Narrative and Numbers: The Value of Stories in Business (Columbia Business School Publishing)

by Aswath Damodaran

If numbers are dangerous because they come with the illusions of control, precision, and objectivity and can be easily imitated, how will adding stories to numbers reduce those problems? First, the nature of stories is that they are fuzzy and remind us that precise as the numbers look, changing your story will change the numbers. Second, that recognition also will dispel the notion that you somehow can deliver the numbers you have forecast, since stories can be changed by forces out of your control. Third, when you are forced to unveil the story that backs your numbers, your biases are visible not just to the rest of the world but to yourself. I also believe that the capacity to combine stories with numbers makes it more difficult for others to imitate you, if you are successful. Unlike models that can be easily copied, storytelling is more nuanced, personal, and difficult to replicate.