Why Narrative Control Can Make or Break a Company
Greetings, Chief Storytelling Officers.
The plan for this week was to cover some tactical thoughts on fundraising based on a post that went crazy two weeks. For now that will have to wait until next week.
This week we saw chaos unfold as SVB collapsed. For any founders impacted, this sucks. I know this is unimaginable.
While nothing I say can make any of this easier to deal with, I do want to spend today's newsletter diving into Narrative Control. This week showed why it's so powerful and why not understanding it can cause massive failure.
Let's dive in.
DEEP DIVE: Narrative Control
My senior year of college I had to write an 80 page senior thesis. As a history major at a small liberal arts college (Haverford College), most students took the route of writing a thesis that lined up with one of the professor's areas of expertise.
I did not. I wanted to study something completely different. Something that to this day shapes the way I think and see the world.
For years I'd been fascinated by the idea of narrative control and I wanted to spend my senior year studying how it worked. I started writing it in 2009 and saw how Obama had used narrative control but there was a more interesting phenomenon that I'd picked up on.
A powerful opposition to Obama had risen up shortly after his election and there was an interesting figure named Jerry Falwell Jr who had become a major player in the religious right seemingly out of nowhere. I knew the name because of his father. As a kid who grew up in Houston and went to Catholic high school, I knew the major players in the evangelical world. But I wanted to see how the next decade would play out and as a history major that meant looking to the past to understand what came next.
I dug into the 1970s and 1980s when Jerry Falwell Sr had orchestrated one of the most influential political moves in United States History. The man had turned the evangelical christian community into a political force. First by backing the devout Democrat in Jimmy Carter but four years later betraying him to send hollywood actor and Republican Ronald Reagan to the White House.
I'd found my senior thesis.
The Rise of the Religious Right: From Jimmy Carter to Ronald Regan.
When I took the thesis idea to the history department they questioned me on it because no professor would be able to help me. I didn't care and told them I'd figure it out on my own. This was too important to understand and it would be worth the year long investment to learn all about it.
What fascinated me is why had a religious organization abandoned the most religious politician in history to kick him out of the White House for a slick hollywood actor.
For my entire senior year I studied speeches, newspapers, magazines, tv appearances, and anything I could get my hands on to understand how this had happened.
The short answer is narrative control. Falwell Sr was a skilled operator who knew exactly how to spread a message. Long before our current age when people understand that distribution is everything, Falwell was already thinking that way. He knew that in order to have the type of power he wanted in deciding the direction of the country, he needed a large audience behind him to scare the politicians into submission.
So he used rhetoric and oratory to the millions of evangelicals who followed him. He built alliances with other religious leaders to help spread the narrative that Jimmy Carter had betrayed them and their savior was in Ronald Reagan. He used narrative control to shape the issue of voting into one of a religious imperative.
But the biggest piece of narrative control that Falwell Sr pulled off is convincing a religious community that they should focus on issues instead of the person.
It worked as the entire organization shifted into the conservative powerhouse that Republicans have come to rely on for decades.
Reagan rode the wave into office and Carter was defeated after one term.
Something similar played out in 2016 when Falwell Jr. was a key part of Trump's campaign.
All of this brings me to what happened this week.
The SVB Debacle
SVB made fatal error after fatal error. In fact, if a bank tried a hypothetical exercise to build a communication strategy that WOULD create a bank run, I don't think they could have come up with as perfect of a storm as what we saw with SVB.
They messed up initial messaging. They messed up timing. They messed up secondary messaging and so much more. It was hard to watch because that communication team absolutely blew it.
Which sucks because even though they'd made poor decisions on an investing side, the bank run did not need to happen.
But once panic sets in, game over.
I dove in once I saw people start talking about SVB in communities I'm a part of as well as the noise on Twitter starting on the morning of March 9.
Problem 1: The initial press release from SVB spoke to the wrong audience. They wanted to make sure investors didn't get scared when they decided to raise new capital. For a publicly traded company this makes sense but SVB is not a normal publicly traded company.
They're a bank and had done nothing to contextualize what was going on inside of the bank to ease concerns of their customers. They'd failed narrative control 101. If you don't control the narrative, someone else will do it for you.
That's what happened on twitter. When I wrote my thesis on Falwell Sr, he couldn't have dreamed of a tool like twitter. But now, twitter led to the downfall of SVB.
Problem 2: The timing of the press release came shortly after Silvergate Bank decided to shut down. Narrative Control takes into account when to disclose something. SVB chose the absolute worst time as panic was already in the air around one bank collapse.
My favorite show of all time is the West Wing. There's an idea in the show called "Take out the trash". It's when the politicians will give all the bad news when nobody is paying attention or cares.
SVB failed to chose their time. Timing matters. Any founder knows that, yet somehow SVB forgot it.
Problem 3: SVB went silent and then made the worst mistake of all, "just stay calm". In times of uncertainty leaders need to step in and ease those concerns by shaping the narrative. There were ways to do this even in this situation that as I watched it unfold, I couldn't believe they weren't taking action.
Twitter became the narrative. SVB sat silent. That's a failure of leadership. Not only that, to then follow up the silence with just stay calm is a rookie mistake and hard to understand from a CEO of this size of company.
I don't know if it was bad advice or something else but I can tell you that any crisis communications expert would have navigated this situation entirely different.
There's so much more I could break down here but instead I'd rather leave you with something to takeaway from all of this.
Tough times happen and it's your job as the leader to stand strong in the face of the storm. It can't cause you to panic or freak out. You must step up and lead from the front.
Narrative Control is something very few founders ever think about until it's too late. It's a skill that can be built over time by understanding the past, studying other examples, practicing frame control, learning how to create presence, and other pieces of the communication skill set.
The next few years just became harder for every founder, startup, and tech company. There will be more of these moments. Some of them will be yours directly and if you fail to prepare, the results won't be pretty.
While this weekend has been dark, I believe there are better days ahead of us. I'm reminded of the quote from The Dark Knight.
"The night is darkest just before the dawn."
Here's to the dawn.
RESOURCES for Founders and Storytellers
If you want to learn more about the Falwells, here's an article from Vanity Fair on their rise and fall over the decades.
For a deeper dive into the mistakes SVB made from a communications perspective, this tweet thread does a great job from Lulu Meservey.
Good luck dealing with the chaos. We will all make it through this and keep building.