Your Company is nothing but a Story
And a Leader's job is to create and sell the Story
In my letter a few weeks ago I wrote briefly about how Yuval Noah Harari in his book Sapiens shows how most structures of our society created around concepts such as Religions, Nations, Money and Ideologies (Communism, Socialism, Liberalism etc.) are in fact stories, shared fictions we all believe in, which have helped our species increase the scale of our cooperation over time and shape the world around us.
In his list of stories which our species have created Harari also talks about companies. Talking about Peugeot as an example, Harari has this to say:
Peugeot belongs to a particular genre of legal fictions called 'limited liability companies'. The idea behind such companies is among humanity's most ingenious inventions.
Harari calls these stories inter-subjective, meaning that they exist within the network of shared beliefs and communications among individuals. In case of Peugeot Harari asserts that, it doesn't exist merely as an individual's belief but as a collective reality acknowledged by millions, from its CEO to its customers worldwide.
But if Harari is indeed correct about companies being no more than stories then what does it mean for those that run them (the CEO and other leaders), invest in them (the investors and the shareholders, work in them (the employees) and deal with them (customers and partners). Harari does not spend too much time in his book on the implications of his insight. I would like to exactly that in this edition.
Leaders are hired essentially to create and sell meaningful stories

If a company is nothing more than a fiction, a story, then it is fairly obvious that the person tasked with the job of creating and selling the story is the CEO who needs to create and sell inspiring and compelling yet realistic and credible stories to all the stakeholders in the company: the investors, the employees, the customers and the partners
Investors need a story on the company’s future plans which can help them assess whether they can make their financial returns
Employees need a story to give meaning to their work. They need to convince themselves why the work they are doing is worth their time and effort
Customers need a story about the company’s product, not only what it is but what it represents (quality, value, craftsmanship, freedom etc.)
Partners need a story to convince them why they should partner with the company instead of its competitors. They need a story to trust the company
I don’t believe there is anything new in saying that storytelling is an important part of any leader’s skillset. There are multiple books written on the topic (some of which I share in the end) and honing the skill is an essential part of most leadership training programs.
But I do believe that there is a difference between leaders understanding that storytelling is part of one of many skill sets that they need to be successful and that it is the singular skill to which all their other skills such emotional intelligence, strategic thinking, business acumen and operational expertise are in service to as tools to help them create and sell effective stories.
One stakeholder I did not mention above, but should be obvious, are the CEOs themselves. CEOs have to be able to sell the story to themselves before they can sell it to others and that is not an easy job when you are the one creating the story. Others, who look towards CEOs, and others in the leadership as all knowing gods, don’t have to deal with the uncertainty. But CEOs have to be able to sleep every night hoping to wake up the next morning to find that their story has not been exposed for the fiction it is.
This is why Self-knowledge and Emotional Awareness rank on top of any list of desired traits for CEOs and leaders. Without Self-knowledge, you cannot sell the story to yourself and without Emotional Intelligence you cannot sell it to others.
This is also why nobody in a leadership position, esp. the CEO, can escape the pull of the Imposter Syndrome. How can you, knowing that at any time the fact that you are just creating and selling stories can be found out.
Quality of their stories is what defines great leaders
It seems a bit harsh calling out the future plans sold to Investors, the vision sold to the Employees, the branding sold to the Customers and the promises sold to the Partners as stories but that is essentially what they are. Albeit, many time, though not always, these are realistic, credible stories based on past performance and in the knowledge of credibility that comes with knowing the people behind these stories
And that is the real job for a CEO. To manage the fine line between creating inspiring and realistic stories. Make a story too inspiring, and it is likely to lose touch with reality; make it too realistic, and it will fail to enlist the required support from the stakeholders (Investors, Employees, Customers and Partners) to help the company achieve its results
Many a CEOs have erred on one side or the other and paid the price. Countless examples come to mind if one were to think about CEOs who got carried away with stories and have landed in trouble. Recent examples of Theranos, WeWork and FTX come to mind.
Successful companies on the other side, by definition, have CEOs that manage this fine line between the impossible and the possible quite well. Obvious names in tech such as Steve Jobs, Bill Gates and Jeff Bezos come to mind with Steve Jobs likely being the most famous for his “reality distortion field” distorted reality but just enough to make it inspiring but never too much to land him into too much trouble. Elon musk seems to be in a league of his own in terms of selling impossible stories and failing and yet maintain trust from investors and customers.
Creating and selling stories in Startups takes it toll

Perhaps this secret (if it is indeed one) that a company is nothing more than a story, is nowhere more obvious than it is in early stage tech companies.
VCs when investing in these companies essentially know and accept the fact that they are being sold stories. This is why no VC worth its salt will ask its company for a 5 year projection when funding it, it is too much to ask of someone selling a story, but instead will endlessly question the founder’s knowledge of the market, their understanding of the key pain points and test them for resilience, endurance and determination. They know that, while what they are being sold might be a story, as long as the market is big enough and the founder is willing to take the pain, the story might one day become a reality. This is also why the most oft repeated phrase in early rounds is “I don’t think your ‘story’ makes sense”
Founders of these startups essentially know that they cannot succeed without being able to sell stories. Incepting a startup, any company for that matter, is an exercise in shameless selling of what the company can be, not what it is right now, to the investors who give the money, the employees who decide to take up the risky stock options and the customers who take a discounted product in hopes of returns in the future.
Employees of these startups many times don’t know that they are being sold a story. And this is why employee churn in early stage tech companies is so high. Being human there is only a limited number of times we can see our trust broken by the same person. Once is enough for most people. Twice or more is likely too much. Its human nature.
This is also why being a startup founder takes its toll. The emotional toll of creating a story, failing to deliver it, effectively breaking the trust of those around you and then having no option but to create a new story (what in startup world is known as “pivoting”) and selling it again to the same people hoping they will trust you again while knowing that they must be wondering what is wrong with you, cannot be understated. Add to this the self-doubt that comes with selling yourself the story each time and you have all the basic elements of a psychological breakdown.
Creating and selling stories in Mature Companies requires support
In a startup, or a small company, a founder or a CEO does not need much help to create an inspiring, credible story and sell it to the stakeholders around the company. Nobody knows the market and the company better than him/her and the company is small enough for the communication to be easy and simple
In a mature company, however, it is a completely different matter. Not only is the creation of an inspiring and credible story difficult but it becomes increasingly difficult to communicate consistently to the investors, to the employees and the customers.
Creating a story becomes difficult to create for multiple reasons. Creating a new story for a company basically boils down to two questions
Where is the opportunity in the market and
Does the company have what it takes to deliver on it
Both these questions become difficult to answer as a company grows to saturate its market and its organization becomes complex and bloated. As a result it becomes unclear where the next opportunity is and difficult to assess what the company is good at.
On the communication side, with the organization having grown manifold, with several layers of hierarchies having been built, it becomes difficult to make sure that employees on the front lines still have the same belief and passion for the story as before.
This is why in mature companies, the CEO needs partners to not only create the story, but to also communicate it in a consistent manner to everyone in the organization
Enter Strategy and Finance
This is where the Strategy and the Finance functions come in. If the singular task of the CEO is to create an inspiring yet realistic story for the company, then the job of the strategy team is to make sure that it is inspiring and compelling, and that of the finance team is to make sure that it is realistic.
Making this distinction between the strategy and finance might seem a little arbitrary to some, because typically both the functions work together to make sure that the story is inspiring and realistic, but it is true that on the margins the strategy function will try to make sure that the story is bold and inspiring while the finance function will try to make sure that he stays grounded in reality
It is for this reason that in most organizations, the head of strategy and the head of finance are close, if not the closest, allies of the CEO. While other functions, such as product, sales, marketing support, and operations and stakeholders such as investors have indeed inputs which influence the story of the company, it is the singular task of these functions to manage these stakeholders on behalf of the CEO and help him ensure that the final story reflects relevant inputs from all parties and at the same time is compelling and credible
The two functions essentially help the CEO to make sure that the story answers the two questions we posed above: that it aims at the right opportunity in the market (area of high growth) and that the company has what it takes to capture the opportunity (aligned with capabilities). They help the CEO navigate the boundary between the impossible and the possible, the inspiring and the realistic, and the bold and the feasible.
The importance of a high performing strategy and finance functions to the CEOs core job of creating and selling stories cannot be overstated. In companies where these two functions are working well the company’s story is not only inspiring, compelling, credible and realistic but also comes across succinctly and clearly.
Wherever these two functions are working well there is a good chance that the company is doing well, employees feel engaged and motivated, the investors feel calmer and the customers feel satisfied. Conversely, in companies where these two functions breakdown - even if everything else is going fine - employees are likely to feel disengaged, investors ask questions about results and customers are unsure of what they can expect.
Further explorations
I would love to hear what you guys think about this topic. If you are a startup founder I would love to hear what you think. If you are a leader in a big, mature company with complex org then I would also love to hear what you think.
I would also love to hear how useful you found this topic. Are there similar topics you are interested in? What would you want to hear about next?
I would like to end this edition with some resources I came across while structuring my thoughts for this article and which you can use to further explore this and adjacent topics:
HBR Articles: Harvard Business review perhaps has the best repository of online thought leadership on the topic of leadership. The ones I found useful were The Positives—and Perils—of Storytelling which further explores Harari’s idea of our world consisting of structures built out of stories and what it means for businesses; and Storytelling That Moves People which is an interview with Robert McKee, the world’s best-known and most respected screenwriting lecturer, on the importance of storytelling for leaders and how they can tell them.
Books: There are multiple books that have been published on some of the tech companies mentioned here and others who got into trouble. I thought I’d share some of them here such as those on Wework (The cult of We, Billion Dollar Loser) Theranos (Bad Blood), Uber (Superpumped) and FTX (Going Infinite). Personally I have only read Bad Blood by John Carreyrou and Superpumed by Mike Isaac and would definitely recommend Bad Blood as it is a much more captivating read with much higher stakes and a much bigger scandal at the heart of it. Shoe Dog by Phil Knight, the founder of Nike, is another great book which is relevant to the topic in this post. You cannot read and not come out thinking that Phil was destined to create Nike. Phil is clearly a great storyteller and excels even in terms of the stories he tells himself (which explains his success)
TV Series: If you are not interested in reading any of the books above then you can look to binge watch some of the shows such as WeCrashed about WeWork on AppleTV, The Dropout about Theranos on Disney or Superpumped about Uber on Showtime. Personally I really enjoyed watching Wecrashed which stars Jared Leto and Anne Hathaway. It has really great acting from the lead actors and high production value as well.