Transformation Part 3: Story Time

Every act of change begins with a paradox: our daily routines feel grounded, even unshakable, yet they’re built on mental shortcuts designed to handle life’s uncertainties. And these decision-making frameworks are not as stable as they seem. They’re stitched together from familiar patterns, heuristics, and cognitive biases—our tendency to rely too heavily on initial information (anchoring), to lean on whatever comes to mind most easily (availability), and to avoid losses more than we seek gains (loss aversion). These mental shortcuts give us a sense of control, making life feel predictable and orderly. But they’re also what makes change so difficult, as we hold tight to the stories we’ve crafted for stability—even when those stories stop serving us.

Change, whether in a corporate or personal context, isn’t simply a matter of logic or process—it’s a negotiation with human psychology.

Pioneers in the psychology of judgment and decision-making, Daniel Kahneman and Amos Tversky spent years exploring how our minds simplify the complexities of the world around us. They revealed that our “predictions” are less about logic and more about stories we tell ourselves to feel secure. Their research revealed that people lean on narratives to shape their understanding of the future. This attachment to a coherent story is comforting, especially when the real world offers anything but certainty. “People live under uncertainty whether they like it or not,” Tversky noted. But if change threatens to disrupt these familiar stories, people cling to them even more tightly, unwilling to lose the comfort they provide. This dynamic becomes one of the central challenges for anyone attempting a significant transformation—whether in a company, a community, or an individual’s life.

National Geographic thrived, for over a century, on a single narrative: to explore the world through the pages of its iconic print magazine. For generations of readers, “National Geographic” was synonymous with the feel of a glossy, high-quality magazine, the kind that could transport readers to distant lands with just a few pages. This wasn’t just a business model; it was a story the organization and its readers cherished, one that defined what it meant to explore the world.

But as the 2000s approached, digital media disrupted the publishing world. Advertising revenue shifted online, readers migrated to screens, and print was quickly losing its power. Despite these clear signals, National Geographic clung to its print-based identity, rooted in the belief that readers preferred the physical, curated experience of a magazine. For a long time, National Geographic’s leaders resisted digital transformation, not from ignorance but because the change felt like a threat to Nat Geo’s very soul.

Transformation isn’t about abandoning a legacy but expanding it, opening new doors to the same mission.

When John Fahey stepped in as CEO in 1998, he saw that clinging to the print narrative could no longer sustain the company. His solution wasn’t simply to pivot to digital, but to tell a new story—a story of how digital channels could carry National Geographic’s mission of exploration to even more people. By reshaping the narrative from one of glossy print to one of multi-platform storytelling, Fahey helped employees embrace the change. It wasn’t about abandoning a legacy but expanding it, opening new doors to the same mission.

Through Fahey’s careful reframing, National Geographic successfully transitioned into a multi-platform brand with a strong digital presence, millions of followers on social media, and award-winning documentaries. This transformation did not erase the organization’s founding narrative but extended it, allowing National Geographic to evolve without losing its identity.

The New United Motor Manufacturing, Inc. (NUMMI) plant, a joint venture between General Motors and Toyota, provides another, cautionary, example of this phenomenon. The NUMMI experiment was intended to bring the rigor and quality of Toyota’s production system to GM’s operations—a chance to combine the best of both companies.?

At the time, GM was struggling with quality issues and a notoriously combative workplace culture. But Toyota brought a new model: a cooperative system of continuous improvement, teamwork, and employee empowerment. Workers on the factory floor were given the autonomy to pull the “andon cord” to stop the assembly line when they detected a problem—something unthinkable in traditional GM plants, where productivity was everything.

Leaders can help their teams see that what lies ahead isn’t so much a foreign destination as the next chapter in a shared journey.

But the transformation didn’t go as planned. Even after NUMMI’s success, GM was slow to adopt Toyota’s model across its plants. Its leadership was mired in a narrative of superiority—that American manufacturing was the best, and that Toyota’s success was either a fluke or simply “different.” GM’s managers clung to a story they knew, one that protected their roles and didn’t challenge the status quo. It was a clear example of Tversky’s observation that “people often work hard to obtain information they already have and avoid new knowledge.”

While Toyota’s collaborative approach yielded high-quality, cost-effective cars, GM’s leaders remained resistant to the system’s principles, undermining transformation efforts at every turn. NUMMI exemplifies how entrenched beliefs can sabotage a transformation, even when the path to improvement is clear. Instead of seeing the Toyota model as an enhancement, many at GM viewed it as a threat to the old way—a disruption to the narrative they relied on to understand their work.

These two stories highlight a key insight from Kahneman and Tversky’s work: change, whether in a corporate or personal context, isn’t simply a matter of logic or process—it’s a negotiation with human psychology. People predict the future through stories that help them make sense of their role in it. And when that story is threatened, it’s human nature to push back.

Practical Methods for Navigating Narratives and Biases in Change

For leaders guiding a transformation, Kahneman and Tversky’s principles offer invaluable strategies. By understanding how people predict, rationalize, and sometimes resist, leaders can adapt their approach to respect these underlying psychological frameworks rather than bulldozing through them.

Reframe Change as a Natural Continuation of the Familiar

In one of his reflections, Tversky noted that people tend to believe “everything that has already happened must have been inevitable.” This tendency to rationalize the past as a cohesive narrative is a powerful tool. Leaders can leverage this by framing transformation as the next chapter in an organization’s success story rather than a sudden upheaval. For example, if a company is shifting to a product-focused model, leaders might emphasize how the new approach builds on past achievements, making the change feel like a natural evolution rather than a break.

Make the Uncertain Seem Predictable with Pilots and Prototypes

Tversky wrote, “People believe they can tell the future if they work hard enough,” highlighting our need to impose predictability on the unknown. Leaders can harness this need by introducing pilots or prototypes. Rather than asking employees to embrace a massive shift overnight, pilots provide a controlled environment for employees to see the results firsthand. Pilots transform the abstract into something tangible, showing that change is not only feasible but manageable.

Use Social Proof to Counter Misbelief

Behavioral economist Dan Ariely’s work in “Misbelief” sheds light on how people cling to familiar but outdated narratives. When employees see peers—especially respected team members—embracing change, they are more likely to reexamine their own reservations. Leaders can leverage this by highlighting early adopters and sharing their stories. Social proof, when carefully curated, can transform skepticism into enthusiasm, creating a ripple effect that reinforces the benefits of the new approach.

Reframe Change to Address Loss Aversion

Kahneman’s research on loss aversion shows that people often fear losing what they have more than they value gaining something new. Leaders can counteract this bias by framing transformation as a way to protect what’s valued within the organization. For instance, if moving to a product model can enhance customer loyalty, frame it as a way to safeguard the organization’s relevance. By positioning change as a defense against potential loss, leaders can help people feel secure rather than threatened.

Normalize “Surprises are Expected” as Part of the Process

Tversky observed that “surprises are expected” in a probabilistic world—while we can predict that unexpected events will occur, we cannot specify which ones they will be. Leaders can help employees see that setbacks are not failures but valuable opportunities to refine their approach. By framing surprises as expected learning points rather than threats, leaders normalize the concept of uncertainty. Surprises become part of the journey rather than obstacles, reducing anxiety and encouraging resilience.

Anticipate and Address the Psychological Cost of Change

Transformation brings not only logistical challenges but psychological ones as well. Just as people resist physical costs, they resist the emotional toll of letting go of familiar routines. Leaders can ease this transition by offering empathy, support, and spaces for open dialogue. Empathy workshops, forums for discussion, and coaching sessions can help individuals process the change, addressing the psychological “cost” and creating a safe environment for adaptation.

Building a Culture of Transformation

Kahneman, Tversky, and Ariely’s principles aren’t just academic ideas; they’re blueprints for guiding people through the complexities of transformation. Effective change management respects the psychological need for stability and coherence. It invites employees to see transformation not as a break from the past but as an extension of a shared story.

By honoring the narratives that shape people’s identities and decisions, leaders can help their teams see that what lies ahead isn’t so much a foreign destination as the next chapter in a shared journey. Transformation, in this sense, becomes less about a sudden leap and more about finding the continuity that connects the past, present, and future. In this way, leaders can create a culture that’s adaptive, resilient, and ultimately ready for the inevitable surprises of the journey ahead.