Chapter 3: No story, no strategy.

“Companies that don't have a clearly articulated story don't have a clear and well thought-out strategy. The company story is the company strategy”. These are the words of Ben Horowitz who bult one of the biggest and most influential VC companies in the US.

Andreessen Horowitz manage a fund currently worth around $19bn, and were early investors in companies such as Twitter. So British-born Horowitz knows a bit about spotting a company with growth potential.

Going back to the previous blog post, I stressed the need to be clear on the why for project. Horowitz believes the why questions are the most important and sees the answer as the company story. "The story must explain at a fundamental level why you exist. Why does the world need your company? Why do we need to be doing what we're doing and why is it important?”

I think this also applies to large innovation programmes. I’ve worked on a few in my time with Innovate UK and the whole process really unlocks when you get the story right. An example was working on the Catapult programme.

In 2010 I was asked to join a team developing the business cases for various short-list candidates for what were then termed Technology and Innovation Centres (TICs, later branded Catapults). A big part of the meetings (as I recall) was getting to the nub of what a TIC was or wasn’t. Judging which proposals made sense to be TICs and which didn’t wasn’t progressing until we nailed that overarching narrative. But to do so, we had to really listen to the stories that were emerging.

An “aha” moment came when we understood why the proposed Space TIC should be a Satellite TIC. It was already agreed that the need for a Cell and Gene TIC was clear. That sector was characterised by small companies that once they discovered a new treatment, needed expensive equipment to make enough of the therapeutic to do trials and validate it. Scaling up to market faster was to challenge. There was a clear case to use public money to invest in the equipment and experts all companies in the growing sector needed to access rather them all be held up because they couldn’t afford it.

After several iterations, the case for the UK’s satellite sector came to a similar requirement. The cost in scaling up a space-based innovation is getting it on a satellite. So, let’s establish a centre who can provide a satellite you can put your kit on and buy space on launches to get it up there. Experts at the centre can manage the process of getting your data down to Earth.

The common thread here revealed the grand narrative: TICs (or Catapults) should accelerate the scale up of a solution to market by providing the kit and know-how needed. Now it became easier to describe how a TIC candidate fitted, or not. I was working on a case for a Resource Efficiency TIC. It was clear very early that a TIC was the wrong answer for the innovation challenges this sector faced. My final report said so and explained what was needed instead. That programme got funded.

Other TIC candidates tried to force fit their need for support into the strategy. I’ve seen proposals reverse engineered from the funding available too many times. Not just applicants to our competitions but from sectors saying they want a Big New Shiny ThingTM when a new programme is announced, without ever really understanding if that’s the right answer for their problems. Explaining why isn’t always easy against a wall of cognitive dissonance. Having a grand narrative, a story of your strategy, is the best way to explain what is in and what is out.

In the last blog I explored why an application has to have story logic, and it is the same for major programmes. I’ve seen too many major programmes bend their strategy out of shape to accommodate all the stories within it. Programmes are developed to deliver on major change. As we’ve seen, all stories are about change, so tell the story of the change the programme seeks bring about. If a project is being considered as part of the programme and it doesn’t fit the narrative, it doesn’t fit the strategy. No matter how worthy it is, or how similar it may seem, it would be the wrong thing to do.

When I have run innovation competitions for Innovate UK, I start by really trying to boil down the change journey we are trying to stimulate with the funding. No matter how carefully you write any scope or rules, applicants will always find ways you haven’t thought of to claim a proposal fits your criteria, even when nit clearly doesn’t. I’ve often compared it to the Spirit and Laws of Cricket. The Laws are the rules of the game, but the Spirit is collective understand of what is sporting and what isn’t. Story encapsulates collective understanding so I try and find the narrative that will bind all the project we fund together to be greater than their individual parts and describe that.

It is no different for a company and their strategy. It is very easy to be distracted by opportunities, but the best businesses focus ruthlessly on what they do best. If what they do and why are clear to everyone, it is easy to ignore those distractions. Around 15 years ago Parker Pens were a failing stationery company. A rather stationary company (apologies). They weren’t successful because they didn’t understand why customers bought their product. Realising that their pens were mostly bought as gifts revitalised their approach. They now focus on luxury products that can be personalised.

Another of my heroes is Michael Faraday. He was a brilliant scientist, discovering chemicals and physical principles that underpin much of modern life, but above all he was a storyteller. He understood the power of an overarching narrative and brought this to bear on his famous Christmas Lectures at the Royal Institution – a tradition that continues to today. In 1848 his series of six lectures were tied together with a single theme – a burning candle. The collection of these is still available in print as the Chemical History of a Candle. Faraday weaved together scientific concepts such as the gases of the air, respiration, the nature of water and making acids – all with a burning candle as a starting point. The brilliance is in the simplicity. Revealing such wonder from a simple, everyday starting point. In explaining what you see when a candle burns, you can reveal the many layers of science discoveries and how they all interconnect to build a fuller picture.

“Any intelligent fool can make things bigger and more complex… it takes a touch of genius and a lot of courage to move in the opposite direction” Albert Einstein, physicist (who had a picture of Faraday on his wall)?

For good strategy, each innovation or project is but one story in a grander narrative. Those stories are part of a wider system and together build to describe that a new reality. The really powerful benefit of a strategy as a narrative is that the stories themselves drive cultural change in the system. And that’s what I explore next.

A last word from Horowitz: “The mistake people make is thinking the story is just about marketing. No, the story is the strategy. If you make your story better you make the strategy better.”