two Kinds of Companies
A company is either competition-driven or story-driven.
- Competitors + Winning
The competition-driven company is reactive to the marketplace and prioritises beating its competitors and racking up profits. It identifies with the capitalist ideal and is intent on keeping score. The people who lead competition-driven organisations seek to dominate the market and maximise shareholder value. They care about increasing market share, boosting the single bottom line and raising their status as ‘the leader’ in their category. Their goal is to win.
- Customers + Mattering
In contrast, the story-driven company is responsive to customers and prioritises having a clear sense of purpose and identity. It makes little reference to the competition and is intent on creating an impact. The people who work there derive a deep sense of meaning from their work because they know their company exists to do more than simply make a profit.
So Who’s the Winner?
Great companies have something in common: they don’t try to matter by winning. They win by mattering. The people who build them know what they stand for and act on those beliefs. What they think, say and do are always in alignment. Their story is consistent. Great companies rise to our expectations by being who they said they would be.
Meet The Story-Driven Framework
The Story-Driven Framework is designed to help you be less reactive and more visionary, less tactical and more strategic. It’s a tool you can use personally to guide your career decisions or within teams to inspire engagement and enable progress.
- BACKSTORY: Your journey to now.
- VALUES: Your guiding beliefs.
- PURPOSE: Your reason to exist.
- VISION: Your aspiration for the future.
- STRATEGY: The alignment of opportunities, plans and behaviour: how you will deliver on your purpose and work towards your aspiration, while staying true to your values.
Why backstory matters
Psychologists believe that the ability to distinguish yourself from others is essential to the development of successful social relationships. As business leaders and entrepreneurs, we know that the capacity to truly differentiate one company from others is vital to the success of a brand. Knowing your backstory and its relevance (either as an individual or as a company) enables you to pick up and weave the often loose threads of your past to create an emergent identity in the present. Armed with this narrative and unique identity, you find the direction and meaning that become the scaffold for your brand.
A company’s origin story is much more than a nice-to-have bit of folklore to use as part of a marketing or communications strategy. It’s the genesis of the company’s values and purpose—the foundation upon which everything else is built.
Why values matter
We subconsciously make values-based decisions all the time, but when we clearly articulate our values, we create a kind of moral shorthand that helps us to consciously and consistently act with integrity. This is especially important in groups, like companies, when people with different backgrounds, life experiences and worldviews come together to work towards a common goal.
Why purpose matters
We each have a responsibility to create, and a hand in creating, a future for the next generation. The daily activities of a business have a huge impact on the wellbeing of people and the planet. It’s important to have a corporate social responsibility policy and crucial to understand the wider contribution your business will make to society. Rather than simply advocating for limiting the damage we do to the world, we can proactively engage in having a positive impact.
Why vision matters
Your purpose is why you do what you do today and every day. Your vision is your aspiration for the future—the contribution you or your work will make.
It’s not easy to measure the impact of having a clear purpose and vision—which is why deliberately designing a business around them is often overlooked. And yet, when we dig deeper, we find that beloved brands, the ones that are successful by every measure, do exactly that. Your brand’s story has the power to be a map, mirror and magnet, and your vision keeps you on track, enabling you to attract like-minded people who want to create the future with you.
Why strategy matters
If a vision is a distant goal in the future, the strategy is the route to getting there—the plan for realising your vision.
Think of your strategy as a path of stepping stones that you navigate to your goal. Your plan, chunked down into manageable pieces. Having a strategy enables you to ask better tactical questions. How will you achieve your vision? What should you prioritise? Where do you need to allocate resources? What skills do you have? What capabilities do you need to build? What comes first and why?
Story-driven Framework In Action
Being a story-driven company is about more than simply articulating your purpose. It’s about staying true to that purpose as you work to realise your vision. Leaders of story-driven companies consistently prioritise the things that will help them achieve their goals while staying true to their values. Every person on the team clearly understands what they are collectively working towards achieving.
Let’s walk through the Story-Driven Framework by using Jack Ma’s company, Alibaba, as an example.
Journey to now
Jack Ma was born in the city of Hangzhou, China, in 1964 to poor parents who were performers. Jack was a scrawny child who was teased for his size, but he says he was never afraid of fighting the bigger kids. After President Nixon’s visit to China in 1972, tourism began to flourish in Hangzhou. As a teenager, Jack learned English by going to a local hotel to meet tourists and offering them free tours in exchange for English lessons. He was rejected for many jobs, including one at Kentucky Fried Chicken. Ma knew that an education would be the key to success for someone like him who didn’t have money or connections. He wanted desperately to go to college but failed the college entrance exams twice. Succeeding the third time, he graduated in 1988 and became a teacher. His love of performance made him a natural teacher.
Ma started a Chinese translation business in the ’90s, and it was while he was on a business trip to the U.S. in 1995 that he become fascinated by the Internet. He was surprised when he first did an online search for ‘beer’ and no Chinese results appeared. That fruitless search sparked the idea to start an Internet company in China. His first two ventures failed, but in April 1999 Ma convinced seventeen friends to invest in Alibaba, an online marketplace that would enable Chinese exporters to sell directly to customers. By October of that same year, Alibaba had raised an additional $25 million in venture capital. In 2005, Yahoo invested $1 billion.
Ma’s entrepreneurial superpower is his gift for motivating employees. When his company broke the record for the biggest IPO in history, raising $25 billion in September 2014, Ma said, ‘Today what we got is not money. What we got is trust from the people.’
Customer First: The interests of our community of consumers and merchants must be our first priority.
Teamwork: We believe teamwork enables ordinary people to achieve extraordinary things.
Embrace Change: In this fast-changing world, we must be flexible, innovative and ready to adapt to new business conditions in order to survive.
Integrity: We expect our people to uphold the highest standards of honesty and to deliver on their commitments.
Passion: We expect our people to approach everything with fire in their belly and never give up on doing what they believe is right.
Commitment: Employees who demonstrate perseverance and excellence are richly rewarded. Nothing should be taken lightly as we encourage our people to “work happily and live seriously.”
Reasons to exist
To ‘make it easy to do business anywhere’.
Aspirations for the future
‘We aim to build the future infrastructure of commerce. We envision that our customers will meet, work and live at Alibaba, and that we will be a company that lasts at least 102 years.’
Aligning opportunities, plans and behaviour
Develop an e-commerce infrastructure that can serve small businesses in China at scale, allowing them to connect with local and international buyers. Developing an English-language website is crucial to success.
Create an online payments system that allows customers to receive goods before releasing funds to sellers.
Raise venture capital funding from company founders and outside investors.
Focus on succeeding in domestic markets with a view to expand internationally.
Retain our focus on building a strong team based in China, while attracting talent from overseas to lead our management team.
Build a loyal customer base through word-of-mouth marketing until we are strongly cash flow positive.
Streamline operations to keep operating costs to a minimum. (This decision affected things like the numbers of engineers the company employed and the location of its English-language team. One early misstep was the decision to move that team to Silicon Valley. This expensive mistake didn’t pay off and was quickly reversed.)
Expand internationally, form strategic international partnerships and intensify Hong Kong and Indian operations. Market at trade shows in Europe and the U.S.
Evolve our strategy for countries with low Internet penetration by incorporating online activities with offline operations through local partners.