Thank you, Steve. Good evening. I thought it might be a nice idea at least on my behalf and maybe also for the other panelists, to say how I came to this subject, because it is an odd subject. And I came at this from three streams which probably some of you could identify with. 

HOW ARE NORMS TRANSMITTED?

    I started out in life as a history professor, college-level, history of ideas, history of culture and so forth, and I would go on, and bore freshman students in World Civ. and things like that, and one day, I never studied American history, this was European or Asian history. 

    And I was astounded, because it read like Baedeker for America in 1968, the year that I read it, rather than like something written in the 1840s. And it was absolutely accurate. If any of you have read it, you’ll know what I’m talking about. It’s a complete and accurate guide to America, but it’s old. The people that de Tocqueville spoke to are no longer living, and yet, we act the same way. This book is a very good guide to what America is like. 

   So I asked myself: “How could this be?” It never occurred to me to ask: “What are the carriers of behavioral norms? What are the ways that we learn how to behave that continue through time, that continue? How does this happen?” Historians don’t really talk much about this. 

    So I began asking questions of people. I said: “Do anthropologists know about this? Do cultural historians? Who knows about this?” And I couldn’t really get very good answers. I was at a university and I would hang around other universities, and no one could say, what are the carriers of information about  behavior that people pick up, that last for a hundred years. I mean, go to Ireland or England, and maybe they last eight hundred years. With the Palestinians and the Israelis, maybe six thousand years. (Laughter)

    People seem to learn remarkable behavioral things over time. Now it does change. But it doesn’t change too much. I mean, I think that the continuity and endurance of behavioral norms and the information about them has a great deal to do with stories. I didn’t learn this till years later. That’s what I think it is. Stories from the Bible. Stories of atrocities. Stories about – a woman friend of mine was in Kosovo not so long ago, and she actually interviewed grandparents who told stories to their children, their grandchildren, about atrocities that occurred in the fourteenth century, and they raised these children from a really early age: “Think about what this other group did your ancestors!” And these stories have tremendous salience. The way Bible stories do. All sorts of stories do. So I think this is a rich subject. 

    And I thank Steve Denning for bringing this subject to me. I was interested in it, but I never really did much, till I met Steve who was much more active in studying this subject. He’ll tell you about it. And so that’s one road I came to it.

HOW DO REALLY ORGANIZATIONS WORK?

    But another road, one maybe more pertinent probably to some of your lives, and more pertinent to this discussion, is the failure of the standard model of how organizations work, to take into account how organizations really work. The stuff that’s taught in business schools, the stuff that’s taught in training and development classes in most universities and in most corporations has nothing to do with how organizations work. Or very little. Very little. It’s worse than Plato’s cave, there are not even shadows, it’s a blind. (Laughter)

     It’s a question of the correct metaphor. And among the many reasons, and I am going to talk more about this tomorrow, as I am sure other people will, among the many ways it fails, it fails to talk about how people learn how to act in organizations.  Where is the knowledge in organizations? How do you know what people know? How do you know how to behave? How do you know how to act when you enter an organization? And a great deal of that can be wrapped around and understood through stories. And so I think that’s another thing, that’s certainly more pertinent to many of our lives, this failure of the standard theory to account for a whole bunch of activities. That’s another reason to study stories.

THE ECONOMIC VALUE OF STORYTELLING

    A third one – and Steve is probably more of an anthropologist manqué and I’m more of an economist manqué - is the fact that how much of our economic activity in the United States really, and most developed nations, has to do with talking and persuasion. A number of years ago, a very well-known economist known as Deirdre McCloskey wrote an article – we were actually thinking of getting her on this panel – she wrote an article that 28% of the GNP in the United States, she did all the math, it was in the American Economic Review, so the numbers are there, is accounted for by persuasion. I mean it’s a remarkable thing, if you think about it. Law. Public relations. The ministry. Psychology. Marketing. What do you do? You persuade people. I mean, we all do a lot of this. Some people have other words for it than persuasion, which I won’t go into today. (Laughter) Be that as it may, when you try to persuade someone of something, a big piece of that is telling them stories, a huge chunk of it. So if that’s 28% of the GNP, you could make a good argument that probably at least two-thirds of that is clever storytelling. 

WHAT DO REALLY CEOS DO?

    And it was brought home to me, it’s the last point I want to make in this introduction. You know, we read about these tremendous salaries that CEOs get and many of us find it immoral and disgusting, the disparity between what they earn and what other people earn. And I never really saw an CEO in action do anything that was wildly different from what I could do or what most people could do in an organization. 

    And then I went to a meeting. I work for IBM. I went to a meeting where Lou Gerstner, the CEO of IBM went to Wall Street, and met the analysts. And lo and behold, I was asked to come to this meeting. And he’s sort an irascible guy, Gerstner, he’s not that charming, and I asked myself: “What does he do that other people don’t do?” And we go into this room and here are people, you know, the various banks, and analysts, and he started telling them stories, stories about IBM, stories about the future of IBM. And these were stories. You can’t tell them factual stuff about the future. He was telling what IBM was going to do, and it was stories. And it worked. It worked. (Laughter) And so I said to myself, “So that’s what they do!” Now I could understand what they do. 

    It must be worth a lot, because you get a “Buy” rather than a “Sell” or a “Hold” and you make some money for all the stakeholders. I don’t want to get into a discussion of the moral basis of capitalism (Laughter). You can if you like. But I could certainly start to see what some of these people are paid for.

   Jack Welch once told Chris Bartlett, the guy who teaches at Harvard and a friend of mine, that the most important attribute he had, he was a C plus student, really a second-rate student, told him, “What really counts is that I’m Irish and I know how to tell stories.” Sure enough. There’s a lot of truth to that. When you tell stories to Wall Street, it has tremendous economic implications. 

Participant: Is it useful? (Laughter)

Larry Prusak: So these are some of the roads that I took to get to this subject. And we’ll certainly talk more about it later. But I just wanted to kick off the discussion and encourage you to think about what role stories play in cultures, in organizations, in society. And I think you’ll all find, and we hope to convince you, and I happen to think that story plays a much greater role than you’d find in any text book on organizational life, in social life, and in cognitive life. So with that, I’ll turn it back to Steve.