Squirrel Inc.: A Fable about Leadership through Storytelling


"A wonderfully refreshing look at leadership that contains countless insights on how stories create meaning and can inspire even cynical management to act. Its central message kept resonating in my head for weeks after reading it. I highly recommend this book."
John Seely Brown, former chief scientist, Xerox Corp., and director of its Palo Alto Research Center (PARC)

"It is hardly a nutty idea that narrative is a useful means of transferring knowledge from one human—or squirrel—to another. Steve Denning's ...

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"A wonderfully refreshing look at leadership that contains countless insights on how stories create meaning and can inspire even cynical management to act. Its central message kept resonating in my head for weeks after reading it. I highly recommend this book."
John Seely Brown, former chief scientist, Xerox Corp., and director of its Palo Alto Research Center (PARC)

"It is hardly a nutty idea that narrative is a useful means of transferring knowledge from one human—or squirrel—to another. Steve Denning's wonderful story about stories is a unique way to tell a fundamental truth about how organizations improve their performance."
Thomas H. Davenport, President's Distinguished Professor, Babson College, and Accenture Fellow

"I've witnessed the power of narrative in my work and life, but I haven't had the tools to effectively employ story when I've needed it most. Denning's book provides the 'how to' for which I've been looking."
M. Gary Ryan, director, Brand Development and Strategy, People Magazine

"Steve Denning is one of the most imaginative knowledge practitioners around, so it isn't surprising that he's produced a charming and illustrative fable about organizational life (among other things). Read it and grow wiser in the ways of squirrels and men!"
Larry Prusak, coauthor, What's the Big Idea and Working Knowledge

"The success of a leader can best be measured by how many who actually followed. Steve Denning's work is an important reminder and great inspiration to all leaders who wish to connect with their employees on all the human dimensions required to create true followership."
Mats Lederhausen, managing director, McDonald's Ventures, McDonald's Corporation

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Editorial Reviews

From the Publisher
“…a very effective management tool…it is sure to inspire readers working in all sorts of organizations…” (Edge Magazine, February 2005)

“…This charming little book holds many secrets within its attractive covers….” (City to Cities, Jan/Feb 2005)

“…clearly encapsulates both the why and how of seven types of organisational storytelling”. (Knowledge Management, September 2004)

“…makes serious points about leadership and change…” (Financial Times, 29 July 2004)

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Product Details

  • ISBN-13: 9780787973711
  • Publisher: Wiley
  • Publication date: 5/28/2004
  • Edition number: 1
  • Pages: 208
  • Sales rank: 600,611
  • Product dimensions: 6.30 (w) x 8.18 (h) x 0.83 (d)

Meet the Author

Stephen Denning is a leading writer who consults with organizations in the U.S., Europe, Asia, and Australia on leadership, management, innovation, and business narrative. In 2009, he was a visiting fellow at All Souls College, Oxford University, U.K. He is the author of The Secret Language of Leadership—a Financial Times selection in Best Books of 2007, and a 800-CEO-READ selection as the best book on leadership in 2007.
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Table of Contents

Preface xiii

The author explains the purpose of the book and the process by which it came to be written.

Part One

1 Squirrel Inc.: How to Craft a Story to Spark Organizational Change 3

Diana is an up-and-coming executive at Squirrel Inc., an organization in decline. She seeks guidance from a bartender on how to persuade the organization to change. She learns, in nine steps, how to craft a story to communicate a complex idea and spark action.

2 Diana Tells Her Story: How to Perform the Story to Spark Change 25

After initial success with her story at Squirrel Inc., Diana returns to seek further guidance from the bartender on how to enhance the performance of her story.

Part Two

3 Save Squirrel Inc. Night: Seven Types of Organizational Storytelling 41

After the success of her story with the managing committee of Squirrel Inc., Diana joins employees to explore other ways in which storytelling can help address the challenges the firm is facing.

4 Whyse's Story: How to Use Storytelling to Reveal Who You Are and Build Trust 49

Whyse shows how storytelling can enhance communication in corporate environments by communicating who you are.

5 Hester's Story: How to Use Storytelling to Get Individuals to Work Together 59

Hester shows how storytelling can be used to get individuals working together. She presents five steps to craft a story for nurturing a community.

6 Mark's Story: How to Use Storytelling to Transmit Values 69

Mark shows how stories that are told and retold in a organization, particularly about the organization's leaders, transmit the organization's values.

7 Mocha's Story: How to Use Storytelling to Tame the Grapevine 79

Mocha shows how humor can be used to harness the power of the informal network of communication in an organization and to tame the grapevine by neutralizing rumors and bad news.

8 Howe's Story: How to Use Storytelling to Share Knowledge 89

Howe shows how the sharing of knowledge takes place through a particular kind of narrative.

9 Sandra's Story: How to Use Storytelling to Create a Future 101

Sandra shows how future stories—visions, business models, scenarios—help organizations move into the future. Meanwhile Howe reveals some unexpected developments within Squirrel Inc.

10 Howe Upsets the Acorns: How Individuals and Organizations React to Change 115

The discussion in the bar now turns to what will happen next at Squirrel Inc. Will the old way of doing business triumph? Or will Squirrel Inc. carry through with the change? The characters explore these and other possibilities.

Part Three

11 The Journey of a Leader: Staying Alive Through the Dangers of Leadership 127

As the continuing tale of Squirrel Inc. unfolds, the characters encounter a variety of surprises and Diana goes on a journey.

12 The Return to Squirrel Inc.: Living the Story as Well as Telling It 143

We learn the impact of storytelling on Squirrel Inc. and on Diana herself.

Seven High-Value Forms of Organizational Storytelling 150

The nature, form, and purpose of seven high-value kinds of organizational storytelling are compared, in a table.

Notes 155

Further reading 169

Write to the author 177

Acknowledgments 179

About the author 181

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First Chapter

Squirrel Inc.

A Fable of Leadership through Storytelling
By Stephen Denning

John Wiley & Sons

ISBN: 0-7879-7371-8

Chapter One

Squirrel Inc.

How to Craft a Story to Spark Organizational Change

Estimated percentage of nuts that squirrels lose because they forget where they put them: 50 -THE HARPER'S INDEX BOOK

It is ten-thirty in the morning when she climbs for the first time into my tavern high up in the old oak tree on 44th Street. I observe that her fur is smooth and perfectly groomed. I've never seen her in here before, or indeed anywhere in these green and leafy trees, but from the way she comes in with her tail very straight and twitching, she is visibly with it, totally today. She asks for a double-fermented rose nectar, with a twist, shaken but not stirred, and then insists that I use a different woodcup, with a thinner lip and chilled for no less than a minute. Even something as simple as a drink involves a mass of planning-typical Squirrel Inc. Yet I also sense something else hidden beneath her furry façade. It's faint but, for a wizened old bartender like myself, unmistakable-something haunting, half-formed, incomplete.

She's carrying off the appearance of being a calm and collected Squirrel Inc. exec with all the pieces of her existence interlocking in a carefully planned pattern. But a Squirrel Inc. exec doesn't climb into a dark, dapple-lit tavern like mine high up in an old oak tree on a bright sunny spring morning, alone, and order a double-fermented nectar unless something is up with the plan of her well-ordered life.

But there's no sense rushing things. It's still early and the tavern is practically deserted. I get her the fermented nectar and fix her fresh hickory nuts. I go on cleaning the woodcups, getting everything ready for the usual lunchtime rush, casual-like but hovering all the time in her vicinity, so that when she's ready for it, she can get what all squirrels are looking for when they come into my tavern-unintrusive company, a sympathetic ear, contact with some other living thing.

Years ago you wouldn't have seen a female squirrel alone in here at all, or if you had, you'd have known that she hadn't exactly come here for a drink. But times have changed. The squirrel workforce is now full of females clambering their way up managerial ladders and smashing into glass ceilings with alarming frequency. I see all types in here-male, female, gray, brown, black, all shades, all shapes, you name it. Why should I discriminate? These are difficult times for squirrels. Somewhere, there has to be a place of respite, an oasis where bruised egos can find succor, comfort, a substitute for love.

She finishes her double-ferment a little too quickly.

"Another?" I suggest. I have to stay in business too, you know.

"Why not?" she replies.

Last night's rain has washed and refreshed the atmosphere. A breeze carrying smells of wet grass and fresh earth is blowing gently though the tavern.

"Great day, huh?" I prompt as I hand her the second woodcup of fermented nectar.

"I wish," she whispers as she cradles her drink.


"Difficulties?" I venture.

"Big time," she replies.


"Not to me, it doesn't," she says. "Not to the rising star of Squirrel Inc."

Why am I not surprised?

"Here I am," she continues. "The hope of the firm's future. The one that's beaten every nutty goal they've ever given her. The one that knows what to do when the firm is in crisis. The one with the idea that will enable it to survive."


"No one's listening," she says. "It's as if I no longer exist. Suddenly I'm an outcast. They see me coming and they run the other way. The thing is, they're not going to survive as an organization if they don't listen. I know I'm right."


"I've just come from a meeting," she says. "I'd done all the numbers, and the rates of return were amazing. I'd put together a presentation. All the right slides. I thought it was straightforward. But they just looked dazed."

"You gave them reasons?"

"I gave them reasons till they came out of my spleen. They're simply not listening. My idea is too strange, too disruptive, too different."

"Pity," I say as she sails through her second drink.

"Someone told me that you may be able to help."


"Skip said you'd know what to do."


"A friend," she says. "He said you'd come up with something new. Something old that's being put to a new use. What did he mean?"

"I guess he means Dio."


"A squirrel," I say. "Used to hang out here."

"I've got to talk to him."

"Actually this is a she," I say. "She's on the road a lot."

"I need to speak to her."

"Not sure that's possible," I say. "She hasn't been here in a while."

"There must be a way," she says agitatedly.

"Not that I know of."

She takes a pull of her double-ferment.

"I mean, who is she? What is she?" She stares at me.

"Dio? She taught me all I know. Got to the top of one company and was about to be thrown out. And then she figured out how to get back in the game. Used to be here all the time telling us how she did it. Now she's moved on."


"Fresh woods. New pastures. How would I know?"

"No need to get your fur ruffled," she says.

"I'm perfectly calm," I say.

"But you heard her talk?"


"More than once?"

"All the time," I say, arranging some acorns.

"You followed what she was saying?"

"I know it backwards," I say.

"Skip said it was a miracle," she says.

"Miracles don't exist, my friend."

"I mean, just try. What would Dio say to me if she were here right now?"

She looks at me with those big round squirrel eyes and I feel again that incompleteness. "Many things," I say.

"For instance?"

"Suppose I told you it costs nothing and is very easy and natural?"

"Then I wouldn't believe you," she says. "How could it possibly work?"

"Suppose I told you it's something that's hard-wired into our brains at birth?"

"I'd ask myself what you'd been smoking."

"Did you ever try telling a story?" I ask.

"Why would I do that?"

"Because a story can communicate a new idea quickly, easily, and naturally."

"Not in Squirrel Inc.," she says.

"Why not?"

"Stories aren't serious," she says. "Squirrel Inc. is. It's modern. It's analytic. It's sharp. It's focused on profits. It's bottom-line. It doesn't mess around. No emotional mush. No touchy-feely stuff. Squirrel Inc. would never go for anything like that."

"Did you ever actually try a story?" I ask.

"As a matter of fact, I did," she says. "One meeting, I described what the future would be like."


"They said it would never happen here. Perhaps in some other company, but not in Squirrel Inc."

"Maybe," I say, "there's another way to tell the story."

"What do you mean?" she asks.

"Dio said there are different purposes in telling a story, and for each purpose you tell the story in a different way. Maybe you told the story in the wrong way to achieve your goal."

"It doesn't matter," she says. "I know a story won't work."


The mockingbirds are in full song now as she nurses her double-ferment.

"But you've heard Dio talk," she says. "She knew how to communicate a new idea and get everyone into action."

"If you say so."

"If I don't get the big idea across," she says, "I'm going to be roadkill."

"So what is the big idea?" I say. "How are you going to save Squirrel Inc?"

"Simple," she says, and smiles. "Squirrel Inc. has always been a company that helps squirrels bury nuts. That's not going to work in the future. The nuts keep getting lost. It's got to become a nut-storing company."

"Going from nut burying to nut storing is a pretty big transition," I say.

"It's too much for them," she says. "Squirrels have always buried nuts as a matter of instinct. But it's not going to work anymore. Humans keep digging up their gardens. The nut-loss rate is just too great. It worked wonders for us, all those years. But now those years are over."

"Your idea is pretty clear?" I say.

"Couldn't be clearer," she says.

"Then you're halfway home. Most of the time, Dio would say, the problem in getting an idea across is right there in the first step."

"What's that?"

"Getting clear on the purpose," I say. "What's the change you're aiming for? It sounds like the easiest thing to be clear about. It should be obvious. So many squirrels come in here, all upset, but when you pin them down and get them to say what change they want, they don't really know. They haven't thought it through. So you're way ahead of the game. You've already got a clear idea of what change you're trying to make. You've already taken the first step."

She looks at me intently. "OK, wise guy, what's the second step?"

"You really want to do this?"

"Yes," she says, "I do."

"Then think of an incident."

"Think of an incident?"

"Exactly. Think of an example where this has already happened successfully, even in part."

"You mean, make something up?"

"No. That's not going to work. You need a true story. It's the truth of the story that springs the listener to a new level of understanding. I'm talking about a real-life incident where this actually happened."

"There isn't any."

"Think harder!"

"This idea is new for Squirrel Inc.," she says. "It's a nut-burying company, not a nut-storing company."

"Has any other company done it?"

"Not that I know of."

"You mean no squirrel has ever set about storing acorns rather than burying them? Ever?"


"Not even outside the company?"

"Well," she says, "there were a couple of squirrels I once heard about."

"Tell me more."

"I know a squirrel called Skip."

"So I gather."

"Skip and I were going together, but then he went to live in another city."


"Well, he told me about some squirrels there. They experimented with storing acorns, and everyone said they were crazy."

"Did it work for them?"

"It worked beautifully," she says, "for part of the winter. They sat back and relaxed and ate their stores of acorns. But they didn't store enough. They ran out in January."

"So there was a case where this actually happened."

"That's what Skip told me."

"And it worked?"

"In part," she says. "Not as well as it might have if they'd stored enough acorns and had the proper storage conditions. But, yes, in part, it worked."

"What do you know about the squirrels who tried it?"

"Skip said they were a mixed bag. A new-age group."

"What else do you know about them?"

"They were a wild bunch," she says. "You know, doing odd stuff, except for one nifty squirrel who focused on hickory nuts because they lasted longer. He made it through to February. His name was Timmy."


"The only normal one in the bunch, according to Skip."

"And he almost got through the winter?"

"Not right through," she says. "According to Skip, Timmy didn't store enough nuts with the proper storage conditions, so eventually he had to go out looking for buried nuts. He does the books for some big company."

"So Timmy is not too different from the squirrels you're trying to convince in Squirrel Inc?"

"Maybe," she says.

"Where did this happen?" I ask.

"The Windy City," she says.

"When?" I ask.

"Last winter," she says. "But I don't get it. What's your point?"

"What we're doing," I say, "is crafting a story that you can use to get Squirrel Inc. to understand the idea of storing nuts and implement it. Giving the date and place signals to the listener's brain that this really did happen."

"But Timmy is only one squirrel," she says, "and even he didn't get through the winter. My idea is about millions of squirrels, all of them getting through the winter by storing nuts. How can a story about a single squirrel convince anyone?"

"You'd be surprised," I say.

"Think about it," she says. "As evidence, a single squirrel is insignificant. Now, if I had a survey showing that lots of squirrels in the Windy City were getting through the winter storing nuts, that might get some attention. But just one squirrel? And that squirrel messed up? Forget it!"

Just then the sun flashes through the leaves for an instant and highlights the troubled expression on her face.

"It's not the number of squirrels involved," I say. "That's thinking with only one side of your brain-the left side. Why don't you try the right side for a change?"

"What do you mean?"

"The left side of the brain analyzes things in a rational way-three threes are nine. The right side of the brain looks at things more creatively. For the right side of the brain, three threes might be nine. But they could also be three hundred and thirty-three. There's always more than one way to understand something."

"But what's in this for Squirrel Inc.?" she says. "They're only interested in the analysis. They don't give a damn about the imagination. Just the bottom line! What do they care about a bunch of mixed-up squirrels in the Windy City? Nada. Rien. Nichts. In Squirrel Inc., three threes are nine, punto! They'll never go for a story."

"That's where you're missing something," I say. "The fact is, we all tell stories. We start doing it when we're little, with our parents, our brothers and sisters, our friends. We tell stories for all sorts of purposes, unconsciously, instinctively, intuitively. We don't have to be taught how to do this. We do it naturally."

"Exactly," she says. "This stuff is for babies."

"That's what we're told when we go to school," I say. "We're told, 'OK, children, now you're going to put aside your toys and your stories. Now you're going to study the significant things-math, algebra, geometry, physics, chemistry.' And so we forget about storytelling."

"But that's just school."

"The same thing happens when we join an organization like Squirrel Inc. It's all about analysis and abstractions. But what do we do after one of these exhausting, boring lessons at school or the even more boring meetings in an organization? We rush outside and ...?"

"We relax," she says.

"But how?" I say. "We tell stories. We tell stories with our friends, our colleagues, our family. Anyone who'll listen. Why? We find it energizing. We find it refreshing. We can do it all day. We can do it all night. Even when we're asleep, we dream in stories. We can't get enough of it. Storytelling is our very nature. We've just pretended to ourselves that we're something that we're not. And the squirrels at Squirrel Inc. are no different.


Excerpted from Squirrel Inc. by Stephen Denning Excerpted by permission.
All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
Excerpts are provided by Dial-A-Book Inc. solely for the personal use of visitors to this web site.

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  • Anonymous

    Posted October 25, 2004

    Highly Recommended!

    Any leader will benefit from mastering sincere storytelling that is designed to achieve specific organizational objectives. By using some storytelling techniques himself, in the form of a fable about business-owning squirrels, author Stephen Denning teaches you how to tap into your natural storytelling ability, so you can focus your listeners' goals and vision. He explains what types of stories elicit a variety of desired outcomes. He also teaches you how to tell your story and explains the reaction you can expect to generate if the story is apt. Storytelling lets leaders engage people, helps them relate to the company's goals and creates a forward-looking organization. With Denning's guidance, you can use your 'once upon a time' skills to build camaraderie, focus and happy endings. We recommend this book to all leaders, since storytelling is destined to become an unexpectedly critical skill.

    1 out of 1 people found this review helpful.

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