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A strategy can be polished, approved and presented to the company without becoming useful to the people making everyday decisions. The real test is not whether employees have seen the strategy deck; it is whether they can describe the company’s distinctive choices and apply them in their work.
What the historical evidence says—and what it doesn’t
Two often-cited findings point to a gap between leadership’s strategy and employees’ understanding, but they measured different things and should not be treated as current estimates for every workplace.
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- In 2005, Robert S. Kaplan and David P. Norton reported that an average 95% of a company’s employees were unaware of or did not understand its strategy. Amy Gallo later repeated the related formulation that only 5% understand it. These are historical, author-reported figures; the cited material does not establish a contemporary workforce-wide rate or provide a detailed sampling method in its visible text. Kaplan and Norton, “The Office of Strategy Management” (2005); Amy Gallo, Harvard Business Review (2010).
- A separate study asked employees at 20 major Australian corporations with clearly articulated public strategies to identify their employer’s strategy from six choices. In that specific task, 29% answered correctly. That result, reported by Harvard Business Review in 2013, describes that sample and identification exercise—not employees globally.
The numbers cannot be blended into one rate: one is a historical estimate of awareness or understanding, while the other is the result of a defined multiple-choice identification task. Together, they are a reason to check understanding rather than assume it.
Why an announcement is not enough
Employees may hear a strategy explained and still be unsure what it means for their own team. A broad statement of ambition does not necessarily communicate the company’s unique position, the trade-offs it accepts, or which choices should follow from those commitments.
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Harvard Business School’s Institute for Strategy and Competitiveness says leaders need to communicate the company’s unique position, maintain discipline around its choices and translate the implications for each organizational unit. Its guidance is explicit: “Leaders should not assume that subordinates understand the strategy, or that they agree with it.” The Role of Leaders.
That makes strategy communication a leadership responsibility, not a problem employees should be expected to solve by decoding corporate language. A clear explanation should make the choices vivid and show what they mean at the level where work is planned and decisions are made.
A practical check: can teams connect choices to decisions?
The following is a practical exercise derived from the leadership guidance, not a validated test. Ask people to answer in plain language, ideally without reading from the strategy deck:
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- What is our distinctive position? Ask what the company chooses to do for customers and how that differs from its alternatives.
- What trade-offs follow? Ask what the company will prioritize—and what it will not prioritize—to support that position.
- What does this change for our team? Ask for examples of decisions, priorities or ways of working in the unit that should reflect the strategy.
Look for a connected explanation, not identical wording. If people can repeat the company’s slogan but cannot link its choices to a decision their unit makes, the strategy has not yet been translated into practical guidance for that work.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.Pair communication with organizational support
Town halls and training can help explain strategy, but communication is only one part of making an organization ready to carry it out. Kaplan and Norton also point to the need to consider whether skills, information systems, leadership, culture, teamwork and incentives support the strategy. Their discussion of strategic readiness includes town halls and training as possible communication methods, rather than as a universal solution. “Measuring the Strategic Readiness of Intangible Assets” (2004).
When choosing how to communicate, consider the job each method needs to do:
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- Reach: Will the intended people actually receive the message?
- Questions and feedback: Can employees surface confusion or disagreement?
- Local translation: Does the format help teams connect the strategy to their own decisions?
- Reinforcement: Do managers, systems and incentives support the same priorities?
These are practical comparison criteria, not a published head-to-head ranking of communication methods. The useful approach depends on what employees need to understand and where the organization’s translation is breaking down.
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1Clear out junk files and repair common Windows errors2Fix the driver behind crashes, sound loss and screen glitches3Repair Windows errors before they cause bigger problemsKeep checking as work and conditions change
Understanding is not established by publishing a document or holding a launch meeting. Leaders need to keep explaining the company’s strategic choices, clarify what those choices mean for individual units, and check whether teams can use them as conditions change. Strategy becomes actionable when employees can connect the company’s position and trade-offs to the decisions their roles actually make.
For broader context on embedding strategy in organizations, see Charles Galunic and Immanuel Hermreck’s “How to Help Employees ‘Get’ Strategy”.
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