Here is an excerpt from an interview of Peter Guber written by Mike Hofman for Inc. magazine (March 1, 2011). To read the complete article, please click here.

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In his new book, Tell to Win: Connect, Persuade, and Triumph with the Hidden Power of Story, the Hollywood producer and CEO of Mandalay Entertainment addresses the importance of storytelling in business.

Persuasive talkers tend to do well in business, and yet we don’t typically think of storytelling as a professional discipline. Hollywood producer Peter Guber is on a crusade to remedy that. In his new book, Tell to Win, the CEO of Mandalay Entertainment takes a look at the way people use stories to do business. He spoke with Inc.com‘s Mike Hofman.

Your book looks at the power of purposeful stories. So, what exactly is a purposeful story?

A story you tell with a specific purpose in mind. So when you tell a joke, you want to make someone laugh, or if you tell a story about someone who had a heart attack, it may be because you want the listener to exercise. Stories are tools to create social cohesion and to get humans to strategize together.

You believe the best stories are interactive. How so?

You have to try to engage an audience. You cannot just talk at them; you have to talk with them and modify your story as you tell it, based on their feedback. If you do this successfully, your listeners are more likely to metabolize the information you wish to convey, to change behavior, and to repeat your story to others.

OK, so how can someone in sales or marketing turn a garden-variety pitch into a purposeful story?

It’s so simple, it’s embarrassing, and yet a lot of people overlook the basics. First, when you walk into a room to sell a product or pitch an investor or whatever, you absolutely have to know what your intention is. What do you want from your listeners? You have to understand your objective and be transparent about it in order to establish trust. Second, you have to figure out a way to capture your listeners’ attention. It can be a physical movement or asking someone about the pictures on his desk in a way that builds mutuality. Finally, the goal of your story must be to show what is in it for the listeners. The audience must win.

You teach at UCLA. Do your students have well-honed storytelling skills?

No. Most young people haven’t used their storytelling skills since they were 8 or 9 or 10 and wanted to persuade Mom and Dad to take them to the ball game.

Was there a moment in your business career when you suddenly realized the power of storytelling?

There was a series of moments that I could look back on—I could follow the bread crumbs—and all of them involved my failures.

So I started to wonder why I had failed in some instances when I had succeeded in others. And I realized that I failed when I neglected to tell a purposeful story to the audience or to my employees or to my shareholders. I looked inside myself and saw what had worked for me.

Who are the best storytellers in the business world? Peter Guber offers these examples.

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Mike Hofman is the editor of Inc.com and a deputy editor at Inc. magazine, which he joined in 1996. The site was nominated for a National Magazine Award for Digital Media in 2010, and was named the best business website by Folio magazine. In 2006, Hofman was part of a team of writers nominated for a Webby Award for best business blog. He lives in New York City.