The Growing Importance of Storytelling in the Business World
Communications have played a major role in my work over the past few decades. During this period, I was involved in organizing emerging business opportunities at IBM, including the Internet and Linux. Since retiring from IBM in 2007, I’ve continued my involvement with technology-based initiatives, - AI and blockchain most recently, - through my consulting and academic activities as well as the weekly blogs that I’ve now been writing for the past dozen years.
Over the years I’ve learned that when trying to explain a complex new concept or product, it’s important to engage in a kind-of conversation with your intended audience, where you talk about what's in your mind, your questions, your doubts, what you know and what you don't know. In short, you’re telling a story about the concept, product or brand you’re trying to explain.
While storytelling is mostly associated with entertainment, education and culture, it also plays a major role in business. Storytelling is widely used in the development of brands for products as well as companies. And, the more powerful, important and complex the brand messages you are trying to convey, the more important it is that you do so by telling a compelling but simple, - i.e., understandable, - story.
Good storytelling is particularly important when introducing a complex and potentially disruptive offering in the marketplace whose value is not well understood. It’s a natural way of explaining what the new innovation is all about. As a concrete example, let me share my experiences with the development of IBM’s Internet and e-business strategy in the mid-late 1990s.
At the time, a lot was happening around the Internet. It was all very exciting, but it was not clear where things were heading and what the implications would be to the world of business. A key part of our job was to figure out the business value around the Internet, and to then extensively communicate it to our customers and the wider marketplace.
Working closely with Ogilvy, IBM’s marketing agency, we developed our overriding Internet strategy which we called e-business. Our challenge was not only to explain what e-business was all about, but also to leverage e-business to help re-build the IBM brand, given that the company was just coming out of a really serious near-death experience.
Ogilvy created an award winning campaign, bringing e-business to life with compelling stories over a variety of communication channels, including memorable TV vignettes that nicely captured what it meant to do business over the emerging Internet. The campaign succeeded in closely associating IBM with the Internet and re-positioning the IBM brand for the future.
Over the next decade I continued to work closely with Ogilvy on strategies and campaigns for other initiatives I was working on. When IBM embraced Linux in the early 2000s, many in the business world were totally perplexed that IBM was so aggressively supporting an initiative that, in their opinion, was so removed from the IT mainstream. We once more had to carefully explain our reasons for supporting Linux, including the value of collaborating with an open community that included some of the best programmers and computer scientists around the world. And, once more, Ogilvy created a series of memorable ads that helped us tell our story.
A few weeks ago, Chris Wall - a senior executive at Ogilvy with whom I had worked closely on the e-business and Linux marketing strategies, - asked me if I would meet with some of his colleagues at Ogilvy to share my opinion on how to best explain another highly complex emerging initiative, - blockchain.
Blockchain technologies are now reaching an inflection point of market acceptance, as evidenced by the increasing number of articles, reports and books being written on the subject. But, despite all these publications, I think that most people have little idea what blockchain is about and why we’re so excited about such a seemingly exotic topic.
It’s important to remember that while most everyone in the business world now understands the value of the Internet and Linux, this was not the case when they first transitioned from the research world to the general marketplace. It took considerable efforts to communicate what it was we were so excited about. This is now the case with blockchain and related technologies
First of all, we should distinguish between three important and related concepts: bitcoin, the best known and most widely held digital currency; the blockchain architecture underpinning bitcoin, whose protocols were specifically designed to control the creation and transfer of bitcoins; and the blockchain technologies being embraced in the wider marketplace because of their potential to significantly enhance the security and efficiency of our economic and legal systems. My interests are primarily centered on this last point, but, let me just say a few words about bitcoin, - the digital currency that first put blockchain on the map around 2008.
In his recently published book, Reinventing Remittances with Bitcoin, Filipino entrepreneur Luis Buenaventura wrote that the key appeal of bitcoin is its potential impact on the $430 billion international remittance industry. “One of the cryptocurrency’s most obvious uses is, after all, sending money across the planet with roughly the same effort as sending an email. The potential effect on emerging markets — aggregate savings that are larger than most countries’ education budgets - cannot be overstated.”
He noted that “most migrant workers (i.e. the most consistent remitters) don’t care about cryptocurrency or the blockchain or the coming financial revolution, but will naturally go to a service if it saves them money.” That, in a nutshell, is the overriding appeal of bitcoin.
Let me know discuss the use of blockchain technologies for enhancing the overall security and efficiency of our transactional systems. As with the Internet, the Web and other major technologies, the blockchain has now transcended its original bitcoin-centric objective. Blockchain technologies have the potential to significantly strengthen the security of our 21st century digital economy.
Over the past decades, we’ve been moving to a world where information of all kinds is increasingly digital, and where many different kinds of online transactions are now taking place between people, institutions, and things. At the same time, Internet threats are growing. Large-scale fraud, data breaches, and identity thefts are becoming more common, and companies are finding that cyber-attacks are costly to prevent and recover from.
The Internet has become one of, if not, the most prolific innovation platform the world has ever seen. A major reason for the Internet’s ability to keep growing and adapting to widely different applications is that it’s stuck to its basic data-transport mission, i.e., just moving bits around. The Internet has no idea what the bits mean or what they’re trying to accomplish. That’s all the responsibility of the applications running on top of it.
Consequently, there’s no one overall owner responsible for security over the Internet. Responsibility for security is divided among several actors, making it significantly harder to achieve. Blockchain technologies should help us enhance the security of Internet transactions by developing the required standards and open source software like hyperledger.
In addition, blockchain promises to help us transform key legacy infrastructures that are too inflexible and inefficient for our global digital economy. In particular, blockchain technologies are bringing one of the most important and oldest concepts, the ledger, to the Internet age.
Ledgers constitute a permanent record of all the economic transactions an institution handles, whether it’s a bank managing deposits, loans and payments; a brokerage house keeping track of stocks and bonds; or a government office recording births and deaths, the ownership and sale of land and houses, or legal identity documents like passports and driver licenses. They’re one of the oldest and most important concepts in finance and other mission critical transaction systems.
Over the years, institutions have automated their original paper-based ledgers with sophisticated IT applications and data bases. But while most ledgers are now digital, their underlying structure has not changed. Each institution continues to own and manage its own ledger, synchronizing its records with those of other institutions as appropriate, - a cumbersome process that often takes days and involves a number of intermediaries.
As a recent Harvard Business Review article explained: “TCP/IP unlocked new economic value by dramatically lowering the cost of connections. Similarly, blockchain could dramatically reduce the cost of transactions. It has the potential to become the system of record for all transactions. If that happens, the economy will once again undergo a radical shift, as new, blockchain-based sources of influence and control emerge.”
Once more, we need storytelling to help us explain what blockchain is about and why we should work together to make it a reality. The more complex our technologies and their applications, the more important it is that we communicate their value through compelling but simple stories.