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The Fourth Chapter

Do Androids Read of Electric Dragons?

Act 1: Discovering stories

Once upon a time… a young woman's father remarried. A duckling hatched from its egg. A ring, lost for centuries, was found by a hobbit.

We all love a story, don't we? They entertain us, they teach us lessons about the world, they give us an emotional connection. But stories play a deeper, more pervasive role in human thought than this. They are a reflection of our need to make decisions that persist beyond the present moment, and they are a manifestation of the mental capability that allows us to do that.

Most narratives share a few essential elements: a goal, a character, evolution through time and a sequence of events linked by cause and effect. Our minds are so receptive to this format because these are exactly the psychological tools our brains use to implement our pursuit of longer-term objectives.

It is no trivial matter to be able to set a goal in the future and work diligently toward it. Most organisms on the planet are driven either by genetically coded instinct or by behavioral reward (as when pigeons are trained to push buttons to earn seeds). However, when we plan to achieve something in the future, whether it will take an hour, a week or ten years, we must take steps towards it without getting any reward. The prize only comes at the end.

How do we motivate ourselves to take those steps? With a narrative. The narrative tells us that each step moves us closer to the goal and that each action follows from the one before. Every step we take within that narrative gives us the mental reward of progress, of playing our part in the story. This is why stories are so natural to us, and so powerful in influencing our behavior.

After the agricultural, industrial and information revolutions, the fourth chapter of the economy’s story could be a revolution in what we want and who we are. Our preferences and goals - and those of the technologies that help us - are the next territory on which's economic history will play out.

Act 2: Stories grow in power

Any powerful tool is soon adopted by companies and marketers to influence our behavior, and narratives have been widely used in this way. The simplest is a two-act story: a person had a need, and this product satisfied it. More sophisticated marketing creates more complex narratives, about relationships between people and the product's role in connecting them; about the contrast with an inferior product that doesn't satisfy the need so well or a story showcasing the lives of strangers illustrating a need we didn't even know we had.

These stories have a profound impact on our culture. The storytelling in the UK's series of Nescafé Gold Blend ads 1 was so strong it led to a spinoff novel. Germany's Edeka Christmas ad 2 and Coca-Cola's ads around the world 3 are powerfully moving. And a recent example from Google 4 is a clever instance of a story told through the company's own medium.

Commercial narratives evolved from just demonstrating how a need is satisfied into stories that helped create new desires. Ultimately, the story itself came to play a part in fulfilling those desires. We seek purpose and meaning in our lives, and the strongest brands – like Apple, Tesla, Red Bull, Gucci, Airbnb, Nike, Harley Davidson and Twitter – deliver part of that meaning for many people through the stories told or implied by the brand. For example, when you drive a Tesla, you get to be a character in the world's transformation towards green energy, and you're also an extra in Elon Musk's sometimes bizarre, but always dramatic, personal story.

Having learned how to tell stories for their customers, many companies started to build stories for their employees, too. Being part of an organization like Google, Goldman Sachs, McDonald's or your country's government comes with its own narrative. It says something about who you are, the colleagues you live and work with and what the organization stands for. These stories are essential to our perception of work and the intrinsic rewards it gives us. They have become a core part of wellbeing in the modern workplace.

In 2016, the Future of Wellness at Work report found that belief in 'a corporate wellness narrative' plays a bigger part in employee wellbeing than actual workplace programs 5. This was especially true for younger employees: millennials reported their top priorities as working for a caring company and seeing the positive impact of their work. It seems that work narratives, always important, are becoming even more crucial with every generation. They provide wellbeing by giving work meaning, reducing the alienation sometimes felt in the corporate world and through the feeling of safety that arises from simply knowing somebody cares.

Act 3: Stories are not just for you and me anymore

Technology progresses. We all get faster, better and more demanding. Everyone has chosen the portfolio of stories that suits them, and this tells us each who we are. Our brains are saturated. We are hearing as many stories as we have time and mental space for, but still, we want better lives.

A day came when we had no time left to seek out products that would make us happier. Nor could we put aside the pressure of daily tasks to engage more deeply in the stories told at our workplace. This created a problem not just for us, but for the companies who want to sell us things. Consumers have no time to search out products, so companies had to find ways to help them shortcut that search process.

Some businesses have managed to do this without much technology: the local wine shop whose owner knows what you like and orders it in before you even ask, or the art gallery whose curators you trust. But as software algorithms have become more sophisticated, they have been able to take over more of this work. Amazon's recommendation engine works out what it thinks you might want and shows it to you, even when you're shopping for something else. Google intelligently interprets your search query and figures out – not necessarily what you asked for – but what you really meant.

Clever storytellers have realized that this is an opportunity to build a new narrative, not tailored to you, but to those buying on your behalf. As the vintner has learned to tell a story that appeals to independent wine shops, online sellers have built stories that Amazon's recommendation engine can recognize. They achieve this by building product descriptions and soliciting user reviews that make their products more likely to be shown in 'People who liked this also bought…'. And everyone with a successful website has had to structure it to tell a 'story' that Google can read: the process of SEO or search engine optimization.

These stories are only one step removed from the traditional marketing narrative. They are still about expressing and fulfilling your needs as a consumer, but in a way that is interpreted by a curator or intermediary.

Sometimes in fairy tales, the monarch appoints a courtier to help manage the kingdom. So, subjects now bring their requests to the grand vizier instead of directly to the queen. Maybe the vizier is honest and represents the queen's interests faithfully. Maybe he is more self-interested and pursues a different agenda. Either way, he has his own way of seeing the world, and the peasant's request should now be phrased to appeal to him instead of the queen.

The citizens need to learn the language and priorities of the state bureaucracy if they are to navigate its intricacies and benefit from its resources. They make their case in one way to a judge, in a different way to the local tax collector and in yet another to the town councillor who seeks their vote. And in the same way, our own commercial interactions are each with a company at a particular level in the global supply chain. We need to tailor our language to tell stories to the manufacturer, the shipping company, the lawyer, the bank, the retailer and the web marketing agency we deal with.

A great example here is law firm BLP's Heist ads, which used storytelling to remind companies of the information security risks they face. A series of videos inspired by Ocean's 11 showed the possible scenarios that might expose a business to liability. The end consumer might not be directly affected by these events, but the company's ability to profitably serve them definitely could be 6. These ads, in a way, are telling the company's executives that their own wellbeing will be best served by hiring this law firm, as doing so will reduce stress and worry. The story links personal emotions to business interests in a way that straight facts can rarely achieve.

Act 4: Artificial intelligence – the computer becomes the audience

Growth drives demand for efficiency, and technology satisfies that demand. Companies are automating both their buying and selling processes, their investment activities and – at least a little – aspects of their employment relationships, too.

With complex interactions and information being passed across multiple channels, that automation increasingly relies on artificial intelligence and machine learning. AI is involved in not just the selling but also the buying of products. Sometimes this happens at an industrial level, with components or services being purchased as a part of building a bigger product. Sometimes it happens at a much more personal level, with AI algorithms directly reflecting consumer needs and desires. We see this in action when Google's shopping feature highlights products you might want to purchase, Netflix tells you the shows you might like and apps like Intelistyle can find and recommend clothes for you based on your personal style.

AI is streamlining our work lives, too, with Gmail helpfully guessing the phrases you are likely to use in an email (a more useful, less annoying version of Microsoft's 'Clippy' from the 1990s). At their best, these tools take away the boring parts of work and free us to focus on the creative tasks.

Stories told by novelists, filmmakers and marketers work because they tap into some basic brain processes: recognition, abstraction, cause-and-effect, reward and goal motivation. Those same processes are being built into the latest artificial intelligence software. So if you can tell a story and captivate a human listener, perhaps you can tell stories to AI, too?

This was noticed, perhaps for the first time, in the investment world. Every quarter, companies publish a 10-Q or 10-K report: a description of company activities and latest news, plus financial data on balance sheet, profits and risks. In these reports, companies are careful in choosing their words. They want to make their financial prospects sound rosy without saying anything overtly dishonest. If investors think the report paints a positive picture, they are more likely to put their money into the stock.

In 2011, researchers Loughran and McDonald at the University of Notre Dame 7 published a new database of words used in financial reports to describe companies in either a positive or negative way. This database was quickly picked up by financial traders and used in algorithms that could automatically determine whether a 100-page 10-Q report was saying good or bad things about the company's finances.

In response to the emergence of these algorithms, what did companies do? They started writing their 10-K/Q reports to be read by the algorithms instead of by human readers. A second group of researchers 8 discovered that after Loughran and McDonald published their paper in 2011, companies started using the database's 'positive' words more often – indicating that they were tailoring the reports for artificially intelligent readers.

This was the first clear example of narratives being created to influence AI decision-makers. It wasn't the last.

AI is learning to understand language better and to parse the structures of stories and verbal arguments. A 2021 study published in Nature 9 10 described an AI system, Project Debater, that is able to both interpret and construct arguments in a debate against humans – not yet as well as people, but enough to at least compete. And Jessica Hamrick, a researcher at DeepMind, builds AI with imagination, in the form of mental simulation 11: a computer with the ability to play out possible scenarios in its 'mind' before making a choice.

If such computers end up out in the world, spending money and buying things on our behalf, it is easy to see why companies would start marketing directly to the software instead of to us. If a brand could show the AI a new way to imagine the world, by telling it a new story, it could influence the mental scenarios that the AI processes, and change its behavior. This is no different in principle than a TV ad that shows you and me a new way to think about Diet Coke. While Coca-Cola is busy teaching humans that drinking Diet Coke will make them look like hunky delivery guys, PepsiCo might focus on persuading Google's AI that by showing Pepsi products at the top of a search instead of Coke, users will become more curious and click on the search results more often.

Traditionally, software is given a task or an objective and its job is to figure out the best way to execute it. A major open question in both AI and human decision research is, Where do the tasks or goals come from? What makes us want to do a certain thing before we even get to the stage of working out how to do it? A breakthrough in AI is likely to await whoever can get the computer to figure out its own goals. Once that happens, the computer becomes less like a proxy for its owner and more like an entity with its own motivation.

This will be the time that narratives really start to matter. A narrative contains not just a series of steps but also a goal and a change in the personality of its character. Narratives that can help an AI work out what it wants, and 'who' it is, will unlock a potential revolution – maybe in more than one way. The moment when a robot decides what it wants, instead of what it is told to want, will present a huge ethical and practical challenge to humankind.

Act 5: AI, from observer to participant

When you realize the advertisers are not targeting you, it can be the first depressing sign that you're no longer relevant. Most of us will reach a stage in life where everything – music, films, commercials – seem to be designed for younger people. Imagine, now, that the dividing line is not age, but humanity itself. You start to see messages that you don't understand. Stories that don't quite make sense. Who are they really for? Perhaps this is the new meme-driven jargon of the TikTok generation? Or is the consumer of these narratives a robot?

Many parents had an experience like this a few years ago, when they found their young children watching an increasingly bizarre series of YouTube videos 12. These videos had been created by algorithms that learned what children were more likely to search for, click on and watch, and the results seemed creepy and horrifying to adults. The stories told in these videos – superheroes taking out mortgages, their heads magically swapped around by wands and syringes, surreal violence that made things change color but didn't kill anyone – made little sense to older viewers but had somehow emerged as a strange hybrid that appealed both to young humans and to the search and recommendation algorithms on YouTube.

We will see this scenario replicated more and more, as companies or software programs tell stories that are meant to somehow span the gap between us and our fellow consumers, the AI. The narratives will be recognizable in structure, but we just won't quite 'get' them. We will keep questioning whether the stories prove that AI has finally broken away from servicing human needs to take a place alongside us in society, or if we just don't understand everything that is going on.

In at least one environment this worry is already pervasive: the workplace. Automation has always created churn in the kinds of jobs that are valued – or that even exist – in organizations. In the last decade, a process familiar to agriculture and manufacturing workers has been experienced by white-collar and knowledge workers, too. First, the idea of replacement by machines. Then, stories and whispers that show it can really happen. A growing fear that you might be the next one replaced. Ultimately, the replacement does not happen everywhere and to everyone, as some companies change more than others, but the structure of the industry and the nature of jobs are fundamentally transformed. People coexist with machines, but their relative importance and bargaining power shifts.

When this happens to today's cohort of well-paid knowledge workers, they will hear a change in the stories their employers tell them. Those stories will be written to motivate machines as well as people. AI will only replace the creative director or the senior partner in a law firm when it can conceive its own objectives, make its own plans and empathize with the people whose lives its work touches. All of those capabilities require narrative, and the AI will need a story to believe in. Companies should now be thinking about what story will motivate their AI employees while still keeping their human staff onboard.

Act 6: When stories become threats

Much of our wellbeing comes from stories: the stories we tell about the future that give us hope, the memories we replay from childhood and the possibilities we imagine in the present that just haven't happened yet. If we don't engage with narratives, we miss out on all that. Employers, whether they know it or not, are telling us a story: the story of our purpose at work, the chapters between our last and next promotion, the justice that will be served on our worst colleague. From this story comes our enjoyment of work life and some of the mental stability that can see us through stressful times.

Now suppose that story rings less true. It is no longer as motivating, as stirring. Not because the listener has changed, or because the CEO has lost their storytelling touch, but because they are speaking to a new audience. A story told to multiple audiences often loses some of its power compared to one related to a specific group (to confirm this, you need only watch a TV ad that has been filmed for pan-European broadcast and overdubbed clunkily into each language). When the story that motivates them and provides meaning is diluted, the wellbeing of the employee will inevitably suffer. It may be thin compensation if the wellbeing of the AI has increased!

The meanings of stories are so important to us that it is no surprise to see the conflict over narratives repeated throughout history. Auerbach 13 14 has argued that 'the Israeli-Palestinian conflict is a conflict over identity, anchored in opposing meta-narratives and national narratives, and is therefore difficult to resolve.' In the less intense but wider environment of the workplace, if people start to see the narratives that give them meaning being co-opted, side-lined or altered for the benefit of AI, will they be happy?

The opportunities, though, are so great that it may be impossible to resist. Throughout a supply chain, value is added each time goods or services move along the chain towards their final consumer. As AI becomes more involved in decision making, the amount of value will itself be calculated by the AI. Companies will only be able to compete if they can portray narratives that an AI listens to. And it may inevitably turn out that the only storytellers who can speak authentically to AIs are other AIs.

When AI creates narratives for AI, faster and more effectively than we humans can do for each other, there will be few places left for us in the marketing ecosystem. Rather than fighting against it, we will be better off if we find a more sustainable niche. Telling stories to other people – through art, advertising, architecture or even accounting – is more likely to survive as a uniquely human contribution. But will this end up confining us in an ever-smaller niche, doing less consequential, even purposeless work while the AI takes care of the stuff that matters? That dilemma will be resolved by the choices we make in the years to come.

Act 7: Tragedy or rebirth – two futures await

As I walk down my London street I may see a poster advertising a film embedded in a map of cultural stories that are unfamiliar to me. I might overhear teenagers sharing stories full of slang, accents or styles of expression that aren't for me. Nor when I speak, will everyone around me understand the narrative I'm speaking from. Seeing narratives that are irrelevant to you might feel like a sign of conflict, obsoletion or separateness, but that is not the only future available. Humans have always been exposed to narratives from others, which can be uncomfortable or even incomprehensible. Eventually (not easily, and not always) we have learned to coexist with them.

Over time, we become alert to stories from outside our own realm. We can learn to understand without appropriating, to appreciate difference and the richness of perspective it offers, to expand our own vision of the world by absorbing parts of other people's.

We will coexist with AI, too. We don't know what marvellous mental journeys our computers will take without us, but when they return, we should listen to what they discovered. They will narrate tales to us that are initially strange, but in their foreignness reveal new truths about how computers think. If we are listening, they could teach us whether we can think differently, too.

Picture of Leigh Caldwell

Leigh Caldwell

Leigh is a cognitive economist, mathematician and founder of Irrational Agency (www.irrationalagency.com), a research consultancy that develops strategy for brands and companies based on measuring the unconscious behaviour of consumers. He is author of The Psychology of Price (2012) and the knowingandmaking.com blog.

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