Leadership that creates a narrative first and then seeks data to support it pays a significant price: the loss of credibility and buy-in from those who follow them. This approach not only leads to flawed decision-making but erodes the foundation of trust that effective leadership depends on. When leaders prioritize preconceived stories over actual data, they set their organization on a path toward failure—damaging relationships with employees, stakeholders, and even consumers.
The Dangers of Building the Story First
Leaders who shape their narrative first, and then selectively gather data to validate it, risk losing touch with reality. Take the recent discussions around capping food prices to stop supposed price gouging in companies like Hershey, General Mills, and Kraft Heinz. Leadership focusing on the notion that these companies inflated profits by unfairly raising prices creates a false story. As a result, they look for any data that supports this predetermined narrative while ignoring the actual dynamics at play: profits were primarily driven by increased product volume, not price hikes.
When leadership frames their decisions around a story instead of factual insights, they create a fragile foundation for their strategies, which can quickly crumble. Here’s why:
1. Loss of Credibility
- Flawed Assumptions: When leadership presents a flawed narrative, such as claiming price gouging is driving profit growth, they risk being exposed when the true facts come to light. For example, the surge in demand for food products during the pandemic wasn’t about unfair price hikes; it was about companies responding to a significant increase in consumer demand by selling more products. Leadership that ignores these realities for the sake of sticking to their story undermines their own credibility. Once it becomes clear that their narrative doesn’t align with reality, followers—whether employees, customers, or investors—begin to question their judgment.
- Damage to Reputation: Just as in the case of food companies’ growth through operational efficiencies and volume increases, leaders who choose to overlook the facts to fit a preconceived story will find their reputations damaged when the truth emerges. Stakeholders lose trust in leaders who consistently misinterpret data to suit their needs.
2. Erosion of Trust Among Followers
- Demotivating Employees: Employees look to leadership for direction, clarity, and honest communication. When they see leaders twisting data to fit a narrative, it demoralizes those who are data-driven and committed to factual decision-making. In a company like Hershey, for example, where growth was driven by responding to real consumer behavior and efficient operations, any manipulation of the facts would likely create disillusionment among teams working hard to deliver those results. People want to follow leaders who respect the facts, not those who cherry-pick information to support a flawed agenda.
- Loss of Buy-in: The long-term success of any organization depends on the commitment of those who follow its leaders. When leadership relies on predetermined stories, followers can sense that they’re being asked to buy into a false narrative. This disconnect leads to disengagement and a loss of motivation, as employees realize that their contributions are secondary to maintaining a fictional storyline.
3. Misalignment Between Strategy and Reality
- Wrong Decisions, Wrong Outcomes: Building a strategy on a preconceived story leads to decisions that don’t align with the real market conditions. For instance, if leadership assumes that capping food prices is the solution to inflated profits, they’re missing the fact that the real driver of growth is product volume and operational efficiency. This disconnect results in misguided strategies that ultimately harm the organization. Companies like General Mills and Kraft Heinz saw growth through cost-cutting measures, efficiency improvements, and innovation—not through price gouging. Leaders who base decisions on inaccurate stories will direct resources in the wrong areas and lose out on real opportunities.
- Failure to Adapt: Leadership that sticks to a predetermined narrative becomes inflexible, resistant to adapting to new data or changes in the market. In contrast, successful companies thrive by responding to real-time information. Hershey, for example, recognized consumer demand for comfort foods during the pandemic and responded by increasing production, which led to growth. Leaders who ignore actual market signals, instead sticking to their story, will lead their organizations down the wrong path, becoming unable to adapt to changing conditions.
4. Undermining a Culture of Accountability
- Encouraging Groupthink: When leaders push a predetermined story, it stifles critical thinking and open discussion. Employees feel pressured to align with the leadership’s narrative rather than voice concerns or present data that contradicts it. This leads to groupthink, where dissenting voices are silenced, and the organization operates under a false consensus. Over time, this can lead to stagnation, as innovative ideas and alternative perspectives are shut out in favor of maintaining the status quo.
- Weakening Data-Driven Culture: In companies like Hershey, General Mills, and Kraft Heinz, success was driven by understanding consumer trends, managing costs, and making data-driven decisions. Leadership that undermines this culture by prioritizing narrative over data sends a message that facts are irrelevant. This can have a ripple effect throughout the organization, where departments start following suit, making decisions based on assumptions rather than hard evidence. Ultimately, the organization becomes less competitive as it loses its grounding in reality.
5. Negative Impact on Consumers
- Flawed Policies Hurt Consumers: In the context of the current discussions on capping food prices, leadership that pushes this narrative risks harming consumers rather than helping them. The assumption is that price caps will prevent companies from unfairly raising prices, but the reality is that these companies were not gouging consumers in the first place. By capping prices, leadership might inadvertently stifle innovation, reduce investment in supply chains, and cause shortages. In trying to solve a problem that doesn’t exist, leaders will create new issues that directly affect consumers, such as less variety and lower-quality products.
- Unintended Consequences: The example of Kraft Heinz and General Mills shows that price controls could hinder companies’ ability to invest in operational efficiencies or product innovation. This would reduce competition, limit choices, and ultimately hurt consumers. When leadership builds a story based on the wrong assumptions, they risk unintended consequences that undermine their mission and negatively impact the people they aim to serve.
Conclusion: Building on Facts, Not Fiction
When leadership makes decisions based on predetermined stories rather than actual data, they pay a significant price in the form of lost credibility, eroded trust, and misaligned strategies. In the case of capping food prices, the assumption that companies like Hershey, General Mills, and Kraft Heinz have inflated profits through price gouging is simply not supported by the facts. Their growth came from increasing product volume and improving efficiency, not from raising prices.
Leaders who insist on sticking to their narrative rather than facing the real data will ultimately fail, not only in terms of strategy but also in maintaining the trust and engagement of their followers. To avoid these pitfalls, leadership must prioritize truth, embrace transparency, and build strategies grounded in data-driven insights. Only then can they lead their organizations with integrity and achieve meaningful, sustainable success.
