Humans are story-telling creatures; stories resonate with us, they guide and influence us, they inform us as to our identity and purpose. They are especially good at bringing us together, which makes it ironic that we do such a poor job of using them in our organizations.
Why do we need stories? Because when it comes to conveying what is important to and desired by an organization they are better than mission statements, employee handbooks, presentation decks, or any of the other devices companies and HR departments typically use.
I still remember an old story about Nordstrom, often repeated in business and management books throughout the 90's. You may have heard of it; an old lady brings in a tire, wanting to return it. Of course, Nordstrom doesn't sell tires. What does the sales cashier do? Without blinking an eye, he happily processes the return, satisfying the customer once again with Nordstrom's impeccable service! Whether this story is true or not, it very clearly imparts the standard of service desired by Nordstrom.
This is significant because such standards or expectations are remarkably difficult to convey. In any business, we often feel conflicted or unsure of what to do (i.e. what our boss would like us to do). Should we put our foot down? Should we demand a receipt? Is it better to make the customer happy, or is it better to prevent the company from losing money? We are keenly aware of the merits of both sides, and it can be very difficult to know which is the course the organization would like us to take. If we want people to be confident in their own judgement, it helps immensely to have stories to refer and compare to.
Has someone done something particularly noteworthy or impressive lately? Make a story out of it and spread it. Learn an important lesson? Make a story out of it and spread it. Are employees not engaged? Maybe the problem is that your organization doesn't have any interesting or exciting stories to tell. Are you not exhibiting the values you want to embody? Perhaps you have no good stories that embody your values--and nobody is talking about them. Want to successfully lead? Learn to tell a good story.