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A strategy can be polished, approved and widely announced while employees still cannot identify the choices it asks them to make. The practical test is not whether people have seen the deck; it is whether they can explain what makes the company’s position distinctive and use it when making decisions in their own roles.
What the historical numbers say—and what they do not
Two often-cited findings suggest that strategy communication has long been a challenge, but they measure different things and should not be treated as current estimates of every workforce.
- 95%: In a 2005 article, Robert S. Kaplan and David P. Norton reported that, on average, 95% of employees were unaware of or did not understand their company’s strategy. Their article does not establish that this is a present-day, representative rate across companies. Read Kaplan and Norton’s 2005 article.
- 29%: In a study reported by Harvard Business Review in 2013, employees at 20 major Australian corporations with clearly articulated public strategies were asked to select their employer’s strategy from six options. Twenty-nine percent selected correctly. This was a specific sample and identification task, not a global workforce estimate. Read the 2013 report.
A familiar “only 5% understand” version is Kaplan and Norton’s complement-style phrasing of the 95% finding; Amy Gallo repeated it in a 2010 Harvard Business Review article. It is not a second, independent confirmation. Read Gallo’s article. These figures are historical findings, not a reliable way to diagnose a particular company today.
Why an announcement is not proof of understanding
Publishing a strategy or presenting it at an all-hands meeting establishes that a message was sent—not that employees recognized the company’s choices, understood the trade-offs or know how to apply them. A strategy describes a distinctive position, not simply a list of aspirations. If the message is generic, or if teams cannot see what it means for their work, employees may remember the slogans without understanding the strategy.
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Harvard Business School’s Institute for Strategy and Competitiveness says leaders should communicate the company’s unique position, make trade-offs, maintain discipline and translate strategic implications for each unit. It also cautions: “Leaders should not assume that subordinates understand the strategy, or that they agree with it.” See the institute’s guidance on leaders’ role.
A practical check: can people connect the strategy to decisions?
The following is a practical application of that guidance, not a validated assessment or a test proven by the cited sources. Ask a cross-section of employees to answer independently, in plain language, then compare their answers with the strategy leadership intends to pursue.
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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. Look for a specific choice, not a broad phrase such as “quality” or “innovation.”
- What trade-offs follow from it? Ask what the organization prioritizes—and what it is willing not to prioritize. If every answer is “we do all of it,” the strategic choices may not be clear.
- What does it change for this team? Ask for examples of decisions the team makes, and how the strategy should shape them. A useful answer links the company-level choice to actual work rather than repeating leadership language.
Look for patterns, not a pass/fail score. Different wording can express the same understanding; consistent confusion about the company’s position, trade-offs or local implications is a cue for leaders to explain and translate the strategy more clearly.
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Town halls and training are among the communication methods Kaplan and Norton identify, but a broadcast alone cannot make a strategy usable. Their discussion of strategic readiness also points to the need to consider whether the organization has the skills, information systems, leadership, culture, teamwork and incentives that support its strategic aims. Read Kaplan and Norton on strategic readiness.
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For example, a town hall can give a broad audience a common explanation, while training can help a group work through implications for its tasks. Neither format guarantees that managers will reinforce the choices or that processes and incentives will support them. The relevant question is whether communication reaches the people who need it, allows questions, translates the strategy into local decisions and is reinforced by the way work is organized. These are practical evaluation criteria, not a published head-to-head ranking of communication methods.
Research on how strategy becomes embedded in an organization also treats it as more than a message employees hear once. Galunic and Hermreck’s discussion of helping employees “get” strategy is further reading on that challenge.
Leadership remains accountable as conditions change
Employees should be able to use the strategy without guessing what leadership meant, but leaders own the work of making its distinctive choices clear and translating their implications across units. That work continues as conditions change: explain the choices, invite people to apply them to real decisions, and check whether teams can do so. A strategy becomes useful across the company when its meaning is clear enough to guide choices—not merely familiar enough to repeat.
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