As humans, we are hardwired to organize our thoughts through stories. 

Which makes storytelling a powerful business tool. Telling a good story can help you connect with your audience on an emotional level. It can make complex data easier to digest, and make your arguments more persuasive.

So how do you tell great stories, particularly great business stories? Here is some advice from Kellogg faculty.

1. Get Your Stories Straight

There are many business situations that call for a good story. But you need the right one for the right occasion.

Craig Wortmann, a clinical professor of innovation and entrepreneurship at the Kellogg School and author of the book What’s Your Story?, identifies four types of stories all business leaders should have on hand: success stories, failure stories, funny stories, and stories of legends.

When told at the right time, these stories can show character, reveal your ability as a leader, or demonstrate your drive.

Choosing the best story for a given situation, however, is less intuitive than it seems. If you are in an interview with a potential client, you might tell a story of failure instead of one of success. “By doing this, you show that you’re humble, that you’re a learner, and that you’re good to work with.”

On the other hand, success stories are useful once you have landed a client, but are still earning their trust. As you onboard the client, sharing how you helped another client through that same process can reinforce their sense of confidence.

Wortmann knows a CEO who tells a particular “funny failure” story to reinforce the importance of asking questions upfront.

The CEO relates how he once spent an entire summer cultivating a giant, once-in-a-lifetime opportunity through a contact at a global consumer-packaged-goods company. On their fourteenth phone call, he grew impatient.  When he finally asked his contact when her company would be signing the contract, she informed him that she was an intern.

“She thanked him for all she had learned that summer,” Wortmann says.

2. Know Your Own Story

Beyond anecdotes, leaders need to master their own big-picture story—who they are and what they stand for—explains Michelle Buck, a clinical professor of leadership.

“When leaders have that sense of purpose in their story,” she says, “that transmits or translates to the people whom they are leading as well and makes the work much more engaging, therefore more productive, possibly more innovative, and ultimately, more profitable as well.

These stories also provide leaders with a sense of agility.

“We’re living in a constantly changing environment,” she says. “You have to be able to access what matters most very, very quickly.” And knowing your story helps you do that.

3. Telling Stories with Data

There are times when your story—or your business’s story—needs to be told through data. And when that happens, please do not hand your audience a spreadsheet; you need to think visual.

“If you are not using visualizations and you feel like it’s sufficient, it might be overconfidence,” explains Steven Franconeri, a Northwestern professor of psychology with a courtesy appointment at Kellogg.

Data visualizations are crucial, he says, because forty percent of our brain is devoted to visual processing. Once upon a time, that helped us spot a lion lurking behind a bush. Now it can be harnessed to get your boss to approve your marketing plan, or your employees to buy into a new incentive program.

Telling stories with data can be hard. So Franconeri advises taking your visualizations for a test drive. Create a few different types—say, a bar graph, a line graph, and a scatter chart—and do a few iterations within those styles. Then show them to some friends and colleagues and ask what story they see.

“Just imagine a simple line graph generally going up but with a few bumps in it,” Franconeri says. “Just when you show something like that, there are several stories that people could be seeing in that: the fact that there are two bumps, the fact that it’s going up in general, the fact that the acceleration goes down a little bit, that the growth seems to be diminishing.”

Franconeri stresses that even senior leaders need to understand the fundamentals of storytelling through data visualization.

Your art department can make the visualization look good, but they can’t make it tell the story that you want,” he says. “You are the person who knows what’s important in the data. You are the person who knows what everyone else in the room needs to know and what actions they should take.”

4. The Power of the "Stupid" Story

When finance professor Mitchell Petersen gives advice on how to communicate complex ideas, one of the tools he stresses is stories.

“There are no cultures that I know of that don’t tell stories,” Petersen says. “It’s fundamentally part of what it means to be human.”

These stories can become tangible shorthand for very abstract concepts. An elaborate story about a Coca-Cola investor swapping shares with first a Pepsi investor, then an orange-juice investor, next a peanut-butter investor, and finally a tractor investor, might vividly encapsulate the benefits of an otherwise nebulous concept like diversification.

When thinking up stories, do not be afraid to channel the ridiculous.

“The dopier the story, the more people may groan—but years later they remember it,” Petersen says. “I will meet people 5, 10, 15 years after and they do not remember the specific data, but that stupid story I told them years ago has rooted itself in their brain.”

5. Using Stories to Fundraise

Crowdfunding has become a powerful tool for nonprofits and fledgling entrepreneurs.

To harness that power, make sure you tell your story well, explains Liz Howard, a clinical professor of management.

“The most valuable aspect of crowdfunding is actually getting the story out there,” she says. “This is something that is often overlooked. Narrative is critically important, because the story is what differentiates one initiative from another.”

For people to donate or spread the word about your efforts, the story behind the campaign has to resonate immediately.

“A compelling story, when it’s shared, has the potential to have a tremendous impact,” Howard says.