Commerce and business have always been based on trust and storytelling. Business and public administration could not have existed without trust. It is our belief in the future that makes it possible for banks – and indeed the entire social economy – to survive and flourish. This trust is the actual basis for all global trade and cash flows.

 

The cognitive revolution

In his trilogy, Harari continually returns to the fact that international trade is based on trust in fictional objects such as currency, central banks and business logos. It all started with the cognitive revolution 70,000 years ago. This was when Homo Sapiens gained the ability to tell about things that only existed in their imagination: fictions. Based on this, Homo Sapiens won the race to develop, because we were able to build and create communities based on a common belief among far more individuals than previously.

 

Good stories provide power

It is the imagination of the collective, the ability to believe in something that is purely imaginary, that has helped to ensure that Homo Sapiens have dominated development. The individual or individuals who had and have the ability to tell good stories consequently gain power. Harari refers to this as culture-building, and it is this development that has subsequently become our history.

The theory behind the cognitive revolution is known as The Gossip Theory. According to researchers, ninety percent of all human communication is based on storytelling. Unlike animals, human beings then evolved to be able to convey information about things that don’t actually exist. These can include religions, nations, legal frameworks and corporations, and even human rights. If you would like to read more about these extremely interesting observations, I recommend Harari’s first book, Sapiens.

 

We need to have insight into our basic instincts

To understand how Christianity evolved or the reasons behind French Revolution, for example, it is not enough to understand the interaction between genes, hormones and organisms. It is also necessary to take into account the interplay between ideas, impressions and imaginations, explains Harari. Even today, our brains and minds are adapted to a life based on hunting and harvesting. Our eating habits, our conflicts and our sexuality are all a result of the way our hunting and harvesting instincts interact with our current post-industrial society, the big cities, aeroplanes, mobile phones and computers. In order to understand that we still feel alienated, become depressed and stressed, despite our material possessions and a longer life expectancy, we need to take an in-depth look at our basic instincts, according to evolutionary psychologists.

 

Emotions = Biochemistry

Our mental and emotional world is governed by biochemical mechanisms that have been shaped over millions of years of evolution. According to Harari, our subjective state of mind is not governed by external things such as wages and political rights. It is determined by complex systems of nerves, neurons and various biochemical substances such as serotonin, dopamine and oxytocin. Consequently, events such as winning the lottery, buying a new house, being promoted or finding love do not create happiness. People only become happy as a result of one thing: chemical reactions when different hormones flow through our body and electrical signals trigger various parts of our brain. Biologists are not super-fanatical, however; they recognise that psychological and sociological factors also play a role, but biochemistry is the most important factor.

 

Storytelling and reality: the only thing worth anything is what you are known for

Unlike animals, humans live in a three-part reality. In the ‘double’ reality experienced by animals, they perceive objective items such as trees, rocky outcrops and rivers in combination with subjective experiences such as fear, joy and need. Our three-part reality also includes narratives about money, gods, nations and various operations such as companies and organisations. As our history played out, the effects of gods, nations and various businesses grew at the expense of rivers, trees and basic needs. There are still many rivers on our planet, and our actions are still motivated by what we fear or dream of, but Harari points out that Jesus Christ, the French Republic, Apple Inc. and Arsenal Football Club have taken advantage of the rivers and forests at the same time as shaping our deepest worries and desires.

 

From Stone Age to Silicon Age

Digitalisation is likely to make storytelling even more powerful, but in order to succeed, we have to understand how narratives about Jesus, France, Apple and Arsenal have become so influential. Our history gravitates around a network of such storytelling. Our basic skills have not changed significantly since the Stone Age, but the networks of different narratives have grown stronger and stronger and characterised our history from the Stone Age to our Digital Age.

It all started with the cognitive revolution some 70,000 years ago, which allowed Homo Sapiens to tell stories about things that only existed in their imagination. Nowadays we have companies such as Equinor and Svenska Enskilda Banken, which are legal entities that own property, lend money, hire people and develop economic enterprises. In ancient Egypt, and in particular Babylon, there were pharaohs and gods who acted as legal entities that could own land and slaves, give loans, pay wages and build large dams and canals.

Without generally accepted narratives and descriptions of items such as money, nations and businesses, it is impossible, according to Harari, for complex human societies to exist. Arsenal are only able to play football because everyone believes in and accepts the rules drawn up by FIFA. And we can only get excited about Apple launching yet another new iPhone or feel safeguarded by a legal framework thanks to similar and credible narratives. Yet these narratives are just tools, and Harari is clear that they should not be an end in themselves. If we forget that the narratives are just fiction, we lose touch with reality. We are then inviting conflicts in order to ‘make the most money’ for the company we are working for or to ‘defend national interests’ on behalf of the country we govern.

 

Private businesses, money and nations only exist in our imagination. We invented them to serve us. How is it that we now put our lives in their hands?

Yuval Noah Harari

 

Very well, you say: what does this have to do with branding?

The difference between a trademark and a brand is nothing more than emotion

I believe that branding must be based on the fact that we as consumers have not only functional, but also emotional and social needs. In my experience, an overwhelming share of the marketing out there revolves around talking about functional needs. Experience is the easiest and cheapest way to market yourself, but definitely not always as effective. And it definitely does not aid positioning. In order to cover emotional and even more challenging needs, such as social needs, we have to understand that which biologists highlight as the causes of happiness.

 

Organisms, emotions and algorithms

Science has documented the fact that emotions are not some mysterious spiritual phenomenon that can be useful when writing poetry or composing music. Emotions arise on the basis of complicated algorithms. If we want to understand life and the future, we need to do our best to understand what an algorithm is and how algorithms are intertwined with our emotions.

 

Algorithms = Formulas

It is the formulas, i.e. the algorithms, which make the large volumes of data relevant. The available data helps businesses to understand user needs and behaviours so that they can identify what to offer in the future, how to package it and to whom. The algorithms that are developed consequently allow them to tailor and personalise their dialogue with the market. Against this backdrop, however, it is just as important to use the algorithms that control us as people. In recent decades, biologists have documented the fact that these algorithms work through experiences, emotions and thoughts. Nobel Prize winners in economics base very few of their decisions on pencil, paper and calculator.  As much as 99 per cent of our decisions – including the most important choices in our lives, such as our choice of spouse, career or home – are made on the basis of the highly refined algorithms that we can call experiences, emotions and dreams.*

*Daniel Kahneman, Thinking, Fast and Slow, 2011, and Dan Ariely, Predictably Irrational, 2009.

 

Everyone has their own attractiveness pyramid with a small handful of brands

My personal attractiveness pyramid has five levels. At the bottom are all the utility providers, such as banks, mobile phone networks, broadband providers, etc. My contact with them is restricted to a monthly review of my bill, and it’s hard for them to differentiate themselves. On the next level up you can find shops, gyms and perhaps a craft business or two. I’m not overly enthusiastic here either, and I’m not particularly loyal. The third level is home to sports equipment manufacturers and all of my gadgets. I will happily pay twice as much for a box from Apple than for the equivalent from other PC competitors. One down from the top, on the fourth level, we find the car showroom. For me, this is all about Audi. Sitting at the very top of my attractiveness pyramid is Arsenal. If they had been selling power with that logo, I would certainly have been willing to pay well for this too.

The point is that brands are like friends: you have strong ties to them. You don’t have that many close friends, but you experience strong ties that connect you. My advice is not to believe you can be something for everyone. Rather, try to be everything for some people and rely on a good and enhanced brand narrative in all channels. It is then possible to become part of people's lives: their experiences, emotions and even their dreams.

Your brand is the sum of what people think about you, every time they experience it. You could call it a “gut feeling”. The mechanisms behind influencing this feeling – building and managing a brand – remain the same today as they have always been, but digitalisation and other technology are creating far more opportunities in a more fragmented and complex universe of channels.

When the entire Western world associates Volvo with the key word “safety”, it is because ever since 1928 the Group has consistently focused all product development on making its cars safer. When you put 350 horsepower under the hood of a Volvo, it becomes safer. The storytelling and advertising message enable Volvo to provide entirely generic properties with added value that aids positioning.

 

Belief creates community

Today, Donald Trump and Brexit are expressions of the fact that a tidal wave of disillusionment has reached important liberal nations in Western Europe and North America. Many voters here have discovered that they do not want to give up their racial, national and gender rights. Others have concluded, rightly or wrongly, that liberalisation and globalisation are major forces that give power to a small elite at the expense of the masses.

In 1938, we had three global narratives to choose from, explains Harari. Nazism, communism and liberalism. In 1968 we had only two. In 1998, only one single narrative seemed to survive: liberalism. In 2018, we had dropped to zero global narratives. No wonder that the liberal elite who have dominated large parts of the world for decades are shellshocked and disorientated. Not having any narratives all of a sudden is frightening.

 

A few practical definitions

Culture defined: Artificial instincts that make it possible for millions of strangers to collaborate effectively. Such a network of artificial instincts is known as “culture”.

Belief in the future defined: Credit: this makes it possible to build the present at the expense of the future.

Emotions defined: Emotions are not the opposite of rationality: they embody evolutionary rationality.

Storytelling defined: The foundation and pillars of a human society

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