What is Business Strategy? 95% of People Don’t Know


What is business strategy?  Let's find the key...

According to an article from Robert Kaplan from the Harvard Business Review, 95% of employees are unaware of, or don’t understand their company’s strategy (source).


Does this statistic surprise you? I once asked a colleague who had had the word “strategist” in their title how they defined strategy. The response was “can I get back to you on that?” This person is not an example of a low performing employee, it's an example of the norm.


We’ll cover why business strategy is difficult to grasp by reviewing prominent definitions from BCG and Peter Drucker. We'll examine why standard definitions don’t get us very far on our journey to become better at strategy. Next we’ll cover McKinsey’s view on strategy, which points us in the right direction. We'll end with an example featuring Southwest, demonstrating the strategic mindset in action.

Why is strategy so troublesome to grasp?

From personal experience, I would say the main culprits are the following: 1) Embarrassment: You and I would both be ashamed to admit we don’t know what strategy is all about.

2) Most business positions don’t care about strategy: Sure, every role purports to desire a “strategic thinker,” but the inevitable demands of day-to-day needs put strategy by the wayside. Many people think strategy belongs at the CEO level, not in their entry level or middle manager world.


In addition to the above, getting a sound apprehension of strategy is no easy feat. It requires a lot of that deep, energy sapping System 2 thinking that Daniel Kahneman described in his book, Thinking Fast and Slow. Abstruse definitions abound, but they don’t help us much either.

Even strategy definitions from Michael Porter and Boston Consulting Group are unable to adequately define strategy