A young manager told me about the day she nearly quit her job. A major restructuring had left her team reeling. As targets shifted overnight, colleagues departed and rumors spread faster than facts. “I felt like I was living in a storm without a compass,” she said.

What changed her mind wasn’t a new strategy document or a revised set of KPIs. It was a story. Her CEO gathered the organization and described the firm’s history of surviving upheavals, linking today’s challenges to a longer arc of resilience and renewal. For the first time in months, people could see themselves as part of something bigger. “I didn’t just understand the plan,” the manager said. “After listening to what he had to say, I was committed.”

Stories do that. They transmit values and help us build meaning. They’re not simply about informing but about moving people. And in doing so, they influence the way we see ourselves, each other, and the organization.

Taming chaos

In business, stories also provide structure, making sense of what would otherwise feel fragmented. This ability becomes especially important when an organization undergoes crisis or change.

For instance, in moments of transformation, such as mergers, pivots, or layoffs, employees naturally search for a storyline that explains what’s happening. Leaders who supply that story line help their teams navigate uncertainty; those who fail to do so leave people anxious, confused, or disengaged.

Thus, by shaping how people interpret events, stories effectively tame chaos. They turn volatility into something people can understand and act on. A compelling narrative doesn’t remove the turbulence but offers people a map to move through it.

The hero’s journey

One of the most enduring frameworks for a story is the hero’s journey, a pattern that has appeared across cultures for centuries. It follows a recognizable sequence. It starts with a call to adventure. The hero then crosses thresholds and experiences trials—especially setbacks. Moments of insight follow and culminate in lessons learned.

Think of Luke Skywalker in Star Wars. He leaves the familiar world of Tatooine, endures trials that test his courage, and finds guidance in mentors. Ultimately, he returns transformed and ready to lead. Audiences instinctively grasp this arc, which is why it resonates so deeply across cultures and eras.

Leaders can use this structure to frame both their own journey and the journeys of their organizations. A career pivot can be understood as the call to adventure. The fear of failure becomes the “dark night of the soul.” A breakthrough moment, whether winning back a client or completing a turnaround, marks the return with a gift of wisdom.

When narrated this way, even difficult experiences gain coherence and dignity.

Rehearse for reality

Stories also serve as a form of cognitive rehearsal. By picturing ourselves or our companies as protagonists moving through these phases, we prepare for what lies ahead. We practice responses to adversity before it arrives. This builds much needed resilience and agility.

One executive I worked with used the hero’s journey to make sense of an international assignment that had gone badly. Instead of telling himself he had failed, he reframed it as the “ordeal” stage in a larger cycle. That shift allowed him to treat the experience as a source of learning rather than shame. The new story didn’t erase the difficulties, but it gave them meaning and left him better equipped for the challenges that followed.

A senior leader preparing for a merger applied the same idea. He imagined himself not as a passive actor but as a protagonist in a transformation story— facing trials, adapting, and eventually returning stronger. This mind-set helped him project confidence instead of fear, and his team drew strength from his narrative.

Not every story heals

However, the narratives we cling to can sometimes do harm. Executives who insist on defining themselves as the lone savior may be blind to collaboration. A company that endlessly repeats its story of past dominance may resist needed change.

Leaders must pay attention to the stories they tell themselves. Are they fostering growth, or are they reinforcing fears and limiting possibilities? The wrong script can keep leaders trapped in roles that no longer serve them.

Organizations can also suffer from inherited narratives. Founding myths might become constraints rather than sources of inspiration. A consumer goods company I studied kept repeating the story of its legendary founder, a perfectionist who demanded flawless execution. While inspiring at first, this narrative eventually paralyzed innovation as employees were too afraid to experiment. The very story that once fueled success had become a barrier to adaptation.

Rewriting the script

The good news is that stories aren’t fixed. People and organizations can rewrite their scripts. A setback can be recast as a turning point and become a catalyst for reinvention. It can set the creative process into motion. Leaders who approach narrative consciously can fine-tune their identity, direction, and purpose.

This process takes work. I recommend keeping a journal or revisiting key episodes of one’s career, alone or guided by a coach. Executives may also invite colleagues to share how they perceive their journey. Organizations can run story audits, gathering the informal tales employees tell, then shaping them into a coherent narrative that points toward the future.

By rewriting the script, leaders free themselves and their organizations from the weight of outdated identities. They create stories that encourage innovation and mobilize people in uncertain times.

Leadership as storytelling

Storytelling isn’t an optional skill but a central function of leadership. Leaders who understand stories as the architecture of identity—who tame chaos, draw on the hero’s journey, and remain alert to harmful narratives—are better equipped to lead effectively.

Facts matter. But without the structure of story, they rarely move people. In turbulent environments, it’s the leader’s ability to craft and live a compelling narrative that helps others make sense of the past, find clarity in the present, and face the future with confidence.

Published Nov. 11, 2025, by INSEAD Knowledge.