I spent last week touring Colombia, and my week was packed with seven workshops, including a lecture to more than 250 attendees for Harvard Business Review.

Over lunch one day, I was talking with a Hewlett-Packard executive about Colombia’s new advertising campaign. You may have seen billboards with the phrase “Colombia: the only risk is wanting to stay.”

The campaign was born “as a response to the great deal of questions raised at international fairs concerning the risks involved in visiting Colombia. From there, rose the idea of facing the problem of lack of knowledge about Colombia and changing the negative perception the world could have by underlining the positive.” (Click here for details).

What a monumental task – to shape Colombia’s global identity by redefining the word “risk.” This is challenging because Colombia’s brand carries lots of unhelpful historical baggage that makes many people immediately think of drug cartels, guerillas, and kidnappings.

What I saw in Colombia’s attempt to rebrand itself immediately connected three seemingly unrelated topics I have run across over the past couple of months: narratives, identity, and competition. If we connect these then we begin to see a tool for changing our world.

Identity matters more today

There was a time when people bought products and did not care from whom they bought them. But our attention has shifted from the package in our hands to the identity of the company that put it there. We care now, for example, if the company is a good corporate citizen, how it treats workers, and what impact it has on our environment.

This sea of change is leading us to a potentially radically different world. Our corporate battle has transformed from contentions about resources and price into wars of identity. Are you an Apple or Microsoft person? Are you a Starbucks or Dunkin’ Donuts person? Are you a Whole Foods or Pathmark person?

Corporations face the same struggles that the military has faced for years – the “war of identity.” For about a decade, military thinkers have been exploring the role of identity in determining the outcome of conflicts. Why are our conflicts in Iraq and Afghanistan persisting? How does a band of unorganized individuals, without matching uniforms or even a place to meet, challenge our large, well-orchestrated military machine?

Maybe it’s because our military is having an identity crisis. A combination of Abu Ghraib Prison photos, Blackwater mercenaries, and a serious language and cultural gap has distorted the reality of these missions. But in a world where perception is everything, no one is immune to falling ill from a damaged identity.

Stories Build Identities

There are numerous books about the use of storytelling in business, but most address the way stories are used in marketing goods and services. This topic is different. It is about competition and the tangible role that a story plays in creating a competitive advantage.

Last month I spoke with Michael Vlahos, author of “Fighting Identity: Sacred War and World Change” and one of the world’s leading gurus of this emerging focus on identities. What he shared, in simplified terms, was that:

1)      Identity drives conflict: Was the U.S. Civil War really about principles of governance or was it about northern vs. southern? Is the Microsoft-Apple competition really about software or about their respective identities?

2)      Narratives drive identity: The story you tell about yourself and your company shows how you got here, why you are right, and where you are going. Stories are the vessels of our identities.

3)      Competition is often won or lost by the narratives’ leaders’ spin.

As Vlahos summarized, “Narrative is a tool. Identity is a state of mind.”

When I interview successful CEOs, I am astonished by how quickly in the conversation they begin telling the “story” of their company. Who founded them, why, what happened, what need was met, etc. I believe that this ability to craft a compelling story – a “strategic narrative” as I call it – is a fundamental tool of those who want to impact the world.

Have you clearly defined your strategic narrative? Ask yourself the questions below to see how your story can shape your company’s identity.

1.       What is your story?

2.       How did you get here?

3.    Where is the story heading?