Good stories arise out of what the characters do. Bad stories result when you decide on a plot outcome first and then manipulate the characters’ behaviour to reach that goal.
Showrunner Peter Gould explains how it works on Better Call Saul. And that’s the writers’ room on a TV show, where you might think they can just make the characters do whatever the plot demands. Not on a good TV show, they don't. So if you’re running a roleplaying game and you’re defining a story goal and only then going through the motions to get there, you’re not roleplaying, you’re writing – and you’re not even getting writing right.
I’ve talked before about stories as a cascade of events, the same way a series of gravitational tweaks to a ball’s velocity leads to a parabola. This was what I was trying to do with Dreams at Elixir Studios. Designing from the top down is entirely the wrong way to go about it.
(Incidentally, designing a game like that using grown-up characters in a modern town was also the wrong way to do it. The player's expectations of how human-like characters ought to behave are too high. If you want a story-creating game, start with simple animal characters and stories like you’d find in Farthing Wood. That’s my Figments concept, but let’s talk about that some other time.)
How do you encourage that cascade of events? I think the best stories arise when the rules themselves don’t address story as a goal. Take care of the details and the story will take care of itself. A good simulation system is the best narrative game.
The proof? Look around you. It’s all just physics. Real life has no story-creator processes going on at the level of the engine. Yet here’s the universe doing drama very well indeed – sometimes a little too well, as when a preening bully whips up a riot because he can’t accept he lost a fair election – and all of that is just because everyone’s acting in the moment.
I grumble about GURPS. It’s even a tag on these posts. But it’s like finding fault with an old friend. Many of our best games have sprung spontaneously out of those mechanics, which might look dry on the page but are fertile soil for stories. Like nuclear fission, GURPS if used responsibly will do whatever you need.
Maybe you’ve been put off trying GURPS because it has the reputation of being complicated? (It’s easier than physics, believe me.) The books cover everything, but you’re meant to pick the parts you need for your campaign. Admittedly I’ve lost track of the number of times I’ve said to players, “We are using just the basic books, no mental disadvantages, no quirks or perks,” only to have them come back with some skill they found in a supplement. Be firm and it’ll work. Start off with GURPS Lite (which is free) and take advice from The Path of Cunning, a fine fanzine (also free) published by Roger Bell-West and John Dallman.
That and imagination are all you need, and the stories will take care of themselves.