The stories that cause companies to fail

We humans tell stories to propagate truths.

This corollary forms the bedrock of whatever makes us homo-sapiens, and allows us to coordinate with millions of strangers. Religions are stories that convey spiritual truths. Treacherous expeditions like transatlantic voyages were sparked by a story of riches and spices across the ocean. Organizations today are centered around certain truths – market needs that can be met for a profit. On identifying this need, stories are created to convey it, such as mission statements, sales targets and key performance indicators. Organizations are stories themselves. They exist only in our imagination.

But with time, we start mistaking the stories for the truth. This can lead to the narrowing of our minds, cause our stories to collide and result in religious fundamentalism. This also causes companies to a focus on quick returns and short-term efficiency over long-term plans that emphasize effectiveness. Eventually, a newcomer who is not burdened by these stories disrupts established organizations. The consequence is inevitably suffering.

Stories are powerful. They are the glues that bind us to a common objective. However, it is important to build the awareness to test our stories, and avoid mistaking them for their underlying truth. Only organizations that do this regularly can survive in an ever-changing environment.

Credits: Sapiens by Yuval Noah Harari

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