Good Leaders Know When to Dig Deeper Than the Simple Stories

In his “Last Lecture” to the Executive MBA Class of 2025, Professor Dan Murphy of the University of Virginia Darden School of Business urged students to look beyond the appeal of simple stories and engage with the full complexity of leadership, economics and society.

“The simple stories are appealing, and we can rely on them to exert our values. But I think that as leaders, we're called to do more than that. We're called to step back,” said Murphy, the Jung Family Associate Professor of Business Administration in the Global Economies and Markets area.

Leadership Beyond Simple Narratives

Murphy reflected on the importance of leadership and management, emphasizing that effective leaders must recognize “the more complex story, the more complex set of tradeoffs,” especially when different parts of an organization or society see only a narrow piece of the whole.

A strong leader recognizes the complexity of stories and their tradeoffs, brings the organization’s norms and values to bear in weighing those tradeoffs, and guides people in pursuit of those objectives, he said.

But leadership in society, he noted, presents a different challenge. Unlike in organizations, “when you're operating in society more generally, there's no such expectation” that others share values or objectives. That requires leaders to navigate divergent viewpoints — a task made more difficult by the prevalence of simple, emotionally resonant stories that discourage critical engagement.

The Case of Minimum Wage

In describing his elective course, Markets, Government and Society, Murphy provided an example of how students often enter the classroom with a simple story in hand.

The elective examines situations under which governments can and cannot improve outcomes in a variety of contexts, such as labor, housing and financial markets.

“Now, as you can imagine, the topics in that class are often politically fraught,” he said. “People come with their own preexisting views of the world, their own preexisting values. And because there's diversity of values in the classroom, students typically want to jump in and lead with a simple story that aligns with their values.”

On the minimum wage, for instance, some students say, “We need a minimum wage based on the simple story that a minimum wage increases wages for low-income workers.”

But Murphy challenged students to go further: “When those students step back from the simple story and put their values to the side temporarily ... they actually emerge with a different conclusion, or at least a more nuanced conclusion, than they started with.”

In a competitive labor market, he explained, a minimum wage might lead to unemployment among low-income workers. But in a market where a dominant employer has power to suppress wages, a minimum wage can raise both wages and employment.

“Stepping back, what that means is your advocacy for a minimum wage based on your values, once you consider the more complex set of tradeoffs, is context dependent,” he said. “It depends. If you're in a competitive labor market, you need to look beyond a minimum wage to help low-income workers. You need to look at things like the Earned Income Tax Credit, which doesn't appeal to such simple stories. It's a little bit more nuanced. It doesn't appeal to simple political slogans.”

Murphy added: “In some sense, that's what we're called to do as leaders. That is, to step back from that simple story and consider the more complex set of tradeoffs.”

Trump's Tariffs

Murphy applied this framework to the debate around the Trump administration's tariff policies, suggesting that many support or oppose these policies based on whether they agree with the administration’s other policies.

“For example, if you support Trump's anti-DEI policies, you might tell yourself the simple story that tariffs are going to reshore manufacturing to the United States, and all is going to be good. If you oppose the Trump administration's policies, you might tell yourself another simple story, that tariffs will raise costs and be bad for consumers,” Murphy explained.

Instead of these simplified narratives, Murphy encouraged a nuanced evaluation of trade policies by considering the complex tradeoffs involved.

He highlighted two main benefits of trade: comparative advantage and variety of products. These benefits must be weighed against other objectives such as redistributing income, redistributing jobs and enabling people working in middle America to have “decent, stable jobs.”

Murphy argued for separating values from analysis, at least temporarily, to understand the real tradeoffs involved in tariffs. He drew on recent estimates from economists in Switzerland, including former Darden faculty member Kieran Walsh, who projected that the proposed tariffs would reduce U.S. GDP by nearly 2%  over the next couple of years.

“That has to be weighed against the fact that there are massive distributional implications. In other words, a lot of sectors benefit tremendously, while others see the big hit. So, if you work in manufacturing or textiles, you do a whole lot better, perhaps not surprisingly.”

Thinking about the complex tradeoffs might go something like this:

“If you value the average American worker, regardless of what sector they're in, then you might say, you know what, I don't want to see a shrinking of the pie. If you place a high preference on people that work in places that have been decimated by the decline in manufacturing, then you might say, you know what, I'm willing to see the pie shrink so that there's a reallocation of the pie for some people. And in fact, some people actually get more pie overall. That depends on your values.”

Simple stories — such as telling ourselves that tariffs will reshore jobs and restore jobs in the Rust Belt — don’t account for the complexities and realities of today’s labor market where the jobs of today and the jobs of the future are heavily automated.

“You could reshore manufacturing, but you don't need that many jobs to manufacture in today's economy. And going forward, that's going to be even less likely to be the case,” said Murphy.

“The simple story we can tell ourselves is that trade with China emerged, and that's what decimated manufacturing. So, all we have to do is reverse this. We can reverse trade, and we'll get back to where we were,” he added.

“But if you want to go back to the economy of the 1950s then you're basically going back to an economy where we have old technology, old manufacturing jobs, and you might want that, but you have to acknowledge the rest of the world is going to go with the automation and technology of the future. So, we can't go back to the 1950s where we both have lots of jobs in manufacturing and we're also at the frontier of the global economy.”

Leadership in a Polarized Society

Murphy concluded by addressing the broader challenge of polarization in American society.

“We live in a world of diverging values, which has led to a diverging set of facts and realities,” he said. “As leaders of an organization, or in society, more generally, you're asked to moderate the very human impulse to embrace the simple story that affirms our beliefs, values and preferences.”

The solution, Murphy suggested, begins with the shared value of mutual respect.

“If we have values of mutual respect in mind, then we'll be less quick to make decisions based on our other more idiosyncratic values or based on simple stories,” Murphy said. “Rather, mutual respect requires that we consider nuanced tradeoffs and how our decisions affect others.”

He conceded this “might sound like an overly naive remedy for a complex set of social challenges” but argued that it can still be a start.

Murphy is positive based on his experience in the Darden classroom where students “come from a diverse set of backgrounds with diverse views and values” yet “develop a shared language through which to evaluate complex tradeoffs.”

He concluded with optimism: “Good leadership is contagious. If you continue to model this behavior outside of Darden, slowly but surely, your example will be one that others notice and emulate.”

The Last Lecture tradition is an opportunity for faculty to step back and share personal reflections and lessons that go beyond the classroom. Listen to Professor Dan Muphy’s full presentation.