The importance of storytelling, and how it can help Facebook battle disruption

Last week, I said goodbye to my colleagues at Facebook, the end of a nearly two year adventure after they brought me and my startup Packagd on board. During my time, I had the privilege of creating a new commerce incubation group responsible for building and launching features like Live Shopping, Gifting, and most recently Super. I also got to see how the 6th most valuable company in the world, with nearly a trillion dollar market cap, operates and it was impressive to experience.

Coming from a startup, it was an adjustment working in a 60,000 employee organization. But Facebook still manages to maintain some of the best traits of small companies, in particular the ability to move at startup speed when needed, aided by huge amounts of tooling. There are entire internal products to assist everything from running performance reviews, to directing you turn by turn to open conference rooms, to automatically rewriting your code to match underlying API changes.

Facebook also has processes that provide the clarity and focus of a small company, or more accurately a collection of thousands of small companies. Most notable is that product plans, roadmaps, objectives, and metrics (oh so many metrics) for all projects are openly shared across the company, promoting a startup-like culture of intellectual honesty and accountability.

But despite having the efficiency, transparency, and drive of a great startup, I was never reminded of a startup while at Facebook. It wasn’t because of what was present — the sheer size that surrounded me — but rather because of something that was missing. An important skill that you bump into everyday at startups, but is hard to find within Facebook and many other large enterprises. And that skill is storytelling.

Always be pitching

As I’ve written previously, startup founders are some of the very best storytellers in the world. They skillfully combine data, facts, and strategy with a memorable personal journey that’s shaped their worldview, to create something that’s equal parts provocative and persuasive. As Steve Jobs famously said:

“The most powerful person in the world is the storyteller.”

Some founders are born great storytellers, but many others are molded into it by their entrepreneurial journey. Founders are constantly recreating, refining, and reciting the narrative behind their product and company because they simply have to. As a new company still finding its place in the world, more often than not the customers, partners, recruits, and investors you come across have no idea who you are and what you do. Your only recourse is to tell them all, tell anyone who will listen, tell the entire world the story of you, your company, and your product over and over again.

What is the company’s mission and vision? What painful, acute problems does your product solve? Why does the work you do matter to the world? Founders and their teams can answer these questions immediately, eloquently, and consistently, like a reflex because they are constantly required to. Out of necessity, early startup teams put in their 10,000 hours of storytelling, which then turns them into expert storytellers.

Now contrast that with successful incumbents like Facebook who everyone has already heard of, uses their products, and has friends that work there. If there’s any downside to company success and product market fit, it’s this: teams at those established companies no longer have any reason to tell their story. Everyone knows who Facebook is and what the product does — they may know it better than the people who work there. So those people stop being asked to explain things. They stop jumping at the opportunity to share their company and product stories. They stop being storytellers, until they’ve forgotten how to be storytellers.

The Horizon 2 Challenge

So what, you might ask? Even if you buy the premise that startups are better at storytelling than Facebook, who cares? Facebook is succeeding at nearly unprecedented levels so does storytelling even matter? To that question, I offer up a story.

Back in 2009, management consulting firm McKinsey created a compelling management framework called the Three Horizons to help companies think through business growth in 3 distinct time frames:

1. Horizon 1 is when a company focuses on its current business model and core capabilities. Think of this as maximizing profits over the next quarter or half.
2. Horizon 2 is when a company expands its existing business into new markets or to new customers through innovation. Think of this as founding a new project that will eventually lead to profits, but only after hard work over several years.
3. Horizon 3 is when a company creates entirely different businesses or capabilities that are based on radical disruption. Think of this as researching new technologies or seeding new markets that in a decade may (or may not) become the future of the company.

World class, successful companies like Facebook are great at Horizon 1 (ex. beating EPS estimates for more than 5 consecutive years) — that’s why they are successful in the first place. Great companies also understand the value and importance of not waiting for the future, which is why they soon excel at Horizon 3. Think of Facebook’s efforts pioneering VR, or similarly significant decade forward commitments at Google X or Microsoft Research or the legendary Xerox Parc. Despite the long lead time involved, these companies show tremendous forward thinking and commitment to securing their future by inventing it.

But Horizon 2 turns out to be the trickiest stage for incumbent companies. Unlike Horizon 1, Horizon 2 contributions are too far out to provide any immediate business impact. Yet those Horizon 2 contributions are also not far out enough into the future to achieve truly radical transformation. They are unfortunately stuck in the middle, unable to be prioritized by a company for either quarterly metrics or an investment in the far future.

According to the Harvard Business Review:

“A Horizon 2 offering has a hard time getting established in an organization. Like a kid attempting to hop on a merry-go-round in motion, it needs a burst of energy to get on board.”

And this is where storytelling comes in.

Horizon 1 projects don’t require any storytelling because they are rooted in the company’s present — it’s about executing against the same story that everyone already knows as opposed to creating a new story. Horizon 3 projects are so futuristic that the story writes itself, often in just a few words — there’s no storytelling skill required to capture the imagination when all you have to say is “metaverse”, “self-driving cars”, or “AI assistant”.

Storytelling skill is critical for Horizon 2 projects however, when you have to craft a story that somehow blends excitement in the long term with outcomes in the short term. A story that combines both daring ambition with achievable results. A story that resembles a founder’s entrepreneurial journey. A story that can create a burst of energy to fuel the Horizon 2 project to completion.

Horizon 2 Storytelling

Without storytelling, companies struggle at Horizon 2 and leave themselves vulnerable to the worst kind of disruption: disruption that’s obvious. Whether it’s Microsoft with the web, or Comcast with streaming, or maybe Facebook one day with ephemeral messaging or short form video or interactive audio, the most frustrating part of these Horizon 2 disruptions — disruptions only a few years in the making — is that they were all known. The incumbents saw the disruption coming but didn’t find the opportunity meaningful enough. There were stories told about those opportunities, but the storytelling wasn’t compelling enough.

Better storytelling might have been enough to establish the opportunity, to earn an investment in a new product, to fend off a disruption, to overcome the Horizon 2 challenge. And fortunately, storytelling is not a skill limited to only startups. Some of the best storytellers in the world are large, incumbent companies.

Amazon

Amazon has organized their project planning process around their now famous 6-page memos. For all major business decisions, a 6-page memo is required to be written, and decision making meetings begin with 30 minutes of silence as everyone reads through printouts of that memo instead of listening to a presentation. Why? Because it unlocks the power of storytelling.

The 6-page memo forces ideas to be laid out as a narrative story, with a clear beginning, middle, and end. Internally at Amazon, these 6-page memos are even called “narratives”. These narrative stories all include a customer as the protagonist, a problem or conflict to resolve, and a solution that results in a happy ending for that customer. These stories all have thoughtful facts and reasoning that can hold up against criticism and debate. These stories all have to stand on their own such that anyone can read them and understand the subject, which allow the stories to spread.

It’s no surprise that Amazon has thrived in Horizon 2 efforts from groceries to Alexa to Prime Video that all began with a story inspiring enough to provide a burst of energy and convince the company to commit multiple years to. As Jeff Bezos would say about the benefits of storytelling:

“There is no way to write a six-page, narratively structured memo and not have clear thinking.”

Nike

Everyone knows that Nike is one of the most prolific and innovative external storytellers in the world. There are books, case studies, and even university courses analyzing how Nike has expertly used storytelling to market their brand and products to great success. For the past 7 consecutive years, Nike has been recognized as having the world’s most valuable apparel brand.

But what you may not know is that Nike also invests heavily in internal storytelling. There are entire communication teams dedicated to creating internal marketing materials and videos with the same high production value as their Olympic commercials. “Corporate Storyteller” is a senior executive title there. Storytelling has been key to the success of Nike’s explosive direct to consumer business, a multi-year Horizon 2 initiative where Nike gets to communicate their brand story to customers more effectively than any retail partner possibly could.

A few years ago, I was invited to Beaverton to give a presentation about Hulu to the Nike product and engineering org. The first thing Nike did was assign a team of marketing and design specialists to totally redo my presentation with custom graphics and videos that were up to Nike’s storytelling bar. Even when it’s a story about another company, Nike insists on making sure it’s told well.

Airbnb

In 2012, Airbnb CEO Brian Chesky read a biography on Walt Disney over his Christmas vacation and took particular note on a chapter detailing the making of the film Snow White. As the world’s first ever feature-length animated movie, Disney took extra care in the production and planned out the entire film through storyboards, a visual outline of the story that helped everyone collaborating on the project understand the filmmaker’s vision. Chesky was so inspired by the storyboard approach that he hired Pixar animator Nick Sung to produce physical storyboards for Airbnb’s customer journey (a project appropriately codenamed Snow White).

These storyboards would go on to influence decisions across the entire company from product, to marketing, to customer service, and more. The storyboards provided clarity and focus, and helped Airbnb realize their product wasn’t a website, but a real world service. They inspired Airbnb to make critically important Horizon 2 investments in areas like mobile and hosted experiences. As Airbnb co-founder Joe Gebbia would say about the storyboards:

“As opposed to working out of a spreadsheet, this is us creating characters and starting to understand the personality of these characters. It’s just like watching a movie, honestly. We’re almost sometimes acting it out. And that is just such a different experience than working on a spreadsheet.”

That’s some next level storytelling.

A new story

When the Packagd team joined Facebook, I wrote that the ideal work situation is when you can build things you’re passionate about, and do so in a way that makes a meaningful impact. I’m grateful that at Facebook, I got to work on projects that I love around digital commerce, but also do so at scales that matter. I hope that my next adventure will bring those two things — interest and meaning — together again, and I look forward to sharing that story with everyone soon.