How leaders can harness the power of stories

A well-crafted narrative does more than persuade – it shapes reality.

Manfred F. R. Kets de Vries

Last Updated: Nov 24, 2025, 17:40 IST5 min

In business, stories also provide structure, making se...

A young manager once told me about the day she nearly quit her job. A major restructuring had left her team reeling. As targets shifted overnight, colleagues departed and rumours spread faster than facts. “I felt like I was living in a storm without a compass,” she said.

Taming chaos

In business, stories also provide structure, making sense of what would otherwise feel fragmented. This ability becomes especially important when an organisation undergoes crisis or change.

For instance, in moments of transformation, such as mergers, pivots or lay-offs, employees naturally search for a storyline that explains what is happening. Leaders who supply that storyline help their teams navigate uncertainty; those who fail to do so leave people anxious, confused or disengaged.

Thus, by shaping how people interpret events, stories effectively tame chaos. They turn volatility into something people can understand and act upon. A compelling narrative does not remove the turbulence but offers people a map to move through it.

The hero’s journey

One of the most enduring frameworks for story is the hero’s journey, a pattern that has appeared across cultures for centuries. It follows a recognisable sequence. It starts with a call to adventure. The hero then crosses thresholds and experiences trials – especially setbacks. Moments of insight follow and culminate in lessons learnt.

Think of Luke Skywalker in Star Wars. He leaves the familiar world of Tatooine, endures trials that test his courage and finds guidance in mentors. Ultimately, he returns transformed and ready to lead. Audiences instinctively grasp this arc, which is why it resonates so deeply across cultures and eras.

Leaders can use this structure to frame both their own journey and the journeys of their organisations. A career pivot can be understood as the call to adventure. The fear of failure becomes the “dark night of the soul”. A breakthrough moment, whether winning back a client or completing a turnaround, marks the return with a gift of wisdom.

When narrated this way, even difficult experiences gain coherence and dignity.

Rehearse for reality

Stories also serve as a form of cognitive rehearsal. By picturing ourselves or our companies as protagonists moving through these phases, we prepare for what lies ahead. We practise responses to adversity before it arrives. This builds much needed resilience and agility.

One executive I worked with used the hero’s journey to make sense of an international assignment that had gone badly. Instead of telling himself he had failed, he reframed it as the “ordeal” stage in a larger cycle. That shift allowed him to treat the experience as a source of learning rather than shame. The new story didn’t erase the difficulties, but it gave them meaning and left him better equipped for the challenges that followed.

A senior leader preparing for a merger applied the same idea. He imagined himself not as a passive actor but as a protagonist in a transformation story – facing trials, adapting and eventually returning stronger. This mindset helped him project confidence instead of fear, and his team drew strength from his narrative.

Also Read: The power of deep leadership inquiry

Not every story heals

However, the narratives we cling to can sometimes do harm. Executives who insist on defining themselves as the lone saviour may be blind to collaboration. A company that endlessly repeats its story of past dominance may resist needed change.

Leaders need to pay attention to the stories they tell themselves. Are they fostering growth, or are they reinforcing fears and limiting possibilities? The wrong script can keep leaders trapped in roles that no longer serve them.

Organisations, too, can suffer from inherited narratives. Founding myths may become constraints rather than sources of inspiration. A consumer goods company I studied kept repeating the story of its legendary founder, a perfectionist who demanded flawless execution. While inspiring at first, this narrative eventually paralysed innovation as employees were too afraid to experiment. The very story that once fuelled success had become a barrier to adaptation.

Rewriting the script

The good news is that stories are not fixed. People and organisations can rewrite their scripts. A setback can be recast as a turning point and become a catalyst for reinvention. It can set the creative process into motion. Leaders who approach narrative consciously can fine-tune their identity, direction and purpose.

This process takes work. I recommend keeping a journal or revisiting key episodes of one’s career, alone or guided by a coach. Executives may also invite colleagues to share how they perceive their journey. Organisations can run story audits, gathering the informal tales employees tell, then shaping them into a coherent narrative that points toward the future.

By rewriting the script, leaders free themselves and their organisations from the weight of outdated identities. They create stories that encourage innovation and mobilise people in uncertain times.

Leadership as storytelling

Storytelling is not an optional skill but a central function of leadership. Leaders who understand stories as the architecture of identity – who tame chaos, draw on the hero’s journey and remain alert to harmful narratives – are better equipped to lead effectively.

Facts matter, but without the structure of story, they rarely move people. In turbulent environments, it is the leader’s ability to craft and live a compelling narrative that helps others make sense of the past, find clarity in the present and face the future with confidence.

Manfred F. R. Kets de Vries is the author of Storytelling for Leaders: Tales of Sorrow and Love.

This article is republished courtesy of INSEAD Knowledge, the portal to the latest business insights and views of The Business School of the World. Copyright INSEAD 2025

First Published: Nov 24, 2025, 17:52

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