… and what CEOs can do about it.
I was reading an article in Entrepreneur magazine titled, “Five Reasons Companies Fail,” which highlights the following list of CEO mistakes that can spell disaster for a firm.
- Poor Market Research, Marketing and Sales
- Inadequate Financial Management
- Blindsided by Externalities
- Poor Leadership and Management Skills
- Lack of Planning and Execution
Number three is the only factor outside of the CEO’s control. There isn’t much a leader can do about a commodities glut, tornadoes or a pandemic wreaking havoc to their business other than scenario planning for that possibility. But the real problem is that the list looks like it is taken straight out of an MBA textbook and suggests that, with better planning, business failures can be averted. However, there lies a primary fail point that occurs well before any solutions to these listed problems can be brought to bear.
… you cannot market products and services …
In my book, The Seven Essential Stories Charismatic Leaders Tell, I assert that “When someone loses their way, it is almost always because they have lost their story. When they regain their story, they will regain their way.” The same is true for companies; businesses fail when their stories fail. Perfect execution on sales, marketing, finance, distribution, and myriad other management topics will not save a company whose story has been unable to create (or retain) functional relevance, emotional significance, and competitive differentiation in their customers’ minds. The very first thing a customer buys is a powerful transformation story. Your company’s products and services are only the tools to fulfil the promises that these customers have “bought” in that story. Because of this, you cannot market products and services alone; you must first market the transformation stories relevant to your customers as a result of wielding your products and services.
Here are some story categories from the book that you could create for your brand:
- The creation story
- Our identity, beliefs, and values
- The big idea (i.e., the transformation story)
- The enemy we face
- The mighty winds (macro trends)
- The journey we must take
- Why we will win
These stories can be told by themselves or in combination. Here’s an example of a (fictional) story that weaves severa.
My name is Nancy Edwards, and I am an independent sporting goods retailer. In 1995, I opened my store, City Cycle, which specializes in high-end cycling; parts, frames, assembled bikes, and all the related clothing and gear. Business was so good that by 2005 we had three stores operating at full capacity. Sure, there were some ups and downs, but we were always growing and profitable. But none of my experience prepared me for what happened with the COVID-19 pandemic. Virtually overnight, my customer traffic stopped, I was forced to layoff staff, and I went from a customer service focus to a survival mindset; desperately negotiating with landlords and suppliers, and praying for the day when the customers would come back.
The good times had not prepared us for this possibility. I had always considered expanding my online store presence. We had a gorgeous website, but, for the most part, it was purposed to drive store traffic, not to conduct online transactions. The fear of losing everything was just the motivation I needed to get my online store fully operational as a stand-alone business.
After doing my research, we chose Shopify as our store platform. I had read that over four million merchants are now using the system, and with the number of user-friendly features, add-ons, and a community of other merchants, it was a no brainer. I was up and running with a small inventory in two weeks, and my entire catalogue of products was up in three weeks.
Although I was forced into starting my online store, I now see that this is something I should have started five years ago. Straightforward, simple, and a full set of built-in sales features make recommending Shopify easy to do. The online shop’s sales are growing at a good clip, and by this time next year, I can see that it will be my fourth store and probably the most profitable.
Thank you, Shopify!
Although this is written in the first person, it is much more than a testimonial; it is a story with a specific beginning, middle, and end:
- Beginning – How things were
- How Nancy started
- Her initial success
- Middle – The inciting incident and the turmoil that ensued
- Being blindsided by the pandemic
- Why she wasn’t prepared
- End – The transformation, rescue and resolution
- How Nancy was able to quickly start an online store, independent of her physical locations
At no time does Nancy focus on Shopify’s specific systems, processes, features, pricing, etc. All of these are unimportant until we convincingly communicate the promise of the transformation story.
CEOs are in the storytelling business. Whether it be to lead their people, recruit strategic alliances, or persuade markets to buy their products and services, compelling, cogent stories are the most effective way to move their company forward.
Get a couple of free chapters of my book, The Seven Essential Stories Charismatic Leaders Tell, by filling out the form in the right-hand column of this page.