The Extraordinary Horsepower a Great Story
That's how Bruce Greenwald, a professor at Columbia Business School and an expert in 'value investing', describes the current business valuation of the car company Tesla in a recent New York Times article.
Nevertheless, it happened. Tesla's sky rocketing share price last week took the value of the upstart company to nearly $49 billion.
More than Ford. Almost as much as GM.
Here's the really nutty part.
Ford earned $11 billion in profit last year. GM +$9.4billion.
Tesla lost $773 million last year.
What the heck?
So, what is increasing Tesla's price to over $300 per share?
A dang good clear and relevant story that is driven by one person's passionate vision.
Tesla's story is simple and consistent. Everything the company does and the way it acts is aligned behind the story. Their Vision. Their Culture. Their Image. Therefore, with such clarity, it has far reaching impact on a wide range of people - most of whom would never even consider buying a Tesla.
But they value the laser focused story and the authentic passion....to the tune of $49 billion.
Tesla is all about "a utopian future of safe, reliable, powerful, self-driving electric vehicles energized by solar fed batteries that are easy on the environment."
And, as everyone knows, it is the brainchild and personal passion of one Elon Musk.
This is how to really build the value of a company...even your company.
Wall Street calls these "storied stocks". We've seen this phenomena before of a laser-focused, logical story driven consistently by a laser-focused passionate personality resulting in an incredibly valuable organization.
Think Jeff Bezos and Amazon.
Think Brian Chesky and Airbnb.
Think Steve Jobs and Apple.
Now, come down from this rarified air and think about your own organization.
The formula is the same.
1. A simple, customer centric story ("Your customer has the answer") that provides the logical solution for an everyday issue.
2. A focused, passionate leader who stands as the embodiment of this story. They lend all the authenticity and credibility to the story ("People believe people") It is almost magical how the customer can just sense this leader's true passion and their values. It is what gives the brand a soul.
3. Align your Vision (your management), your Culture (your employees) and your Image (your customers and your potential customers). Remember, Culture is key. People believe the actions of your people far more than fancy words or cool images. BE who you ARE.
4. Once you have your story, your storied leader, and your alignment both IN and OUT of the organization ....careful now, here is the real 'secret sauce'... stick to the story. Consistently tell it. Communicate it via every brand touchpoint. Work with your Culture to 'live it' every day.
Over years. Over decades.
Slight refinements - sure. Fundamental change - no.
Just look to Apple. Apple has essentially stayed with the same brand story for almost four decades now. Still relevant. Still powerful. Still highly valued with an impressive ROI. And, the people working in those Apple stores? - Yes, they still believe, and they inspire us all.
It is incredible to see how many organizations start with their terrific, real, upstart story (After all, why start if you don't have one?). Naturally, because of this customer-relevant, simple and true story - they begin to experience success.
And then, there comes a point where these successful organizations fall into ...what I call... the powerful and devious 'Undertow of Success'. These thriving, rising companies reach a strange point where they suddenly say "Hey, our original story is not good enough. We've got to start acting like the 'big boys' now." Yikes. They kind of forget how they got to where they are, and how.
Regrettably, at this point, they just feel the nagging need to change their story. Usually, this change of story is along the lines of now communicating "Hey, look at us now, we're just as good...as smart...as sophisticated...as competent....as global.....as .... as....as........ the big guys." The irony, of course, is that the organization got to the thriving point because they were different than the big guys. Their story was distinct and personal. Their people behaved differently than 'the big guys.' But that bad 'undertow' silently drags them away from their original, effective magical story.
The phenomenon just happens over and over. I guess there is just some perceived fear of inferiority instinct that makes organizations do this? They can't see where their authentic story has actually gotten them which is usually a pretty dang good position in the marketplace. But yet, they change their story to try and be perceived as 'more'. And, it undercuts the authenticity and the credibility of their previously developed, relevant and powerful story.
Many organizations tend to follow this similar path and play the brand diminishing game of 'follow the leader'. Thus, they get sucked into a sea of sameness. It is a powerful, but dangerous undertow.
Beware. And, be smart.
BE who you ARE - always.
You don't see Tesla now saying: "See, now we're as good and big as Ford and GM."
No, they just keep telling THEIR story and the disciples (and the dollars) keep coming.
Yep, the Telsa auto is parked squarely at the intersection of Wall Street and Madison Avenue.
And that's a mighty profitable place to be.