The Silicon Valley Bank collapse: A failure to control the narrative
In March 2023, practically overnight, Silicon Valley Bank (SVB) went from being a trusted institution in the tech finance world to a sobering cautionary tale. What had begun as a liquidity issue quickly spiraled into a full-blown crisis, driven by poor communication and the lack of a narrative strategy. SVB’s rapid downfall highlighted how public perception can unravel in a matter of days when mismanaged. SVB’s failure to control the narrative in the face of a financial storm led to the rapid erosion of trust — and the company’s downfall.
In today’s hyper-connected world, where public perception moves at lightning speed, businesses cannot afford narrative missteps. SVB’s collapse showcases why a strategic narrative — an intentional, structured communication of a company’s purpose, values, and vision — is crucial for maintaining stakeholder trust, especially during crises.
What is a narrative strategy?
At its core, a narrative strategy is more than just storytelling. It’s the ongoing story that a business tells to align its mission, vision, and values with its stakeholders’ expectations. Narratives build emotional connections, foster loyalty, and drive trust, but more importantly, they manage reputation over time.
A solid narrative map or framework guides how customers, employees, and investors perceive a business. As a strategic tool, a strong narrative provides a crucial competitive edge in an increasingly volatile market. It allows businesses to control the narrative in a world where perception often outpaces reality. It ensures companies take a proactive role in shaping how they’re seen, rather than just reacting.
Reputation: The foundation of trust
Reputation is everything in business. As Frank Wolf emphasizes in his book, The Narrative Age, it’s a quality that cannot be faked. Companies must earn a strong reputation through consistent, responsible actions and clear communication.
Businesses with a solid reputation are all the more likely to weather crises. Why? Because they’ve built up what The Narrative Age calls “reputational capital.” This reservoir of trust is what allows stakeholders to give a company the benefit of the doubt in difficult times.
In contrast, companies with fragile reputations can collapse quickly when public trust erodes, as the world saw with SVB. Managing reputation proactively, in part by measuring the effectiveness of your strategic narratives, is therefore essential to ensuring business resilience, growth, and long-term success.
To control the narrative and manage reputation effectively, businesses must examine how they perform across multiple dimensions. All of these dimensions can be controlled through a strong strategic narrative.
The 6 dimensions of reputation: Building trust from all angles
A North Star narrative serves as a guiding compass for businesses, helping them remain consistent and focused on their long-term mission. It ensures that all decisions, from product development to crisis communication, align with the company’s core values and vision. By embedding a clear North Star narrative, companies like Apple and Patagonia ensure that their actions resonate with their stakeholders. A North Star narrative helps companies to control the narrative, reinforcing trust and fostering resilience through challenges.
Beyond the North Star narrative, the overall reputation of an organization can be broken down into sub-areas. One of the best-known models is the Reputation Quotient model, first published by Charles Fombrun and colleagues in 1999. It has been widely adopted by businesses and academics for reputation assessment, and is based on six dimensions which are the building blocks of a company’s reputation.
Emotional appeal
Trust and likability are central to any brand. Apple doesn’t just sell technology; it sells a vision of innovation that resonates emotionally with its customers.
Products and services
Quality products only take you so far. A compelling narrative turns features into a constellation of stories. Netflix isn’t just streaming — it’s delivering entertainment as a global movement, allowing users to shape their own viewing experience.
Vision and leadership
Inspirational leadership can make or break a company’s future. Steve Jobs’ vision for Apple wasn’t just about technology — it was about reshaping the way people interact with the world. His narrative of innovation, simplicity, and user-centric design transformed Apple into a cultural icon, positioning Jobs as a symbol of creativity and forward-thinking leadership.
Workplace environment
Internal narratives play a significant role in how employees perceive their workplace. Companies like Patagonia have built narratives around social responsibility and sustainable business practices, making them extremely desirable employers.
Financial performance
A company’s narrative can reassure investors about long-term stability. A well-articulated vision like that of Amazon — focusing on long-term growth over short-term profits — helps attract patient investors who believe in the company’s overarching story.
Social responsibility
Today’s consumers expect businesses to play a positive role in society. The ongoing commitment of Patagonia and its founder Yvon Chouinard to environmental activism is more than just good marketing — it’s a narrative deeply integrated into its brand, resonating with consumers who value ethical consumption.
Building a narrative moat: 5 ways a narrative strategy provides a competitive advantage
Crafting a narrative strategy is more than telling a company’s story; it creates what can be described as a narrative moat — a strong, defensible framework that shields a business from competitors and market volatility. A well-established narrative allows a business to shape public perception, drive stakeholder engagement, and foster trust.
Here’s how strategic narratives help build this protective moat:
1. Increasing perceived value for customers
A product is only as valuable as the story that surrounds it. A compelling narrative turns a simple product into something that represents a larger idea or purpose.
Take Apple, for instance. Through its narrative of cutting-edge design and seamless user experience, Apple transformed the iPhone from a communication device into a symbol of innovation and creativity.
Customers don’t just buy Apple products for their features. They buy into the lifestyle, prestige, and vision that Apple’s brand represents. This kind of narrative enhances perceived value, allowing businesses to stand out in crowded markets and command higher customer loyalty.
2. Building a distinctive employer brand
In today’s competitive talent market, businesses need to offer more than just a paycheck. They need to present a narrative that resonates with employees on a deeper level, one that reflects their values and aspirations.
Patagonia excels at this. Its narrative of environmental activism and work-life balance has made it a highly desirable employer for mission-driven talent. Employees are drawn to the company not just for the work but because they want to be part of a larger movement to protect the planet.
This distinct internal narrative helps Patagonia attract and retain top talent who are committed to the brand’s broader purpose. This narrative gives the company a clear competitive edge in the hiring landscape.
3. Convincing shareholders to invest
Investors aren’t just looking for short-term gains; they want to see a vision of long-term growth and stability. Strategic narratives that emphasize leadership, innovation, and a clear path forward inspire confidence in investors.
Amazon, for example, has long controlled its narrative by prioritizing long-term growth over short-term profitability. By clearly communicating this strategy, Amazon reassures investors that it is focused on expanding its global presence and maintaining dominance in the e-commerce space.
This narrative gives shareholders a reason to invest in the company’s future, seeing beyond quarterly earnings to the bigger picture of sustained success.
4. Obtaining the license to operate
In industries that face heavy regulation or scrutiny, a strong narrative around social responsibility is not just beneficial — it’s essential.
Unilever has built its entire business narrative around sustainability and ethical business practices. The company aligns itself with global movements toward environmental conservation and social justice. This has earned Unilever the trust of regulators, governments, and the general public. This trust makes it easier for the company to expand operations and innovate without facing major opposition.
For businesses operating in highly regulated environments, a narrative that emphasizes responsibility and ethics can ensure smooth operations and the goodwill of stakeholders.
5. Showing bold internal and external leadership
Leadership narratives are crucial for inspiring both internal teams and external stakeholders. Companies that effectively communicate their leadership’s vision, like Salesforce under the guidance of Marc Benioff, can unite their workforce and inspire confidence in their customers and partners.
Salesforce has built its narrative around the idea of purpose-driven growth, advocating for social issues like equality and sustainability while maintaining a leading position in the tech industry. This leadership narrative motivates internal teams to align with the company’s vision. Externally, it strengthens Salesforce’s brand image in the marketplace as a socially responsible and forward-thinking organization.
Together, these five strategic narratives form a robust competitive moat that strengthens a business by building trust, differentiating it from competitors, and fostering long-term resilience.
Whether it’s enhancing the perceived value for customers, attracting mission-driven talent, securing long-term investor confidence, maintaining regulatory goodwill, or inspiring through bold leadership, each narrative reinforces the company’s position in the market. This makes it harder for competitors to penetrate and ensures that the business will thrive in an increasingly complex and competitive environment.
Conclusion: A narrative strategy protects business reputation
Reputation is an asset businesses can take for granted at their own peril. In an era where public perception can shift overnight, a narrative strategy serves as the foundation for building, managing, and protecting that reputation.
From SVB’s collapse to Apple’s unprecedented dominance, it’s clear that businesses that invest in proactive measures to build and control the narrative don’t just survive — they thrive. Whether it’s enhancing customer loyalty, shaping an employer brand, or attracting long-term investment, the right narrative helps businesses define their value, differentiate themselves from competitors, and weather inevitable crises with their reputation solidly intact.