In early 2009, two men set off on a mission around the thrift stores and flea markets of New York City. They acquired 100 pieces of what might best be described as junk for an average price of just $1.29. None of these products had any value whatsoever. By November that same year, they had succeeded in selling each one of these items on eBay for a total price of $3,612.51.
What could they possibly do with those worthless trinkets whose marketing value soared by 2,799%?
The answer is storytelling.
This was a literary and anthropological experiment conducted by researchers Rob Walker and Joshua Glenn called “Significant Objects”. They listed these insignificant objects on eBay with heartfelt, well-written and purposeful short stories in the description section. The hypothesis was that stories drive emotional value and have the power to transform insignificant objects into significant ones.
This experiment is excellent proof that, as humans, we are drawn to and connected with stories. Data and statistics, not so much.
In her presentation The Art of Effective Storytelling, Michele Miller asserts, “Humans are not hardwired to understand the logic and remember facts for long. But we understand and remember stories”.
Why do family businesses need storytelling now, more than ever?
For many decades family businesses were the sole beneficiaries of favourable global economics. But with the rise of multinational companies and global supply chains in the last 30 years, this remarkable era is shaken, if not drawn to a close.
Now there are twice as many multinational corporations as in 1990, and the changing environment poses both opportunities and challenges to a family business model.
The truth is, family businesses still stand at par as they deliver returns on assets that are comparable to or even higher than the multinational companies. But as family businesses are passed on from one generation to another, barriers to entrepreneurship and innovation creep in. A study by Harvard Business Review states that some 70% of family-owned businesses fail or are sold before the second generation gets a chance to take over, and 10% remain active for the third generation to lead.
Storytelling is one of the most effective tools for instilling a sense of pride and responsibility in the next generation. By telling the story of the business creation, the founder’s vision and the values demonstrated in sustaining the business, families may preserve the same heritage for many years to come.
Storytelling to introduce the founder and their legacy
The family business possesses folklore of the company’s founding. This is quite different from the corporate picture, where businesses start from heavy investments and multiple funding rounds. The inception of a family business is relatable and has an entrepreneurial edge that people may learn from and connect to.
Lego is a much-loved brand by children and adults alike. It was founded in 1930 by carpenter Ole Kirk Christiansen. As the economic crisis hit the small Danish town, he lost his customers, forcing him to shut down his small workshop. This misfortune coincided with the death of his wife, leaving him not only unemployed but also alone with four children. Ole made toys out of scraps of wood to make ends meet, but no one believed in his venture.
Slowly, his wooden toy business gained momentum as the word got about his quality. The Lego Group is currently the world's largest toy company by revenue, with annual sales amounting to US$2.1 billion. It is still a family business run by Ole’s great-grandson Thomas Kirk Kristiansen. The company never forgets their humble beginnings and continues to utilise its founding story as the cornerstone of its marketing strategy.
The founder’s story has a lasting value because it begins with a strong purpose and transforms into core principles that continue to resonate with the business and its customers over the years. At the end of the day, people want to buy from people, and they empathise with the star who worked hard to build an empire.
Storytelling to share the success and struggles
Family businesses have their unique struggles and challenges, just like the non-family business counterparts. It may be innovation, investments, ownership, stakeholder relationships, power dynamics, financial stability and economic crises. A business that has soared and survived through tribulations must share both their prizing traditions and persevering stories.
Little Debbie is a famous name in American households. But their story goes back to the great depression when O.D. and Ruth McKee sold five-cent cakes out of the family car. In 1934, they bought a small failing bakery by using the family car as collateral. After facing much adversity, their determination paid off in 1960 when they began selling the first family pack of baked goods. It was named after their four-year-old granddaughter Debbie whose photo in play clothes and her favourite straw hat became the brand logo. The fourth generation of McKee’s now runs the company that is worth an estimated $1.4 billion. Debbie Mckee Fowler currently serves as Executive Vice-President on the McKee Foods board of directors.
Stories of family businesses are like legacies speaking of strong resilience and determination. True stories of survival amid obstacles resonate with the everyday person. Hidden lessons in a business’s story become relatable, which further fuels the affection and loyalty towards such brands.
Storytelling to attract the right talent
Family businesses often carry tales of meaningful relationships with their employees. They tend to value, protect and develop their employees more vehemently than other corporate firms. Legacy businesses have instances of making exceptions for their employees, such as providing days off for personal reasons.
When a family runs the business, their desire to stay profitable and stable for future generations is usually strong, attracting people looking for a safe and secure job. Therefore, showcasing benefits and sharing inspiring stories about the workplace culture will attract better talent.
A recent example has been set by Indian industrialist Ratan Tata, who heads a business group known for exemplary employee support. During the second wave of Covid-19, Tata Steel released a statement mentioning that their best-in-class social security schemes will help ensure an honourable standard of living for the affected families. The company will continue to pay the last drawn monthly salary of the deceased employees to their family until 60 years of age, as well as medical benefits and housing facilities. Moreover, the company will bear the school and college expenses of the children of all their frontline employees who met with an unfortunate death during COVID-19 duty. The company continued its old values of supporting all its stakeholders in the recent crisis as well.
Family businesses that treat their workers as an extension of the family reinforce their trust and motivate them to work towards the common goal. In a global economy that seems to shift from crisis to crisis and is centred on increasing turnovers, it is refreshing to read stories of family businesses that treasure their employees.
Storytelling to share business ethics and values
Values are the essence of family businesses. They ultimately drive what happens in both the family and business. Customers, employees and partners look up to value-based leadership driven by a conscious mission, purpose, social responsibility and impact beyond profit. This makes it even more crucial for a family business to consistently share its brand stories, acting as a powerful rudder in its processes.
In the fast-food industry, Chick-fil-A is known as a bird of a different feather. Their values are an integral part of their business and are revered by each team member – from corporate leaders to frontline employees. Chick-fil-A has a conscious culture rooted in family values with a “servant leadership” mindset, where the employees treat customers as they would like to be treated if they were in the customers’ shoes.
The employees represent the business values across every touchpoint, such as how they recruit talent, how they engage with customers, or how they follow up with unhappy customers. In other words, they take their commitment seriously. A crucial factor of Chick-fil-A’s success is they do not offer franchises unless all their standards are adhered to. For the last six years, the company has continuously been rated America’s most beloved fast-food restaurant in the American Customer Satisfaction Index's annual survey.
Well-articulated stories of values that are lived out across all touchpoints, internally and externally, leave a lasting impact. Being vocal about brand values will impact customers’ perceptions, attract customers who share the same beliefs, and foster deeper sustained loyalty.
Storytelling to display sustainable innovation
Family firms are typically viewed as risk-averse, traditional and stagnant. People fail to see that many family businesses thrive across generations when they keep innovation at the core of their culture. This helps them to seize new opportunities and keep up with the fast-changing world. The most successful family businesses are willing to move away from traditional markets without losing their values to identify fresh ideas and then capitalise on the unseen gaps in the market.
Zegna, a luxury fashion company, is one of the largest, most dynamic Italian family businesses. The beginnings of the Zegna Group trace far back to the birth of Angelo Zegna in 1859 as the fourth child of a farmer. Angelo first worked as a watchmaker, then as a weaver, and started a textile manufacturing plant with around 15 looms.
After Angelo passed away, his son Ermenegildo emerged as the next leader of the family business. While working alongside his father, he travelled and studied the vastly superior English manufacturing processes. In order to adapt their manufacturing process, he imported English spinning machines to produce high-quality textiles.
Ermenegildo Zegna's sons Aldo and Angelo joined their father's business and observed that the traditional clients were gradually disappearing. They altered the business by making ready-made suits on an industrial basis. Convinced of their successful business model in Italy, the two brothers started looking for markets outside Italy as an expansion. The company’s fourth-generation, Aldo and Angelo's sons, have contributed by opening dozens of new retail stores worldwide.
The new generation is well-informed about the technology developments and customer demands. They must consider storytelling to break stereotypes and share their journey with their customers.
Takeaway
A family business must be viewed beyond balance sheets and key performance indicators. It is often a legacy of the customer's journey with a family brand for generations. Most close-knit family businesses have the ingredients needed to retain an entrepreneurial edge. They present unmatched credibility, extensive understanding of the business and long-term perspective. This kind of brand positioning is often absent in most broadly held companies. To seize the opportunity, they must recognise and build on their unique strengths and efficiently communicate their history and ethics. Tapping the inherent strengths of storytelling may harness and retain the trust and commitment of consumers.
