Every business begins with a story
Late last year, Localist chief executive Christina Domecq made an off-hand remark at a business lunch. She said every business begins with a story.
It seems obvious, but many businesses have real difficulty in working out what their story is and how to tell it.
It's a problem that has attracted some of the great communications minds, such as script-writer and tutor Robert McKee. Speaking to Harvard Business Review, McKee said it is a CEO's job to motivate people to reach certain goals.
"To do that, he or she must engage their emotions, and the key to their hearts is story," he said.
But in the business world the focus is on intellectual persuasion via what McKee calls "conventional rhetoric".
"It's an intellectual process, and in the business world it usually consists of a PowerPoint slide presentation in which you say, "Here is our company's biggest challenge, and here is what we need to do to prosper." And you build your case by giving statistics and facts and quotes from authorities."
But people have their own authorities, statistics, and experiences, he said, so while you're trying to persuade them, they are "arguing with you in their heads". Even if you succeed you've done so only on an intellectual basis.
"The other way to persuade people - and ultimately a much more powerful way -- is by uniting an idea with an emotion. The best way to do that is by telling a compelling story. In a story, you not only weave a lot of information into the telling but you also arouse your listener's emotions and energy."
To explore the challenges of business storytelling, Fairfax Media and GE Capital hosted a breakfast panel in Auckland with three executives who each in their own way are exponents of the story.
Philip Poole, marketing manager of chocolate company Whittaker's, said if a company builds a strong story you "turn spectators into supporters".
"Once you get supporters it's the brand they will always buy. Story is very important to differentiate yourself from other brands."
The vision for Whittaker's has been to "produce world-class chocolate from Porirua", he said. The story is about a family company creating chocolate from the "bean to the bar" with all processing done locally.
"We do that because we can control the quality," he said. Whittaker's, for instance, could import cocoa liquor, but if it did it couldn't control the quality.
"Chocolate is a small indulgence. People don't want to be disappointed."
Every day, owners Bryan and Andrew Whittaker are in the factory working on delivering quality.
"If you look at successful business and brands around the world they all have a great story behind them but it's not only a great story, it's one that relates to the consumer as well," Poole said.
For Greg McAlister, managing director of internet service provider Orcon, the issue was one of rediscovering the story - and Orcon's identity as a challenger in the broadband market.
The story of Orcon started with founder Seeby Woodhouse, he said. He wanted to build a great
internet company and differentiate it from the major providers. But after Orcon was bought by state-owned networking company Kordia, "the story lost its passion".
When McAlister joined Orcon early last year he realised the story should be the same as it once was. As with Whittaker's, it was about quality: "If want the best, that's where you come."
"We had to get the community of our own organisation believing we are the best again," he said.
"We are telling that story that if you are passionate about the internet you should be with Orcon.
That's the story we've got to tell internally and that's the story we've got to tell externally as well."
Once staff were reenergised and the customer conversation had improved, a marketing revamp followed with the launch of Orcon's "first world internet" campaign, fronted by avid gamer and controversial internet figure Kim Dotcom.
"We got risky and asked Kim Dotcom," McAlister said. "It was out there and certainly got a lot of cut through. It's working; our sales are up 70 per cent."
Nakedbus, though, was a start-up story.
"I founded Nakedbus just over seven years ago. The question I want to share is ‘how does a bus company that doesn't own any buses go from zero passengers to 30 per cent of the market in seven years?", founder Hamish Nuttall said.
"It starts with the passion for public transport. I'm a public transport advocate. I'm an advocate for the user in the business."
In those seven years, the company has gone from carrying three passengers on its first day to half a million passengers a year.
"Right along the line we've tried to understand what our passengers want and deliver that to them.
It's a question of aligning ourselves with the customers, keeping it simple and keeping a really simple message.
"Many of you would know about the black buses and fares from one dollar and so on. We are the lowest price in the market and we will defend that to the hilt."
Nuttall agrees with Air New Zealand's message that "getting there is everything".
"People don't want to buy bus travel, they want to buy destinations and I guess that's what we are delivering to them," he said.
If passengers can get to their destinations more cheaply, they have more money to spend on the things they really want to do once they get there.
So how do you find your story?
For Orcon it was about "fixing the basics", especially around customer care, said McAlister. And again that grew out of getting the staff to really believe in what the company once again stood for.
"From there the external story grows," he said.
"The power of the brand came to life again by just fixing the basics and giving the staff confidence to get back into it and be a part of it."
That created internal conversations that, in turn, led to innovation and a rediscovery of things Orcon once did but had stopped doing, he said.
Whittaker's Poole said it is important to have ambitions that are relevant to consumers including, in the case of chocolate, the best ingredients.
The owners have knowledge of where to get the best beans (Ghana), almonds (California), and hazelnuts (Turkey) and when prices go up you don't compromise.
"That's the discipline then, when the price of hazelnuts goes through roof and accountants say reduce, you ask ‘is that consonant with the vision of the company - and don't do it'.
Nuttall said asking why you are in business is important, but in his company's case, customers needed more.
"The ‘why' is important but we have to explain the ‘what' and the ‘how' because people didn't believe us. It's about marginal revenue. We have to explain the mechanism.
"It's hard yards to do that, to focus solely online and know a third of the market potentially won't use you because they want to buy a ticket physically or want to phone.
"We said if you don't fit in our business model, we don't want you as customers, because you are actually going to make it too expensive for everybody to do business with us."
That approach even goes to
charging for calls to a 0900 number.
"It eliminates all the tyre kickers," Nuttall said.
"We see every customer interaction, count them and try and get it down. Every time they contact us they've failed to understand the product because we haven't explained it properly to them."
The name, Nakedbus, backs that up, suggesting the costs of travel are being stripped away, he said.
As with its inspiration, Virgin, whatever you think "it's a name you remember".
Transparency within the business is also important. Nuttall said Nakedbus's financials are open to everyone in business.
"Everyone knows how many passengers we carried yesterday, last year, the target, and what they need to do to get there."
For Orcon, it's also about being a "hero" in the market.
"The big brands act as rulers in the market. Our job really is to be the hero. To be a hero you have got to have an enemy," he said.
"That's the big guys who haven't got your interests at heart. Being the consumer champion is what we are about and how we position ourselves in the market."
One change since the early days of Orcon is prices have been cut. Where smaller player have traditionally been the price leaders, that has changed, leading Orcon to focus on people who really use the internet and not only want a great deal but fewer limits.
McAlister said a story is either authentic or it's not and you prove that through delivery.
"What we say we will do, we do. We are consistently innovative and being small it's easier to be agile. That rings true with customers and staff. It's easier to tell the story when it's real.
"Understanding it's a sustainable and real story is very important."
Even then things will still go wrong, he said. The job then is to fix it as quickly as possible.
Nuttall said while the term authenticity isn't used internally, Nakedbus's transparency also leads to accountability.
Team members regularly challenge him when he comes up with a more off-the-wall ideas, saying things like "that that's not consistent with our customer charter, that's not consistent with our brand".
For Whittaker's a similar authenticity test was posed by revelations that rival Cadbury was putting palm oil in its bars, a decision since rescinded.
Whittaker's was a huge beneficiary of that, with sales increasing 35 per cent over night, Poole said.
"We wouldn't have done that because for us it's not consistent with world-class chocolate," Poole said. "It's important people in the company understand that because that's what drives your strategy though manufacturing and marketing as well."
Poole said Whittaker's does not have an ambition to be number one.
"What we do have the ambition to be is the best. If that leads us to be number one that's good."
For Orcon, being number one is about being first to market.
"That's a strong feature of Orcon brand, being first and innovative. We can do that because we are a smaller company." Internally the talk is about staying agile no matter how big the company gets.
For Nakedbus, though, being number one is important because the more people get on its buses the cheaper it gets. Being agile is vital too.
"The day we say what we did yesterday is good enough is day I'll hang up my boots," Nuttall said.
Next week: Building customer communities.
Sunday Star Times