No one can deny the value of a well constructed and well communicated narrative. There was a fab New York Times article about Larry Page this weekend that will continue to define how we feel about the business of Alphabet. In that article we get a sense for the strategic narrative that will define, in our minds, the next few years of business moves Alphabet makes. We rally round companies that tell compelling stories about themselves.
Strategic narratives, stories in a business context, are a way to create a shared understanding of the past, an understanding of the work in the present and projections for the future state. We have examples of where this works; Alphabet/Google's is organizing the world's information and employees know where they fit in that future, SpaceX is working on transport to other planets for all of us and that keeps employees clear about their future aspirations. We also have examples of when a narrative is absent; Yahoo lost its narrative and its mojo because its leaders did not redefine the narrative as the world changed around the company (and the ensuing employee exodus is inevitable).
For customers we can reverse engineer into what strategic narrative a company has when you see it take an action e.g Google becoming Alphabet (a holding company) or GE divesting its financial businesses (because it's strategic strength is industry not finance). And a lot of companies succeed even without having compelling narratives; these companies just don't become global behemoths.
But we have exceptions. The biggest company without a narrative right now is Apple.
Think about it, what is Apple's narrative? What is the 'Why'? See, a company narrative helps define where it's going or why it's doing what it's doing. I strongly believe consumers buy the 'why'. When you don't know the 'why' what are you buying? Do I have a problem with Apple? Apart from Tim Cook's ill-fitting suit for his meeting with the Italian prime minister (I joke, I joke)? There are too many Apple products in my home to suggest I have a problem with Apple. But 'why' would I buy another IPhone? Or why is my wife, and other friends, thinking it might be time to switch from Apple? These questions lie at the core of my worries about Apple. Yahoo
There was a time when Yahoo was the 'frontpage of the web' and no one thought they would be, essentially, a holding company for Alibaba shares. To keep us buying IPhones and watches the company will soon need to give us a more compelling reason why... Or else this story will get uglier.