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I recently caught up with a friend whose company raised $100 million in VC funds earlier in the year. I congratulated him and asked how they’d been able to do so well in such a competitive market. He credited the company’s founder explaining, “He’s a very sharp guy, an engineer from MIT who knows the technology and market share well, but really, he’s just a phenomenal storyteller. Our product’s not that different from others out there, but he knows how to get VCs fired up and eager to buy into his vision.”

I’ve seen the same ability make the difference between salespeople who could land a tough client and those who couldn’t and founders who were able to maintain their position at the forefront of their companies and those who were displaced.

I’ve watched leaders tell stories that inspired their teams and teachers use stories to bring home their point, and I’ve become convinced that understanding what stories are and how to tell a good one may be the most powerful skill no one ever taught us. There’s an art to great storytelling, but the basics aren’t that hard to learn. To be more charismatic, persuasive, and effective, every leader should have three distinct kinds of story in their proverbial back pocket and be familiar with four basic techniques to make them as engaging as possible.

I’ve been privileged to know many amazing storytellers, starting with my father, who was a legendary figure in the San Francisco real estate scene. And by “legendary,” I mean he was a guy people told (and still tell) stories about. Everyone who ever met him seems to have a Walt Lembi story. He told as many as he inspired, so it’s something I grew up watching in action. Here are the four things I’ve identified that stories need to be effective. They need to make sense and meaning, and they need to meet the listener where they are and take them somewhere.

Stories Need to Make Sense

If you’ve ever had a child tell you a story, you know why this is important. Stories can (and should) be surprising, but they must be internally consistent and obey the laws of human nature, cause-and-effect, and physics. Confusing or illogical stories alienate listeners, and that’s the opposite of what you want.

Because we make sense of the world by constructing mental narratives, stories also have their own kind of logic, which sometimes contravenes actual logic. With thanks to Daniel Kahneman’s wonderful book, “Thinking Fast and Slow,” for the example, if I told you a story would feature a farmer and librarian and then introduced a male character as “shy and withdrawn” who is a “meek and tidy soul,” with “a need for order and structure, and a passion for detail,” you’d probably expect him to be the librarian. There’s no statistical rationale for this story-logical assumption – farmers outnumber librarians five to one, and the differential between male farmers to male librarians is even higher.

Stories Need to Make Meaning

A list of things that happened isn’t a story. Stories make a point. Although you’d never end a story with “And the moral of the story is…” if you did, your listener should be able to finish the sentence. There’s a test to both figure out the point of a story and make sure your story delivers the one you’re trying to make. Every story involves conflict or change, and whatever resolves the conflict or causes the change makes the point.

It’s possible to make your point subtly. A good analogy can draw a telling comparison between the story and a real situation, and stories that raise questions in the listener’s mind make the point that things may not be as absolute as they seemed. You can also use a story to help people imagine different outcomes by using an emotional tone that skews positively or negatively on the story’s subject.

Stories Meet People Where They Are

Back when I was in sales, I regularly told stories that illustrated how our company had helped a business that was facing a situation similar to the one the potential client was in. Once, during a presentation to a VP of a large healthcare company, I started to share a scenario in which we’d delivered a solution essentially identical to the one he was requesting for a retail customer of ours. The VP stopped me mid-sentence to point out that they weren’t in retail, so my story wasn’t relevant. Perhaps, had I not mentioned the other client’s industry, he would have seen the parallels more immediately. Certainly, just a little imagination would have carried him across what was really an inconsequential difference (the problem we were solving wasn’t industry-specific). But he couldn’t see himself in the story so he couldn’t relate. Highlighting similarities between your story and your listener allows them to engage more directly.

Meeting people where they are requires more than just aligning retail stories to retail clients. If you’re talking to a group of young people, tell a story about your youth. Stories are a powerful tool for creating a sense of community and simply highlighting a point of commonality with your audience can help them feel connected to your story and to you.

Stories Take People on a Journey

Part of the power stories have is their ability to evoke an emotional response in a way that pure information cannot. Unless a statistic is inherently surprising or shocking, it won’t have an impact or be memorable. Use a story to supply context and illustrate why the data you’re sharing is important. If you’re telling a story to persuade people, start with something everyone agrees on and take them with you as you move from that point of agreement to a new point of view.

What Stories to Tell

While the best storytellers seem to have a story for every occasion, leaders need a minimum of three: a why story about the reasons you do what you do; a what story about the most impactful lesson you’ve learned; and a wow story – one that gives people a little insight into your humanity by sharing something surprising about you.

Why Stories

Leaders should be able to tell their company’s origin story (why it came into being) or their individual sense of purpose (why they care about the company and dedicate their time and energy to it). To find your best why story, think about those situations in which you want people to feel inspired.

What Stories

These are perhaps the easiest stories to come up with, and most leaders I know have several. These stories can tell the biggest lesson you ever learned, the time you overcame a significant obstacle or solved a serious problem, and they can be used to make almost any point. Think about the point you most often need to make to your people or clients and build your what story around it.

Wow Stories

Business is less buttoned-up and more personal than it used to be. People want to know about you beyond your role, and having an entertaining story from your personal history is a terrific way to satisfy them. It’s always important to read the room and know your audience, but especially for these stories, make sure what you’re sharing is appropriate to the time and place. To avoid slipping over the line between an interesting story and an annoying boast, look for a wow story that comes from your personal rather than professional life and offers a glimpse into your character. The most important thing about these stories is that they be enjoyable for your audience. Look for a story with a satisfying emotional pay-off that’s surprising, moving, novel, emotional, or funny.

How to Tell a Good Story

You’ve been telling stories all your life, whether you recognize it or not, but there are four elements to include if you want to make them as compelling as possible.

Have a beginning, middle, and end. At the most basic level, the beginning sets up the status quo, here’s how things were, the middle shows the change or conflict here’s what happened, and the end illustrates the outcome, here’s why that matters.

Use details. You don’t want to drown a story in description but give your listeners enough visual and sensory information to “see” the story you’re telling.

Include emotion. This can be as subtle as choosing one word over another (it’s a very different thing to spring or drag yourself from bed) but you can also simply name a feeling.

Create suspense. Suspense is simply what happens in listeners when you’ve made them care about a question you’ve raised in their minds and create a little space before you answer it.

One last tip: stories don’t need to be long. One of my favorites is only 109 words but meets the above criteria and was told by Abraham Lincoln, a great leader famous for his storytelling. At the dark heart of the Civil War, he was asked whether he doubted the Union would survive. He answered with a story:

“When I was a young man in Illinois, I boarded for a time with a deacon of the Presbyterian church. One night I was roused from my sleep by a rap at the door, and I heard the deacon’s voice exclaiming, ‘Arise, Abraham! the day of judgment has come!’ I sprang from my bed and rushed to the window, and saw the stars falling in great showers; but looking in back of them in the heavens I saw the grand old constellations, with which I was so well acquainted, fixed and true in their places. Gentlemen, the world did not come to an end then, nor will the Union now.”

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