Stories and Feelings: Powerful Tools for Creative Thinking
By Shlomo Maital
My last blog was posted nearly two months ago, on March 30. Shortly after, I left for China, for teaching and lecturing. WordPress was not accessible in China. Then, on returning home, I somehow found it hard to restart the blog machine. I deeply regret this, because knowing I have blog readers keeps my eyes and ears open for ideas…. So, this is a ‘restart’, hopefully with no more long regrettable silences…
Nobel Laureate in Economics Robert Shiller (Yale) wrote a wonderful piece in the New York Times, Jan 22, 2016, “How stories drive the stock market”. Shiller is the author of a fine book, Finance and the Good Society, about how finance could be (but alas, sometimes is not) part of the solution, not part of the problem.
In his NYT piece, Shiller refers to psychologist Jerome Bruner, who showed how popular narratives (human interest stories) are “fundamental drivers of motivation”.
Shiller discusses the sharp decline in the U.S. stock market since early January, and describes the ‘stories’ that explain it. First, the slowdown in the Chinese economy – “gross exaggeration” of its importance for the U.S. Second story: “record for poor performance of the stock market in the first week of the year”… Third story: low oil prices. Fourth: tripling of the US stock market from 2009-14, and its “unwinding this year”. Many missed the big tripling, owing to pessimism and fear after the 2008 crash. This created heightened sensibility about a possible fall, after such a surprising precipitous rise.
Shiller cites a fine book by fellow Yale professor Ransay MacMullen, Feelings in History: Ancient and Modern, (2003), in which he writes, “History is feeling. It is feelings that make us do what we do. And feelings can in fact be read. But the reading of them requires writers and readers to join their minds in ways that have long been out of fashion among students of history”.
History, financial markets, consumer spending, virtually everything in our economy is driven by feelings. And feelings are evoked by stories about people, challenges, conflicts, crises and how they deal with them.
Conclusion? When you invest, try to analyze the prevailing ‘narrative’ or story that is driving human behavior, including the emotions underlying it. Is it valid? Is it evidence-based? Or is it superstition and empty guesswork? If the narrative is groundless, sooner or later (it might well be much later!), the story will change and reverse. Consider a contrarian (buy when everyone is selling) strategy.
What is the TRUE story? The real narrative? How do you know? What stories are people telling themselves?
In your startup business – what is YOUR underlying story, the story about how you create value for your clients? Is it powerful? What emotion does it evoke?
Feelings drive behavior. If you’re investing, a buyer, analyze which feelings are at work, and why, by identifying the dominant stories. If you’re an entrepreneur, a seller, shape your stories, by identifying clearly the motion you want to create with your innovation, then build everything you do around it, with a powerful narrative.