And here’s the uncomfortable part: the exit interviews are not telling you why.

They say “better opportunity.” They say “career progression.” They say “work-life balance.” These are real, and they are also incomplete. Underneath every one of those explanations sits a question that most departing employees are too polite to say:

What exactly am I building here, and why should I believe it will matter in five years?

If your strategy cannot answer that question in plain language, your retention problem is a strategy problem. Full stop. No amount of compensation adjustment, engagement surveys, or employer brand campaigns will fix it.

Let me show you why, and more importantly, what to do about it.

What your best people actually need from you

The research on employee motivation has been converging on the same answer for decades. Daniel Pink synthesised it in Drive. Deci and Ryan built the empirical foundation in self-determination theory. Beyond a threshold of fair compensation, three things drive engagement: purpose, autonomy, and mastery. The work matters. I have agency over how I do it. I am getting better at something valuable.

This is important: your strategy determines whether your firm can deliver on any of these.

Think about what happens when your strategy is organised around three or four long-term structural changes happening outside your firm. Say you are building around the shift to automated distribution, the growth of emerging markets, and the transition to sustainable supply chains. Purpose becomes obvious: we are positioning this firm for the next decade of change, and your work is part of that. Autonomy becomes possible: if you understand what we are building around, you can evaluate decisions yourself without escalating every choice to your manager. And mastery becomes directional: the skills you are developing are aligned to where the world is heading, which means they appreciate over time.

Now think about what happens when your strategy is organised around cost reduction, operational efficiency, and quarterly earnings targets. Purpose becomes “hit the number.” Autonomy disappears because there is no strategic logic to guide decisions, so everything gets escalated. And the skills you are developing serve the current operation, which may not be the one that matters in five years.

Which firm would you stay at?

The Nokia warning

When INSEAD researchers Quy Huy and Timo Vuori studied Nokia’s decline, they found something the market narrative had missed entirely. The conventional story was that Nokia failed because Apple’s technology was better. Huy and Vuori interviewed 76 Nokia managers and engineers. What they found was a culture of fear.

Middle managers were afraid to deliver bad news because senior leaders had a reputation for impatience with anyone not delivering results. Senior leaders were afraid of external competition and of missing quarterly targets. Fear flowed in both directions, and information stopped moving upward. Strategic problems were hidden rather than solved.

Here is what that meant for talent. Nokia’s best engineers knew that the Symbian operating system was inferior to what Apple was building. They could see the shift happening. But the internal culture gave them no way to act on what they saw. No framework connecting their expertise to a strategic response. No confidence that raising the alarm would produce anything other than punishment.

The people closest to the problem had the clearest view of the solution. The organisation ensured that view never reached the people who could act on it.

Let’s be very clear: this is what happens when strategy is organised around internal metrics rather than external changes. The direction of your leadership team’s attention shapes your culture. And your culture determines whether talented people stay, speak up, and contribute their best thinking, or leave, stay silent, and protect themselves.

Nokia’s annual reports across 20 years confirmed the pattern. More strategic language devoted to financial management and workforce administration than to any growth-oriented external change. The institutional voice mirrored the fear culture that Huy and Vuori documented. Nokia went from 56% of its industry’s profits to 7%. Not because it lacked talented people. Because its strategy and culture made those people unable to do what they were capable of.

You might be thinking, “That’s an extreme case. We don’t have a fear culture.” Maybe not. But ask yourself this: when was the last time a mid-level manager in your firm told the leadership team something they didn’t want to hear about the strategy? If you cannot remember, the culture may be quieter than Nokia’s but the effect is the same. Your people are not contributing what they know. Some of them are leaving instead.

What the opposite looks like

When Paul Polman arrived at Unilever in 2009, one of his first acts was to abolish quarterly earnings guidance. The signal to investors was clear: short-term targets encourage bad decisions. But the signal to Unilever’s 128,000 employees was equally important: this firm is playing a longer game, and your work is part of something that compounds over years, not something that resets every 90 days.

He then launched the Sustainable Living Plan, making sustainability the organising logic of the entire company. A brand manager in Jakarta developing a new product could connect her work to a direction that was structural, visible, and growing. A supply chain manager in São Paulo evaluating suppliers could apply a clear criterion without escalating the decision.

The strategy created both the purpose and the autonomy that drive retention. Over Polman’s ten-year tenure, Unilever delivered 290% shareholder return whilst consistently ranking among the most attractive employers in its sector.

Genuine Parts, the auto parts distributor that captured 48% of its industry’s profits, is a less glamorous but equally powerful example. Its investment in warehouse automation, digital ordering, and global expansion gave 60,000 employees a trajectory they could see and contribute to. A warehouse technician learning to operate robotic picking systems was developing skills that would be more valuable each year as automated distribution accelerated. The strategy made the work feel directional rather than repetitive.

So what do you do about it?

Three things. And you can start all of them this week.

First, test your strategy for clarity. Find ten employees at random, across different levels and functions, and ask them to describe what the firm is building around and why it matters. No corporate jargon allowed. If they can do it, your strategic narrative is working. If they cannot, you have found the root of your retention problem.

Second, build the employee story. Your strategy needs a version that answers three questions for every employee: what is changing in our industry and why does it matter? How is this firm positioning itself around those changes? And what does that mean for my role, my skills, and my career over the next three to five years? I wrote about the five-stories framework in an earlier piece. The employee story is the version most firms never write. Write it.

Third, make the connection between individual work and strategic direction visible. Not once a year at a town hall. Constantly. When you explain a restructuring, connect it to the external changes you are building around. When you announce a hire, explain how it strengthens your positioning. When you review performance, ask whether the work served the direction. The firms in my research that maintained their strategic commitment over decades did not just have better strategies. They were places where the work had a visible trajectory, where individual decisions connected to a larger logic, and where the skills being developed pointed toward a future that was growing rather than shrinking.

What next?

Your best people are not looking for a better package. They are looking for a better answer to one question: what am I building here, and why should I believe it will matter?

If your strategy can answer that in plain language, you have a retention advantage that no competitor can buy. If it cannot, the exits will continue, and the exit interviews will keep telling you everything except the truth.

You know what to do. Start this week.

Read it as if you had never seen it before. Read it as an investor deciding whether to hold, or as a new employee trying to understand what the firm is building and why. Then ask these ten questions.

Each one is drawn from my research across 8,430 companies that identified what separated the firms that captured dominant profit share from the well-managed competitors that did not. The questions are ordered from the most basic (does the strategy look outward?) to the most demanding (would it survive a crisis?). Score your strategy honestly. A strategy that addresses all ten is rare. A strategy that answers fewer than four has a structural problem that no amount of good execution can fix.

1. Does your strategy name specific changes happening outside your firm?

“The world is becoming more uncertain,,” or “Our industry is evolving” doesn’t cut it. We are looking for specific, named changes: the shift to electrification of vehicles, the ageing of the developed world’s population, the rise of AI-enabled automation in manufacturing. Changes that are observable, measurable, and independent of whether your firm participates in them.

Most strategies describe what the firm will do. The firms that dominated their industries described what was changing in the world and then explained how the firm was positioning itself in response. If your strategy reads like a plan for self-improvement (grow revenue, reduce costs, improve efficiency), it is answering the wrong question.

2. Are those external changes structural?

A structural change has been growing for a decade or more, across economic cycles. Cloud computing qualifies. The metaverse, as conceived in 2021, does not. The three tests that separate a structural shift from a passing trend are: has it been growing for ten years, does it affect multiple industries, and can your firm allocate capital and talent against it? If an external change your strategy leverages fails any of these, it may be real but it is not something to build around.

3. Can you count the number of changes your strategy is built around on one hand?

The firms that dominated their industries organised around three or four external changes. One or two is too vulnerable if it gets disrupted, and ten isindistinguishable from having no priorities at all. If your strategy leverages five or more five external changes, it has not made the hard choices about which ones to commit to. If it leverages none, it is organised around internal priorities, which is a different problem entirely.

4. Can you draw a straight line from each external change to a specific capital allocation decision?

This is where most strategies fail. The external changes are named, sometimes even described well, but they sit on a superficial level and never connect to spending. Somewhere between the environmental scan and the budget, internal priorities take over. Revenue targets, cost programmes, and competitive responses absorb the capital, and the external changes become context that was noted but never acted on.

Test it concretely. Pick one of the external changes your strategy leverages. Can you point to a budget line, an acquisition, a hiring decision, or an investment programme that exists because of that change? If you can, the change is shaping decisions. If you cannot, you may have a problem with alignment.

5. Does your strategy describe what is changing in the world, or what the firm will do to itself?

Read the language carefully. “We will invest in digital transformation” describes the firm. “Consumer ordering behaviour is shifting permanently to digital platforms, and our distribution infrastructure must be rebuilt around that shift” describes the world and then explains the firm’s response.

The content analysis of 120 annual reports showed this distinction with unusual clarity. The firms that captured dominant profit share used language oriented toward external changes: computational technologies, consumer culture, globalisation. Their competitors used language oriented toward internal operations: cost structures, workforce management, financial engineering. Both were describing their businesses. Only one orientation predicted who would win.

6. Could a new employee read your strategy and make a decision based on it by the end of the week?

This is a communication test, but it is also a precision test. A strategy that says “we are committed to innovation and customer excellence” gives nobody a decision criterion. A strategy that says “we are organised around the shift from combustion to electric powertrains, and every product decision should be evaluated against whether it strengthens our position on that shift” tells a product manager exactly what to prioritise.

My CEO storytelling research note explored this in depth. Steve Jobs’s “PCs are going to be like trucks” gave every engineer at Apple a filter for evaluating proposals. If a project served the post-PC world, pursue it. If it served the old one, deprioritise it. Your strategy should function the same way.

7. Does the same strategic logic appear in what you tell employees, investors, and customers, or do you tell each audience a different story?

Different audiences need different versions of the same story, but the underlying logic should be consistent. Employees hear about how the external change shapes their roles and opportunities. For investors, the story connects those same changes to long-term returns. Customers need to see why the positioning makes the firm a better partner as the market evolves. If the employee story promises job security whilst the investor story promises headcount reduction, the strategy will lose credibility the moment the two audiences compare notes.

8. Can you name who is accountable for each strategic objective?

This has to be a named individual with the authority to allocate resources and the responsibility to report progress. My research showed that the firms which sustained their strategic commitment over decades did so because accountability sat with senior leaders who owned the strategic response personally, not with support functions that managed programmes on behalf of the leadership team.

If you cannot name the person accountable for each objective, the ownership architecture is either missing or invisible, and either one produces the same result: nobody feels responsible, and the strategy fails.

9. When did your strategy last cause you to stop doing something?

A strategy that only adds priorities is a wish list, not a strategy. The discipline of committing to three or four external changes means actively excluding the rest: killing projects that do not serve the direction, declining acquisitions that do not strengthen the positioning, reallocating resources away from activities that are good ideas but misaligned.

If your strategy has not caused your firm to stop doing something in the past twelve months, it is probably not constraining decisions, which means it is not organising them either.

10. Would your strategy survive a bad year without being abandoned?

This is the hardest test. When results disappoint, when a competitor makes a move, when the board asks difficult questions, does the leadership team return to the external changes and reaffirm the direction? Or does it pivot to cost-cutting and operational language, abandoning the strategic logic at the first sign of pressure?

The superfirms in the research maintained their strategic emphasis across 20 years of disruptions, recessions, and competitive crises. That discipline is itself a signal: it tells the organisation that the direction is real. A strategy that changes every time the financial results disappoint is a reaction, not a strategy.

How to score it

Count the number of questions your strategy can answer with a clear, specific yes. Eight to ten: your strategy is doing what a strategy should do. Five to seven: the analytical foundations are present but the connection to decisions, communication, or accountability needs work. Below five: your strategy is likely organised around internal priorities rather than external changes, which means it shares the orientation of the firms in the research that executed well but lost.

The questions are simple. The honest answers rarely are.

Six months later, a product manager in Singapore is deciding between two feature priorities. A regional sales director in Munich is evaluating whether to pursue a new customer segment. A procurement lead in Cincinnati is choosing between two suppliers. None of them connects their decision to the strategic direction announced at the town hall. They are making choices based on quarterly targets, functional KPIs, and the priorities their direct manager communicated in last week’s team meeting.

This is where most thematic strategies die. They are conceived at the top, communicated once or twice, and then dissolved by the operational reality of a large organisation where thousands of people make decisions every day without reference to the strategic direction. The strategy exists in the executive suite. It does not exist on the factory floor, in the regional office, or in the procurement system.

My research across 8,430 companies found that the firms which dominated their industries maintained their thematic emphasis across 20 years. That kind of consistency does not happen through CEO communication alone, however clear the narrative. It requires an ownership architecture that cascades accountability from the boardroom to every person who touches strategic execution.

Executive ownership is not enough

The instinct in most organisations is to assign each strategic objective to an executive sponsor. This is correct as far as it goes. Unilever’s Sustainable Living Plan worked in part because Paul Polman owned the firm’s response to sustainability as a driver personally, as CEO, rather than delegating it to a CSR department. The distinction between a strategic response owned at the top and a programme managed by a support function is the difference between success and failure.

But Unilever has approximately 128,000 employees. Polman’s personal accountability for the sustainability positioning meant that every major capital allocation decision was tested against it, every acquisition was evaluated through it, and every investor presentation was framed around it. That is executive ownership working well. What it cannot do on its own is ensure that a brand manager in Jakarta makes a packaging decision that serves the firm’s positioning, or that a supply chain manager in São Paulo selects a supplier whose practices align with it. Those decisions happen too far from the executive suite, too frequently, and in too much operational detail for any CEO to influence directly.

The gap between executive ownership and operational execution is where the ownership architecture matters. The question is how to build a system that makes the strategic direction present in decisions the CEO will never see.

The cascade

Ownership cascades through four levels, and each level requires a different type of accountability.

At the executive level, leaders are accountable for the strategic objectives and competitive positioning that flow from the selected drivers. They define what the firm will build in response to each force, control the resources needed to deliver it, and report progress to the board. If the positioning fails to produce results, they own the failure. This is the level where Polman operated when he made sustainability the organising logic of Unilever’s entire portfolio, and where Cisco’s John Chambers operated when he organised the company’s acquisition strategy around market transitions in networking technology.

Senior management takes ownership of the key results that sit beneath each strategic objective. If the objective is “establish market leadership in automated solutions,” the VP of Sales might own the market share target, the VP of Product might own the revenue mix shift, and the VP of Customer Success might own reference customer acquisition. These owners live in the operational detail whilst maintaining line of sight to the strategic objective above them. They monitor KPIs weekly, run programmes, coordinate across functions, and course-correct before problems reach the executive level.

Middle management is where ownership is most frequently lost. The executive level is visible and the frontline is accountable for specific deliverables, but the layer between them is often vague. Programme managers at this level own the delivery of specific initiatives: building a new capability, launching a product, restructuring a process. They convert strategic intent into milestones, manage resources within allocated budgets, and escalate blockers they cannot resolve. When middle management ownership is informal or assumed rather than explicit, programmes drift without anyone feeling empowered to kill them or redirect them. This is what I call the orphaned middle, and it is where most execution failures originate.

At the team level, individual KPI owners monitor the metrics that signal whether the strategy is working. A conversion rate, a defect rate, a customer satisfaction score. These owners are closest to operational reality and provide the early warning signals that the levels above them depend on. If a leading indicator moves in the wrong direction, the KPI owner investigates, recommends action, and escalates if needed.

One accountable, many responsible

The single most common ownership failure in large organisations is shared accountability. When two or three executives jointly own a strategic objective, each assumes the others are handling it. Problems fall between the cracks. Decisions are delayed because nobody feels authorised to make them alone. By the time the shared owners convene to discuss the issue, the window for action has often closed.

The fix is radical clarity. One person is accountable for each objective, each key result, each programme, and each KPI. Others contribute, provide input, or need to be informed, but only one person owns the outcome. This sounds obvious. In practice, it requires leadership teams to make uncomfortable choices about who carries the weight, and it requires the person who does not get the ownership to accept that their role is contribution, not control.

The discipline extends beyond structural assignment. When ownership is clear, the next question is whether the owner has the authority to match their accountability. A senior manager who owns a key result but lacks budget authority, hiring rights, or decision-making power over the resources needed to achieve it is not really an owner. They are a scapegoat. Accountability without authority produces frustration, disengagement, and the defensive culture that kills strategic execution: people spending their energy documenting why failures were not their fault rather than solving the problems that caused them.

The cultural layer

Structure and authority are necessary but they are not the whole system. Ownership at scale requires a culture that makes four things possible.

Transparency comes first. Performance against the strategic objectives must be visible across the organisation, not locked in executive dashboards that the people doing the work never see. When a KPI moves, the people closest to it should know before the people furthest from it. If problems are only visible at the quarterly review, they are visible too late.

Productive challenge follows. A culture where raising concerns about strategic progress is treated as disloyalty will produce silence, and silence produces surprises. The firms in my research that maintained their thematic commitment across 20 years did not do so by suppressing internal debate. They did so by channelling it: challenge the execution, challenge the pace, challenge the resource allocation, but do so in service of the chosen direction rather than as an argument for abandoning it.

Learning orientation means separating intelligent failure from preventable failure. A programme owner who takes a calculated risk on a new capability, fails, and surfaces the lessons quickly is doing exactly what the organisation needs. A programme owner who fails because they ignored warning signals and hid the problem is doing something different. The response to each must be visibly different, or the organisation will learn that all failure is punished and will stop taking the risks that strategic execution requires.

Fast escalation is the fourth element. When an owner encounters a blocker they cannot resolve, the speed at which it reaches someone who can resolve it determines whether the issue costs the organisation a week or a quarter. Healthy escalation culture treats raising problems as responsible ownership. Where that culture is absent, people learn that surfacing issues gets them blamed for the issues themselves, and they stop doing it. The difference between the two is entirely a function of how leadership responds when problems are surfaced.

How to know whether it is working

The simplest test is the same one I described in the CEO storytelling piece: ask ten employees at random to describe the firm’s strategy. But ownership requires a second, harder test. Ask those same employees who owns the strategic objective that their work contributes to. If they can name the person, the cascade is working. If they cannot, ownership exists on paper but not in the organisation.

A more operational test is speed. When a KPI signals trouble, how long does it take for the information to reach someone with the authority to act on it? In a well-functioning ownership system, the answer is hours or days. In a poorly functioning one, the answer is weeks or quarters, by which point correction is expensive and the window for prevention has closed.

The ultimate test is whether the ownership system survives a leadership transition. When an objective owner leaves, is there a named successor who can take over without losing momentum? Or does the strategic direction drift whilst the organisation figures out who is responsible? The superfirms in my data maintained their thematic emphasis across CEO transitions, recessions, and competitive crises. That durability was the product of an ownership architecture that made the firm’s positioning institutional rather than personal.

Thematic Strategy fails most often not because the wrong drivers were selected, and not because the CEO cannot communicate them clearly. It fails because the distance between the boardroom and the factory floor is filled with thousands of daily decisions that nobody has connected to the strategic direction. Closing that gap is what ownership at scale is designed to do.

This is the most common failure in strategic management, and it is almost always a communication failure. If the CEO cannot translate the strategy into a narrative that makes employees want to come to work, gives investors a reason to back you, and grows customers, the strategy remains trapped in PowerPoint and the organisation reverts to whatever it was doing before.

My research across 8,430 companies suggests this is more than an execution problem. It may be a leading indicator of competitive outcomes.

Language matters a lot

My content analysis of 120 annual reports across 20 years showed a consistent pattern: the language that CEOs used to describe their firms’ strategies predicted which firms would dominate their industries and which would not, years before the financial performance did.

In 2010, Steve Jobs told an audience at the D8 conference that “PCs are going to be like trucks. They’re still going to be around, they’re still going to have a lot of value, but they’re going to be used by one out of X people.” That metaphor did strategic work that no slide deck could match. In a single image, it identified the external force Apple was organised around (the shift from desktop computing to mobile personal devices), told every engineer and designer what to build towards, and told them what to deprioritise, in language vivid enough to survive translation through every layer of the organisation. A product manager at Apple hearing that sentence could evaluate any proposal by asking whether it served the post-PC world or the old one. Three years earlier, when he introduced the iPhone at Macworld in 2007, Jobs had framed the product in the same outward-facing terms: “Every once in a while, a revolutionary product comes along that changes everything.” The sentence described a structural shift, not a phone, and it announced that Apple would build around it.

Gilead’s John Martin communicated with similar clarity but in entirely different language, which is what you would expect from a biotech CEO whose forces were different from those reshaping consumer technology. Asked what drove his strategy, Martin began with the world’s needs: “When you look for unmet medical needs to go after next, what’s at the top of the list? Hepatitis C virus infection.” He then spent $11 billion acquiring Pharmasset, a company with an unapproved hepatitis C treatment, telling investors the deal represented the chance to address 180 million patients worldwide. The market was sceptical and Gilead’s stock fell by roughly 10% on the announcement. The bet generated $58.5 billion in revenue over five years.

Jobs and Martin led firms in different industries with different forces, but their communication shared an orientation. They began with the external world and worked inward. They described forces in language specific enough that a listener could convert the statement into a decision.

What the opposite sounds like

Their competitors’ CEOs described different priorities. Amgen’s Kevin Sharer presented six strategic objectives to investors in 2011: manufacturing quality and lowest cost, cost structure management, capital allocation, balance sheet strength, shareholder returns, and bringing medicines to market. Five of the six concerned internal operations. The language was competent, professionally delivered, and gave investors no framework for understanding which external forces Amgen was building around or why.

HP’s successive CEOs, across 15 years, told variations of the same inward-facing story. Carly Fiorina framed the Compaq merger around cost synergies and competitive scale. Mark Hurd told analysts his focus was driving operational efficiency and cut 14,500 jobs in his first year. Meg Whitman announced a further restructuring that would eliminate 55,000 positions, describing her priority as restoring a balance of growth and efficiency. Across three CEO transitions and a decade and a half, none identified an external force that HP would organise around. Each described what the firm would do to itself, without addressing what was changing in the world that would determine whether any of it mattered.

Nokia’s Stephen Elop produced the most instructive failure of strategic communication in recent corporate history. His 2010 “burning platform” memo diagnosed the crisis in terms that pointed entirely inward: accountability failures, leadership gaps, poor collaboration. Every sentence described what Nokia was doing wrong internally. The memo was addressed to employees, but it gave them no framework for understanding the forces that were actually destroying Nokia’s position. It told them the building was on fire but not where the fire came from or where to run. The direction of attention in that memo, inward at failures rather than outward at forces, mirrored what the content analysis found across 20 years of Nokia’s annual reports. The language was the symptom; the orientation was what produced it.

Why narrative is a strategic function

The distinction between these CEOs had nothing to do with presentation skill. Jobs was magnetic and Sharer was polished, but the gap between them was functional: Jobs and Martin were using communication as a strategic instrument. Sharer and Elop were not.

When a CEO describes the firm’s strategy in terms of external forces, three things happen in the organisation. Employees gain a decision filter. If a product manager knows the firm is organised around the convergence of computing and consumer culture, she can evaluate a proposed feature by asking whether it serves that convergence. If it does, pursue it. If it does not, deprioritise it. She does not need to escalate the decision because the narrative has given her the criteria. I wrote about this concept in more detail in One Strategy, Five Stories: the same strategic logic needs different narrative frames for different audiences, but the underlying logic must be clear enough that people across the organisation can apply it independently.

The second effect is patience from investors. A CEO who can explain the logic connecting today’s investments to structural forces that will compound over a decade gives investors a framework for holding through quarters where the returns have not yet materialised. When Paul Polman arrived as Unilever’s CEO in 2009, one of his first acts was to abolish quarterly earnings guidance, telling investors that short-term targets encouraged decisions that harmed long-term performance. Unilever’s shares fell 8% on the announcement. He then launched the Sustainable Living Plan, making sustainability the organising logic of the entire company, and told Fortune magazine: “This is not a charity we’re talking about here, you know. We are running a business.” Polman’s story connected an external force (consumer and regulatory demand for sustainable products) to a business strategy, in language that forced investors to decide whether they believed the force was structural. Many did. Over Polman’s ten-year tenure, Unilever delivered nearly 300% shareholder return, outperforming its peers and the broader market.

For customers, the effect is confidence in the partnership. A firm whose CEO can articulate the structural forces the company is building around gives customers a reason to believe the partnership will be valuable as the market evolves. The customer is buying a position, not a product, and the CEO’s communication is what makes that position visible.

Each of these effects is operational. They change decisions, capital flows, and commercial relationships. This is why strategic communication has become a core leadership competency rather than a complementary skill. A CEO who can identify the right themes but cannot communicate them is doing half the job, and as my research shows, it is the half that matters less. A strategy that the leadership team understands but the organisation cannot act on produces precisely the outcome the content analysis documented at HP and Nokia: good execution of an increasingly irrelevant direction.

The discipline of repetition

Telling the story once is not telling it. A CEO who presents the strategy at an annual town hall and considers the communication job done will find that three months later the organisation has forgotten the specifics and reverted to operational defaults. Strategic narrative requires constant repetition, and the repetition needs to be connected to decisions rather than delivered as a standalone message.

When a firm makes an acquisition, the CEO should explain how it connects to the themes. When a business unit is restructured, the connection should be explicit. When quarterly results are reported, the narrative should frame them against the forces the firm is organised around, not just against last year’s numbers. Bob Iger did this at Disney across 15 years. Pixar, Marvel, Lucasfilm, and Fox each looked like a standalone deal when announced. But Iger connected each one to the same story about digital distribution and the globalisation of consumer culture, giving employees a reason to believe the acquisitions were part of something larger. Investors gained a logic for supporting the capital commitment. Customers could see why the Disney brand was worth engaging with across platforms. Without that connecting story, each acquisition would have appeared disconnected and the internal resistance to each deal would have been greater.

The CEO who communicates well does not add communication to their leadership responsibilities. They integrate it into every interaction they already have: board meetings, investor calls, town halls, one-to-ones with direct reports, and the informal conversations that shape culture. The strategy should be audible in all of them, adapted to the audience but anchored to the same forces.

How to know whether it is working

Comprehension is the first test. Ask employees to describe the strategy. If they can, the narrative has landed. If they cannot, it has not, regardless of how many times it has been presented.

A harder test is whether stakeholder behaviour reflects the story. Are employees making decisions that serve the themes without being told to? Are investors holding through short-term underperformance because they understand the long-term logic? Are customers choosing the firm because of its positioning around forces that are reshaping their own markets?

The most demanding test is whether the narrative survives a crisis. When results disappoint, when a competitor makes a move, when the board asks difficult questions, does the CEO return to the forces and reaffirm the direction, or does the CEO pivot to operational language and abandon the thematic frame? The superfirms in my research maintained their thematic emphasis across 20 years that included the dot-com crash, the 2008 financial crisis, and periods of intense competitive pressure. The discipline of maintaining commitment through adversity is itself a form of communication: it tells the organisation that the themes are real, not decorative.

The question every CEO should ask is whether they could describe their firm’s strategy to a new employee in three minutes, in language specific enough that the employee could make a decision based on it by the end of the week. Jobs could, and so could Martin and Polman. The evidence suggests that this capability, far from being a soft skill, is one of the strongest predictors of whether a firm’s strategy will produce the outcomes it was designed for.

Each of them assumes something about the world that was more true in 1980 than it is now: that the competitive terrain is relatively stable, and that strategy is the art of positioning well within it.

I believe this view is outdated and strategically dangerous.

What Porter gets right

Porter’s central contribution was clarity about the nature of competition. An industry’s profitability is shaped by five structural forces: the bargaining power of buyers, the bargaining power of suppliers, the threat of new entrants, the threat of substitutes, and the intensity of rivalry among existing competitors. Understand these forces and you understand why some industries are more profitable than others, and where within an industry a firm can position itself to capture disproportionate value.

This remains useful. A leadership team that has not conducted a rigorous analysis of its competitive structure is operating without a map. Porter’s framework provides one, and the map is accurate as far as it goes.

Where it stops is at the boundary of the industry itself. Porter’s Five Forces describes the terrain as it currently exists. It tells you about the bargaining power your suppliers hold today, the substitution threats you face today, the competitive intensity you experience today. What it does not describe is the set of long-term forces that are reshaping the terrain from outside, operating above the level of any single industry and indifferent to the competitive dynamics within it.

The layer above industry structure

Nokia understood its competitive terrain in 2005. It knew its competitors, its suppliers, its distribution channels. A Porter analysis conducted that year would have told Nokia’s leadership that its competitive position was strong: over 40% global handset market share, diversified supplier relationships, formidable distribution, and limited threat from substitutes in the traditional mobile phone category. By every measure that the Five Forces framework captures, Nokia was well positioned.

What the framework could not capture was the convergence of computing and communications, a structural force that sat above the mobile phone industry and was about to reshape it from outside. The threat arrived through none of Porter’s five channels: not from a more powerful supplier, a new entrant in handsets, or a substitute within the existing product category, but from a force operating at a higher level, the long-term shift in how humans interact with computing. Apple’s iPhone was the product of a different force entirely, one that a competitive analysis of the mobile phone industry in 2005 would not have surfaced.

Nokia’s former chairman Jorma Ollila later acknowledged this directly, noting that Apple had created an entirely new platform of services and applications that Nokia had been unable to match. When INSEAD researchers studied the collapse, they found an organisation that had turned inward: middle managers afraid to deliver bad news, senior leaders focused on quarterly targets, a culture in which internal fear had replaced external curiosity. Nokia’s failure was directional before it was operational. The company was looking at its competitive position whilst the ground beneath that position was shifting.

SWOT captures some of this through its “threats” and “opportunities” quadrants, but only as a snapshot. It does not distinguish between a threat that will persist for two quarters and a force that will reshape the industry for two decades. Both receive the same treatment: a bullet point on a matrix. The Balanced Scorecard, for its part, tracks performance against strategic objectives but does not address where those objectives should come from. It is an execution framework, and a good one, but it assumes the strategic direction has already been set correctly. If the direction is wrong because the firm has organised around internal priorities while the external terrain shifts beneath it, disciplined execution against a Balanced Scorecard will produce efficient delivery of an increasingly irrelevant strategy.

What all three frameworks share is an assumption that the competitive environment is the primary unit of analysis. Porter analyses the industry. SWOT maps the firm against its environment at a point in time. The Balanced Scorecard tracks progress against objectives derived from competitive positioning. Each is valuable within its scope. But none asks the prior question: what long-term forces are reshaping the environment in which this competition is taking place, and is the firm organised around them?

What the evidence shows

My research across 8,430 companies tested whether this gap between industry analysis and force analysis had measurable consequences. I searched the entire US stock market for firms that had captured a dominant share of their industry’s profits over five consecutive years. Eleven firms met the threshold, just 0.13% of the sample (I called them superfirms). I then designed a content analysis of 120 annual reports across 20 years, comparing three of these superfirms with the competitors that had held the profit lead at the start of the period: Apple versus HP, Cisco versus Nokia, Gilead versus Amgen.

The finding was consistent across all three pairs. The superfirms devoted disproportionate attention to growth-oriented, outward-facing forces: computational technologies, consumer culture, globalisation, business model innovation. Their competitors devoted disproportionate attention to defensive, inward-facing concerns: financial structures, workforce management, regulatory compliance. Both groups discussed external forces. The difference was whether those forces organised the firm’s decisions or sat in a section of the strategy document labelled “external environment” and stayed there.

The CEO statements reinforced the data. Cisco’s John Chambers stated his strategic philosophy explicitly: “I always compete against market transitions, business model changes and technology, never against competitors.” Gilead’s John Martin, asked what drove his strategy, began with the world’s needs and spent $11 billion acquiring a company with an unapproved hepatitis C treatment because he saw an external force worth organising around. Their competitors’ CEOs described internal priorities. Amgen’s Kevin Sharer outlined six strategic objectives to investors in 2011: five of the six concerned manufacturing costs, capital allocation, and balance sheet management. HP’s successive CEOs, across 15 years, described cost reduction, workforce restructuring, and operational efficiency. Both firms were executing competently against frameworks that described their current competitive position. Neither was organising around the forces that would determine their future one.

The distinction maps precisely onto what separates Porter’s framework from what I believe is needed. Porter tells you how to position within an industry. The evidence from the my research suggests that the more consequential question is which forces are reshaping the industry from above, and whether the firm has organised around them. HP conducted rigorous competitive analysis throughout the 2000s. It knew its buyers, its suppliers, its rivals. What it did not do was identify the convergence of computing and consumer culture as a force to build around. Apple did, and the result was a shift from 1% of industry profits to 78% in 15 years. A well-executed Porter analysis could not have produced that outcome, because the force that produced it operated outside Porter’s frame.

From context to foundation

The approach I call Thematic Strategy extends Porter’s framework by adding this missing layer. It accepts Porter’s insight that strategy requires clear choices. It accepts that competitive positioning matters. What it adds is a prior question: which long-term external forces should those choices be anchored to?

A theme, in this framework, is a long-term structural force, external to the firm, that the firm has chosen to organise its strategy around. Themes must pass three tests: has the force been growing structurally for a decade (structural shift), does it affect multiple industries (cross-industry relevance), and can the firm allocate capital and talent against it (actionability). These tests filter the hundreds of forces in a firm’s external environment down to the three or four worth organising around.

The difference between conventional strategy and thematic strategy is the difference between treating forces as context and treating them as foundation. An adaptive firm conducts an annual strategic review, notes the forces reshaping its industry, adjusts its plans, and then returns to executing against internal priorities. The forces inform the plan. An aligned firm selects three or four forces and makes them the centre of every major decision: capital allocation, acquisitions, product development, geographic expansion. The forces are the plan.

Genuine Parts, a car parts distributor founded in 1928, built its strategy around technology-driven distribution, globalisation, and industry consolidation. Disney organised around digital distribution and the globalisation of consumer culture, acquiring Pixar, Marvel, Lucasfilm, and Fox because of those forces. Unilever made sustainability the operating logic of the entire company a decade before most competitors treated it as anything more than a communications exercise. Each of these firms captured dominant profit share in industries where dozens of well-resourced competitors shared what remained.

In 1993, Igor Ansoff and Patrick Sullivan published a study spanning nine decades of business performance. Their conclusion was that environment-driven firms, companies that continuously realigned their strategies with the external environment, outperformed others across every era studied. Thematic Strategy builds on Ansoff’s finding and makes it operational by identifying the specific mechanism: long-term drivers of transformation, selected deliberately, committed to over decades, and used as the organising principle for all major decisions.

What this means for how you build strategy

Porter’s Five Forces remains a useful tool for understanding industry structure, and SWOT still has value as a starting point for situational analysis. Neither needs to be abandoned. What needs to change is where the strategic conversation begins.

Most strategy processes start with the competitive environment: who are our rivals, what are our strengths, where can we win? Thematic Strategy begins one level higher: which structural forces are reshaping the terrain on which that competition takes place, and which of those forces are we building around? The competitive analysis then follows, but it follows from the force analysis, which means the firm is positioning within an industry it understands to be changing in specific, identifiable directions.

The difference is operational. Under Porter’s framework, capital flows to defend and extend the firm’s competitive position within the current industry structure. Under Thematic Strategy, capital flows to strengthen the firm’s position on three or four forces that are reshaping the industry structure itself. When those forces accelerate, the firm using Porter discovers its position has eroded. The firm organised around forces discovers the opposite: the capabilities it built are now more valuable, because the world has moved in the direction it was already facing.

The practical test is whether your current strategy could survive a change in the competitive landscape that none of your existing frameworks would have predicted. Nokia’s could not, and neither could HP’s. The firms that dominated their industries built strategies that strengthened as the forces accelerated, because the forces were the foundation. That is the shift from Porter to what comes next.

The strategy acknowledges the external forces, but the budget allocates against internal priorities. The gap between what the team knows is changing and what the team actually does about it grows wider each quarter.

By the end of this article, you should be able to answer three questions:

1. What are the three structural forces your strategy is organised around?

2. When did your leadership team last change a resource allocation decision because of a shift in one of those forces?

3. Who is responsible for monitoring those forces?

If those questions feel uncomfortable, the process described here is designed to close exactly that gap.

The gap is visible empirically. My research across 8,430 companies found it in the data. Every firm I analysed discussed external forces to some degree. HP mentioned technology, Nokia referenced consumer devices, and Amgen wrote about globalisation. But they did not shape those firms’ decisions. The superfirms paid disproportionate attention to growth-oriented, outward-facing forces. Their competitors treated the same forces as background noise. The difference lay in whether foresight had been connected to the decisions that allocate capital, talent, and organisational energy.

Closing that gap requires a process, and the annual offsite with a guest speaker on trends does not qualify. Neither does the consulting engagement that produces a 100-page report nobody reads. What works is something less glamorous: a process that runs continuously and feeds directly into the decisions that shape the firm’s direction.

Why the strategy offsite fails

The output of a strategy review is typically a set of slides: observations that are broadly accurate and almost entirely disconnected from the capital allocation decisions that will be made in the following months.

This fails for a specific reason. External forces do not change on an annual cycle. A force that was emerging in 2022 may be accelerating by 2026. Nokia’s leadership reviewed its competitive environment every year throughout the 2000s. The reviews noted the emergence of smartphone computing. But Nokia held over 40% of global handset market share in 2007, and that dominance made the annual cadence feel adequate. Then Apple had launched the iPhone and captured the position that Nokia would never recover. The annual cycle failed not because Nokia’s analysts were uninformed but because they did very little about it.

Cisco, by contrast, is one of the superfirms in my research, and its approach is completely different. John Chambers described his competitive logic in terms of “market transitions,” not competitors, and Cisco’s capital allocation reflected this: the company made over 200 acquisitions in two decades, each tested against whether it strengthened Cisco’s position on the forces reshaping networking and communications technology. Cisco did not know more about market forces than Nokia did. It acted on what it knew faster, feeding foresight directly into acquisition decisions on a continuous basis rather than reviewing it annually and filing it.

Who should be in the room

The composition of the foresight group matters more than most organisations recognise. The default is to assign foresight to the strategy team, which produces rigorous analysis that the operating executives have no ownership of and therefore ignore. The opposite failure is to make it a CEO-only exercise, which produces conviction at the top and bewilderment everywhere else.

In my experience, the groups that work best are small, senior, and cross-functional: six to eight people. The CEO or equivalent, the heads of the two or three largest business units, the CFO (because foresight without a connection to capital allocation is academic), and one or two people from outside the core leadership who bring a different perspective: a technology leader, a head of corporate development, or someone with deep customer contact. The cross-functional composition matters because forces look different from different positions in the organisation. A demographic shift that the head of product sees as a design challenge looks like a revenue risk from the CFO’s and an acquisition opportunity from the perspective of corporate development. Those three perspectives on the same force are what make the scanning exercise strategically useful rather than analytically interesting. Larger groups default to presentation mode. Smaller ones lack the diversity of perspective that makes the scanning productive.

One person who should not be in the room is an external consultant running the process. The foresight group needs to own its conclusions. When an outside firm presents the analysis and the leadership team reacts to it, something shifts: the discussion becomes an evaluation of the consultant’s work instead of a debate about the firm’s strategic direction. I have watched this happen repeatedly. The leadership team engages with the slides, not the forces. They offer polite feedback instead of genuine disagreement, and leave the room having discussed someone else’s view of their environment. External input is valuable for specific questions, but the scanning and prioritisation process must be owned internally or it will not survive the first quarter in which operational pressures compete for the leadership team’s time.

What the process produces

The output of a foresight process is a prioritised view of the external forces reshaping the firm’s competitive environment, updated regularly and connected to specific decisions.

I developed the Growth-Impact Matrix to help with this:

The horizontal axis plots impact: whether the force represents an opportunity or a threat to the firm, assessed through a combination of revenue exposure, competitive positioning, and capability alignment. The vertical axis plots momentum: how fast the force is growing, scored from baseline (growing at or below GDP rate) through accelerated and rapid to exponential (growing at 15% or more annually). The team arrives at a shared position for each force through structured discussion, typically with one member presenting a preliminary assessment and the group debating until consensus emerges. Voting can break deadlocks, but the conversation is where the value lies.

The resulting matrix produces four broad zones. Forces in the upper right (high momentum, positive impact) are the ones to commit to and build around. Forces in the upper left (high momentum, negative impact) demand defensive investment. Forces in the lower half deserve monitoring but not strategic commitment, and the discipline of leaving them there, rather than escalating every emerging trend into a strategic priority, is part of what makes the matrix useful.

How the matrix connects to theme selection

What makes this tool different from a standard risk matrix or PESTLE analysis is that it connects directly to the three tests that determine whether a force qualifies as a strategic theme:

1. Has it been growing structurally for a decade (structural shift)?

2. Does it affect multiple industries (cross-industry relevance)?

3. Can the firm allocate capital and talent against it (actionability)?

The momentum dimension captures structural shift directly. Cross-industry relevance shows up in how broadly a force’s impact reaches across the firm. And actionability is reflected in the specificity of the response the matrix demands: commit, invest, or defend are operational instructions, not vague prescriptions like “monitor” or “be aware.” The matrix is the mechanism through which theme selection happens.

The matrix serves as a living document. Forces change. A driver that sat in the monitoring zone two years ago may have accelerated into the commitment zone. The value of the matrix is that it makes these movements visible and forces the leadership team to respond to them, which prevents the common failure of pretending the strategic environment has not changed since the last review.

Building it for the first time

The initial exercise, building the matrix for the first time, takes genuine effort. The SPINE framework provides 292 individual drivers of transformation organised across five forces: Society, Power, Innovation, Nature, and Economy. A leadership team scanning this taxonomy for the first time should expect to identify 10 to 15 drivers with material relevance to their competitive context. Plotting those drivers on the Growth-Impact Matrix and arriving at a shared view of which forces demand strategic response will typically require two to three half-day sessions. After the initial build, the process shifts to maintenance and decision-making.

How often, and for how long

A quarterly review is the right cadence for most organisations. It aligns with the business planning cycle without creating the overhead of monthly meetings that compete with operational demands. Firms in fast-moving industries, those in the middle of a strategic crisis, or early-stage companies where the competitive landscape is still forming may need a higher frequency, but for established firms operating in industries that change over years rather than weeks, quarterly works well. Each session should be two to three hours, structured around three questions:

1. Which forces have moved on the matrix since the last review?

2. What new forces have appeared that were not previously on the radar

3. And most critically, which capital or talent decisions should change as a result?

Not every force needs rescoring each quarter; the focus should be on the three or four where momentum or impact may have shifted, with a full rescore of the entire matrix annually.

That last question is the one that separates a useful foresight process from a sophisticated monitoring exercise. If the quarterly review does not produce at least one specific recommendation about resource allocation, hiring, investment, or divestment, then the process is not connected to decisions and will eventually be abandoned. The firms that dominated their industries did not merely monitor forces. They organised around them, which means every foresight discussion ended with a decision or a reaffirmation of a previous one.

Between quarterly sessions, one member of the foresight group should own the monitoring function. This is a standing responsibility, not a full-time role: flag any significant movement in the forces on the matrix, any new force that has appeared, or any event that changes the momentum or impact assessment of an existing force. When something material changes, the group reconvenes. A well-functioning process would have triggered an interim review when the European energy crisis reshaped operating costs across the continent in 2022, and again when ChatGPT’s release in November of that year forced every firm with AI on its matrix to reassess how fast the force was moving. The cadence is quarterly by default, with ad hoc sessions when the environment moves faster than the cycle.

Where foresight processes break down

Three failures recur. Information overload is the most common. The goal of foresight is reduction, not accumulation: selecting three or four forces to build around from a landscape of hundreds. A matrix with 40 forces plotted on it serves research purposes, not strategic ones. The discipline of limiting the matrix to 10 to 15 forces, and the themes derived from them to three or four, is what gives the process strategic value.

Disconnection from capital kills the process more quietly. A foresight exercise that produces insight but never changes a budget line will be abandoned within a year. The CFO’s presence in the room exists to ensure that when the group concludes a force has accelerated, the conversation immediately turns to what that means for next quarter’s investment plan.

The deeper failure is treating foresight as a support function. If the process is owned by a strategy team that reports to the leadership rather than being run by the leadership itself, the output will be treated as advisory, not directive. My research showed this clearly: the direction of a leadership team’s attention predicted competitive outcomes years in advance. Attention that is delegated to a support function is, by definition, not the leadership team’s attention.

The test

The tests are simple.

1. What are the three structural forces your strategy is organised around?

2. When did the leadership team last change a resource allocation decision because of a shift in one of those forces?

3. Who in the organisation is responsible for monitoring those forces?

If the answers come easily, the process is connected to decisions. If they do not, the process is producing awareness without action, which is the gap that separates the firms that execute well but lose from the firms that dominate.

These priorities are not wrong. Many reflect genuine concerns. The problem is that they are interchangeable. Swap the priorities of any two firms in the same industry and you would struggle to tell the difference. When everything is a priority, nothing organises the firm’s decisions in a distinctive direction.

A theme is different from a priority. It is a long-term structural force, external to the firm, that the firm has chosen to organise its strategy around.

Themes exist whether the firm responds to them or not. E-commerce was rewriting the rules of distribution whether any individual retailer invested in it or not. The shift to renewable energy was reshaping power markets whether any individual utility adapted or not. The choice to organise around a theme is a strategic decision. The theme itself is external and indifferent to your participation.

My research across 8,430 companies found that the firms which dominated their industries selected three or four themes and committed to them over decades. The precision of that selection is what made the approach work. Too many themes leads to diffusion, the same problem conventional strategy produces when it tries to respond to everything. Too few creates vulnerability. The question is how to separate the small number of themes worth organising around from the hundreds of forces in any firm’s external environment.

I use three tests. A candidate force must pass all three to qualify.

Test 1: Structural shift

Has the force been growing for ten or more years, at a rate significantly greater than GDP growth, across economic cycles?

Cloud computing clears this bar easily. It has been growing consistently since the mid-2000s, through recessions and recoveries, and shows no signs of decelerating. The metaverse, as conceived in 2021, does not. It generated intense media attention for roughly two years, attracted large corporate investments, and then failed to achieve mass adoption. The distinction matters because organisations frequently confuse excitement with structure. A force that generates conference panels and consulting reports is not necessarily one that has been growing consistently for a decade. The test is deliberately backward-looking. It asks not “will this be important?” but “has this already been important, for a long time, across conditions that would have killed it if it were not structural?”

A sophisticated objection to the ten-year threshold is that it would exclude genuinely structural forces in their early stages. This is a fair concern, and the answer is that the test is a heuristic for structural durability, not a rigid threshold. A force that has been growing for seven years with accelerating momentum may qualify. One that has been growing for two years with intense media coverage but no evidence of persistence across an economic downturn probably does not.

AI is worth addressing directly because it illustrates this judgment in practice. Large language models appeared to arrive suddenly in late 2022. But the underlying compute infrastructure, the training data pipelines, and the venture investment in AI companies had been building for well over a decade. The structural force underneath was not sudden. The product that made it visible was. What looked like a disruption was actually the visible surface of a shift that had been compounding for years. AI qualifies under this test, but the full argument for why most firms’ AI strategies still fail as themes belongs to the third test below.

Test 2: Cross-industry relevance

Why does a theme need to affect more than one industry? Because a force that reshapes a single niche cannot anchor a firm’s strategy for a decade. The breadth of a force determines how many strategic options it creates and how many applications the firm can find across its portfolio, its geographies, and its growth trajectory. A narrow force produces a product opportunity. A broad force produces a strategic position.

Ageing populations are the clearest example of a force that meets this standard. The implications reach into healthcare through rising chronic disease treatment and growing eldercare demand, into financial services through longer retirements requiring different savings and pension products, and into housing through demand for smaller units, single-floor living, and proximity to medical services. Consumer goods firms face different nutritional needs and packaging requirements. Labour markets face shrinking working-age populations and rising dependency ratios. A firm that organises around ageing populations can find applications across its entire portfolio and across multiple geographies, since the demographic trajectory is seen in nearly all developed economies.

Contrast this with blockchain-based supply chain verification. It may be growing. It may solve a real problem in specific logistics and procurement contexts. But its applications are concentrated in a narrow band of use cases within a single domain. No CEO would stand in front of a board and say “Our strategy for the next decade is organised around blockchain-based supply chain verification.” The number of industries a force affects is a reasonable proxy for how much strategic surface area it creates. A force that touches six industries gives a firm six different ways to apply its theme and six different sources of compounding advantage as the force accelerates.

Precision fermentation is transforming parts of the food industry, but it has limited relevance to financial services, healthcare, or media. A firm operating solely within food production might reasonably organise around it. A diversified firm cannot.

Test 3: Actionability

This is where most candidate themes are eliminated. A firm must be able to explicitly allocate capital and talent to the theme. If it cannot point to specific investments, specific hires, and specific decisions that flow directly from the theme, the theme has not passed.

“The world is becoming more uncertain” is an observation that most leaders would agree with. But no firm can allocate a budget line to uncertainty. There is no R&D programme for “uncertainty.” There is no acquisition target called “uncertainty.” The observation is real but not actionable, which means it cannot be a theme. “The future of work is changing” is a similar case. It sounds strategic. It appears in annual reports across industries. But what capital decision does it produce? Which specific capabilities does the firm build? Unless the leadership team can answer those questions concretely, the phrase is occupying strategic space without doing strategic work.

This is where most firms’ AI strategies fail, and the failure is instructive because it shows what the actionability test is actually filtering for. AI satisfies the structural shift and cross-industry tests easily. The problem is how firms articulate it. “Artificial intelligence is transforming our industry” is a statement that could appear in any strategy in any sector and commit the firm to nothing. It is the strategic equivalent of “we believe in growth.” The actionability test requires specificity: which AI capabilities is the firm investing in? Can it hire the people it needs? Can it identify acquisition targets? Can it point to a budget line that says “AI-aligned investment” and explain what that investment will produce?

“Artificial intelligence” fails the actionability test. But “machine learning applied to drug discovery” clears it, because a firm can hire computational biologists, invest in training data infrastructure, and acquire companies with relevant datasets. “Computer vision for automated quality control in manufacturing” clears it too, for different reasons: the capital expenditure is identifiable, the talent requirements are specific, and the ROI is measurable against current defect rates. The test forces precision, and precision is where vague strategic language becomes operational commitment. A leadership team that cannot convert its AI priority from a sentence in a strategy document into a capital allocation plan has not yet identified a theme. It has identified a topic.

The filter in practice

When Cisco’s John Chambers said “I always compete against market transitions, not competitors,” he was describing what it looks like when themes, rather than internal priorities, organise the strategy. The three tests are the mechanism for arriving at that position.

The test you can run today is simple. Take the priorities listed in your current strategy document and run each one through the three filters. Has it been growing structurally for a decade? Does it affect multiple industries beyond your own? Can you point to specific capital and talent decisions that flow directly from it? The priorities that survive all three are your themes. The ones that fail are initiatives, observations, or buzzwords occupying strategic real estate they have not earned. A theme can be concrete (electric vehicles) or abstract (the sustainability movement that Unilever organised its entire strategy around), but it must survive all three filters regardless.

These judgments are not always clean. Reasonable people on the same leadership team will disagree about whether a force has been growing “significantly greater than GDP” or whether it has genuine cross-industry relevance. That disagreement is part of the value. The three tests are designed to force a debate that most strategy processes skip: not what should we do, but which external forces are structural enough to build around for a decade.

Most leadership teams that run this exercise discover that their strategy contains one or two genuine themes buried under a longer list of internal priorities that feel strategic but are not connected to any external force. The firms that dominated their industries did the opposite: they placed external forces at the centre and organised everything else around them.

The three tests are the mechanism for making that shift.

My research, which analysed 8,430 companies and 9.1 million words of annual reports across 20 years, found that the firms which achieved dominant profit share did so by organising their strategies around long-term external forces. Their competitors, facing the same forces with comparable resources, organised around internal priorities.

The more specific finding was about concentration. The dominant firms did not try to respond to every force in their environment. They emphasised an average of three to four external driver clusters significantly more than their competitors, and they sustained that emphasis across two decades. The small number turns out to be critical. Too many forces leads to diffusion, and what separated 11 firms out of 8,430 from everyone else was selecting the right few and committing to them.

But which forces? The research identified 292 individual drivers of transformation from a systematic review of the academic literature spanning four decades. I organised them into a four-level taxonomy, from individual drivers up through 32 clusters, 13 families, and finally five broad transformative forces. These five forces, Society, Power, Innovation, Nature, and Economy, form the SPINE framework.

These are not competitive forces in the Porter sense. They describe the categories of long-term structural change that operate above the level of any single industry, affecting all industries though not all equally. They are the territory from which strategic themes are drawn, and the convergence points between them are where the strongest competitive positions tend to emerge.

Society

Society reshapes markets through demographics, culture, and human development. Demographics are the slowest-moving and most predictable of all forces, which is precisely why they are so underused in strategic planning.

South Korea’s fertility rate fell to 0.72 children per woman in 2023, the lowest in the world and far below the 2.1 replacement rate. The working-age population has already begun to decline, and projections suggest the country will lose roughly a third of its current population by 2060. Japan, Italy, Spain, and much of Western Europe face the same structural trajectory at different speeds. For any firm that serves families with young children, this is a structural headwind that no product innovation can reverse. But the same demographic shift creates tailwinds elsewhere: eldercare, financial products for longer retirements, and single-person household services will all compound for decades. The same force creates both. The strategic question is which side of it you have chosen to build around.

Cultural shifts move faster. The expectations consumers bring to brands have changed materially over the past decade: transparency about sourcing, environmental commitments, and corporate values has shifted from a niche concern to a mainstream purchasing criterion, accelerated by social media platforms that give communities the tools to organise boycotts and coordinate switching behaviour. Fast fashion illustrates the convergence. Shein grew to become one of the world’s largest fashion retailers by offering extreme speed and extreme price, but its model has attracted sustained regulatory scrutiny in the EU and a consumer backlash from younger buyers who view disposable clothing as incompatible with their values. The strategic implications run in both directions: a firm positioned around sustainability faces a growing tailwind, whilst a firm positioned around volume and disposability faces a headwind that regulatory pressure is accelerating. A cultural shift that would have taken a decade to propagate in 1995 can propagate in two years today.

In the content analysis, this force showed up clearly. Unilever’s annual reports placed significantly higher emphasis on consumer culture and sustainability language than L’Oréal’s across the same 20-year period. Unilever was writing about the cultural forces reshaping personal care whilst its competitor wrote about product formulations and market share. The two companies were each describing their business, but only one was organised around the force that would determine who captured the majority of industry profits.

Power

The shift from a unipolar world to a multipolar one has transformed the operating environment for any firm with international reach. The US-China technology competition is the clearest example. Nvidia must simultaneously serve the Chinese market whilst complying with US export controls that restrict which chips can be sold there. Apple, Tesla, and dozens of other firms face versions of the same constraint. This is a structural realignment, not a trade dispute, and firms caught between the two blocs must now make strategic choices about which markets they can access and at what cost.

Regulatory nationalism reinforces this. Governments are increasingly using regulation as a competitive tool, imposing data localisation requirements, technology transfer conditions, and market access restrictions that fragment what was once a globalising economy. A firm that built its strategy around continued trade liberalisation is operating on a premise that has been weakening for a decade. The theme, stated with enough precision to be actionable, is “the shift toward regulatory nationalism.” Framed that way, a leadership team can allocate resources against it.

My data captured this in an unexpected way. Nokia’s annual reports devoted significantly more language to policy and regulation than Cisco’s over two decades of filings. Nokia oriented toward the rules governing its environment whilst Cisco oriented toward the market transitions reshaping it. The difference preceded the divergence in their profit trajectories by years, which suggests that how a firm relates to Power forces (as constraints to manage or as terrain to navigate) may be a leading indicator rather than a lagging one.

Innovation

The internet was a curiosity when I first encountered it in 1994. The idea that computational technology would create the most valuable companies in the history of capitalism was unthinkable at the time. But it happened, and the content analysis made this force visible with unusual clarity.

Apple’s emphasis on computational technologies was the clearest single signal distinguishing it from HP across 20 years of filings. Apple wrote about software, applications, devices, and systems. HP wrote about toner, laserjet, and printers. Same dictionary of technology language, radically different orientation toward where computing was heading.

Innovation extends well beyond computing. Infrastructure sets the conditions for further change: urbanisation, energy systems, and transport networks transform markets by changing how people live, where they work, and what goods and services can reach them. The continued redevelopment of major cities creates both opportunities and threats for incumbents and new entrants. New transport links, whether roads, railways, or shipping routes, reshape trade patterns and consumer access in ways that take years to materialise but create permanent structural shifts once they do.

Science delivers a different type of innovation from technology. Pharmaceutical breakthroughs, materials science advances, and biotechnology developments create cross-industry consequences that unfold over decades. The forces that reshape industries through innovation are structural rather than sudden, and what matters strategically is whether a firm treats innovation as a feature to add to existing products or as a structural force to organise around. The difference between the two is the difference between a product decision and a strategy.

Nature

Nature operates independently of markets. Climate change, extreme weather, resource depletion, and pollution are structural forces that reshape where people can live, what businesses can operate, and which supply chains survive.

The physical consequences are already measurable. Wildfires, flooding, and rising insurance costs are changing the economics of operating in geographies that were previously viable: major insurers have withdrawn entirely from the California homeowners’ market, and commercial property insurers are repricing risk globally. When the European energy crisis hit in 2022, firms that had treated energy as a background cost discovered it was their most pressing strategic concern. The underlying forces had been visible for years.

Nature also creates markets. Renewable energy, electric vehicles, sustainable agriculture, water management, carbon capture, and climate adaptation services are all industries that exist because of nature-driven change. Treating climate change only as a risk to be managed means seeing half of what is there. The threat and the opportunity are two sides of the same force, and the firms that organised around both early have built positions that late movers will struggle to replicate. Unilever’s decision to build its entire strategy around sustainability, launching the Sustainable Living Plan in 2010, was a bet on this force that competitors categorised as corporate social responsibility rather than competitive architecture. Gilead Sciences offers a less obvious example from the dataset: its annual reports emphasised globalisation and market expansion far more than Amgen’s, but its focus on computational technologies (unusual for a biotech firm) reflected a bet that data-driven drug discovery, sitting at the intersection of Innovation and Nature-driven health concerns, would become a structural advantage. It did.

Economy

The economy is the most familiar force and the one that firms already monitor most closely. Firms do not ignore economic forces. They treat them as background conditions to adjust for rather than structural changes to organise around, and that distinction matters.

A rise in interest rates triggers a review of the capital structure. Recessions trigger cost-cutting. These are responses, not strategies.

Economic forces become strategic themes when they pass the same tests as any other force: sustained structural growth, cross-industry relevance, and actionability. The rise of digital payment systems has been growing for over a decade and affects retail, financial services, logistics, healthcare, and government services simultaneously. A firm could organise its strategy around the shift from cash to digital payments and find applications across its entire portfolio. The growth of emerging-market middle classes, hundreds of millions of consumers entering the middle class for the first time across Asia, Africa, and Latin America, will reshape consumer goods, financial products, healthcare, education, and entertainment for decades. The shift toward subscription-based business models has restructured how value is created and captured across software, media, automotive, and increasingly physical goods. Each of these could anchor a firm’s strategy for a decade or more, which is fundamentally different from treating the economy as a set of conditions to react to quarterly.

Where the forces converge

The most powerful strategic themes sit where two or more forces overlap, and this is where the three-to-four-theme finding from my research becomes most practically useful.

Apple’s emphasis on computational technologies (Innovation) and consumer culture (Society) positioned it at a convergence that HP, focused on business markets and workforce management, missed entirely. Unilever’s emphasis on sustainability (Nature) and consumer behaviour (Society) placed it at a similar intersection. Tesla’s positioning combined electric vehicle technology (Innovation), tightening environmental regulation (Power), falling battery costs (Economy), and consumer preference for sustainable luxury (Society), creating strategic depth that competitors could not easily replicate because they would need to match Tesla across all four dimensions simultaneously.

The three-to-four number emerged from the data rather than from theory. Apple emphasised three driver clusters significantly above HP, and Cisco emphasised three above Nokia. Gilead, operating in a more evenly matched competitive pair, emphasised four above Amgen. Three or four themes is large enough to create a combination that competitors are unlikely to replicate, because it requires simultaneous commitment across multiple domains, yet small enough that the firm can sustain deep commitment across all of them over many years. A single theme creates vulnerability: if the force stalls, the firm has no fallback. More than four creates the same diffusion that conventional strategy produces when it tries to respond to everything.

Scanning a single force in isolation produces observations. Scanning for intersections between forces produces themes.

The practical exercise is to take each of the five forces, identify the drivers within it that are reshaping your industry, and look for the intersections: where do two or three forces overlap in ways that create a structural opportunity or threat?

The answer will differ by firm, even within the same industry. Two firms can pursue the same theme and still compete, because the way each converts the theme into products, processes, and operating decisions creates its own differentiation. But the firms that identify those intersections and commit to building around them over years are the ones that, historically, have captured the dominant share of their industry’s profits.

The SPINE framework is a map. What separates the firms that win from the firms that don’t is whether the forces shape the strategy or sit in a section of the strategy document labelled “external environment” and left there.

That distinction, between monitoring forces and organising around them, is where competitive outcomes are determined.

The pattern is familiar. The CEO presents the strategy to analysts. The same deck, lightly edited, goes to the leadership team. A condensed version reaches middle management at a town hall. By the time it arrives at the frontline, it has been stripped of everything that made it coherent. Ask a regional sales manager what the firm’s strategy is, and sometimes you will get a blank look.

The usual diagnosis is that the message needs to be simpler, or that leaders need to communicate more often. Both may be true. But the deeper problem is structural: there is one story, and it was written for one audience. Everyone else is receiving a translation of something that was never written for them.

Why one story fails

Each stakeholder group has unique needs. When a CEO describes “positioning around the shift to renewable energy,” every audience is asking a different question.

An employee is asking whether their role changes, whether they need new skills, and whether their job is secure. A shareholder wants to know the cost, the timeline for returns, and what happens if the transition takes longer than expected. Customers want to know whether this changes what you sell them. Suppliers are calculating whether they need to invest in new capabilities to keep the contract. And a regulator is asking whether you are getting ahead of compliance requirements and whether your experience could inform policy.

Same strategic logic. Five different concerns. One story cannot address all five without becoming so abstract it addresses none. And abstraction is exactly what happens. The strategy gets reduced to a tagline, something about “leading the transition” or “building for the future,” which is broad enough to apply to everyone and specific enough to motivate no one.

Same logic, different hero

The fix is to tell five stories built on the same strategic foundation, each framed around a different protagonist. The structural principle is straightforward: in a compelling narrative, the audience is the hero and the organisation is the guide. Each stakeholder group needs to see themselves as the central character navigating a challenge, with the firm’s strategy as the plan that helps them succeed. The strategic logic stays constant. The narrative frame shifts with the audience.

When a story works across all five audiences, it becomes a decision filter rather than a communication exercise. An employee facing a choice between two priorities can ask, “Which of these serves our strategy?” and answer it without escalating it. A sales team can explain to a prospect why the firm’s positioning differs from competitors. A board member can evaluate a proposed investment by testing whether it strengthens the firm’s position around its chosen forces. Narrative, done well, functions as infrastructure rather than an event.

This is easier to see with a concrete example. Take a mid-sized industrial firm that has selected three structural forces as its strategic themes: the shift toward automation in manufacturing, tightening environmental regulation, and the growing shortage of skilled technical labour. Those three forces are the strategic foundation. Every story is anchored to them. But each audience encounters them differently.

For employees, the story is about navigating change. The industry is transforming, and the skills that built their careers are evolving. The firm has identified where things are heading and is investing in retraining, new tools, and roles that will be more valuable as automation advances. The employee is the protagonist, adapting to a changing industry, and the firm provides a clear path forward. That path needs to be specific: these are the skills we are investing in, this is how your role will evolve, and this is what success looks like for you in three years. The alternative, left unstated but understood, is that firms which do not make this investment will see their best people leave for companies that do.

For shareholders, the same three forces produce a different story with a different structure. Start with the financial logic: automation reduces labour dependency and improves margins as skilled workers become harder to find. Environmental regulation is tightening, and firms that invest early in compliance avoid the cost penalties that will hit laggards. The shareholder needs to see today’s investments connected to compounding returns, with a concrete capital commitment, a timeline, and the logic linking external change to financial performance. Shareholders do not need to understand the retraining programme. They need to understand why the investment makes their position stronger as the forces accelerate.

For customers, the story shifts again. The same automation and environmental forces are reshaping the customer’s own operations. They need suppliers whose products and services are designed for the emerging world rather than the past. What makes this story different from the other two is the emphasis on alignment: the firm and the customer are exposed to the same structural forces, which creates a natural partnership. The customer has no use for the firm’s internal retraining details or its capital allocation plan. What matters to them is evidence that the firm is building toward the same future they are.

For suppliers, the concern is continuity and co-investment. A firm that is repositioning around automation and environmental regulation will need different things from its supply chain over the coming decade. The supplier story makes that direction transparent: here is where we are heading, here is what we will need from partners who can support that direction, and here is how growing alongside us creates opportunities for your business. Without this story, suppliers experience strategic change as a series of unexplained shifts in requirements. With it, they can invest in the capabilities that will make the partnership more valuable as the forces accelerate. The alternative for a supplier that does not adapt is straightforward: the firm will source from partners better positioned to meet its future needs.

For regulators, the story emphasises transparency and constructive engagement. The firm has identified specific structural forces and is getting ahead of compliance requirements rather than waiting for regulation to arrive. The regulator’s concern is balancing innovation with public protection, and a firm that can show its thinking, share its experience, and contribute to policy development is more valuable to a regulator than one that treats compliance as a reactive burden. The regulator story frames the firm as a constructive participant in shaping the rules that will govern its industry for the next decade.

Five stories. One strategic logic. The forces, the positioning, and the direction do not change between audiences. The hero, the problem, and the plan do.

What this looks like in practice

Satya Nadella’s repositioning of Microsoft after taking over as CEO in 2014 is one of the clearest examples of multi-audience strategic narrative executed well. The strategic logic was consistent: cloud computing was a structural force that would reshape enterprise technology, and Microsoft would organise around it. But the story Nadella told varied by audience. To employees, the message was cultural: a shift from “know-it-alls” to “learn-it-alls,” with a growth mindset replacing the defensive, Windows-centric identity of the Ballmer era. To investors, it was financial: a specific target of $20 billion in annualised cloud revenue by 2018, achieved nearly a year early. To customers and developers, it was about access: Microsoft products available on iOS, Android, and Linux, a move that would have been unthinkable under previous leadership. Each audience received a story built on the same strategic foundation but framed around their concerns. Microsoft’s market capitalisation grew from roughly $300 billion to over $3 trillion in the decade that followed.

The contrast with Nokia is instructive. When Stephen Elop arrived as Nokia’s CEO in 2010, his “burning platform” memo diagnosed the crisis entirely in internal terms: accountability failures, leadership gaps, poor collaboration. The memo was a single story, and it was written for one audience: the internal organisation. It gave shareholders no investment logic, gave customers no reason for confidence, and gave suppliers no visibility into where Nokia was heading. A crisis diagnosed in purely internal language provides no narrative that external stakeholders can act on. Three years later, Nokia sold its handset business to Microsoft for $7.2 billion, a fraction of the value it had held a decade earlier.

What goes wrong

The most dangerous failure is when the five stories contradict each other. The employee story promises that new skills will make their roles more valuable. The shareholder story promises that automation will reduce headcount by 20%. Both may reflect real elements of the strategy, but when employees read the investor presentation, and they will, the contradiction destroys trust faster than any amount of subsequent communication can rebuild it. The discipline required is to ensure that all five stories are internally consistent, which sometimes means accepting that a hard truth must appear in every version rather than being hidden from one audience and revealed to another.

Inside-out framing is the second failure. “We are building world-class capabilities in automation” is a statement about the firm. “Your operations are about to face a labour shortage that conventional hiring will not solve” is a statement about the customer. The second opens a conversation. The first closes one. Most strategy communication defaults to inside-out framing because it is easier to describe what you are doing than what your stakeholders are facing. The effort to reframe the stakeholder’s problem is precisely what makes the narrative useful.

Jargon kills stories faster than complexity does. “We are executing a synergistic, digital-first transformation” communicates nothing. Replace it with what is actually changing, for whom.

How to know whether it is working

The simplest test is comprehension. Select ten employees at random from different levels and functions and ask them to describe the firm’s strategy in their own words. If the answers are vague, inconsistent, or default to operational language (”we are trying to grow” or “we are focused on efficiency”), the story has not landed.

A harder test is whether stakeholder behaviour reflects the strategy. Are employees making decisions that serve the strategic themes without being told to, because they understand the logic well enough to apply it themselves? Are customers choosing you because of your positioning around the forces reshaping their market, or for legacy reasons that will erode? Are suppliers investing in capabilities that align with your direction because they understand where you are heading?

Strategy needs repetition to land. A CEO who presents the strategy once at a town hall and considers the job done will find that three months later the organisation has reverted to whatever it was doing before. The story needs to be told constantly, updated as conditions change, and reinforced through decisions that visibly connect to the themes. When a firm makes an acquisition, the leadership team should explain how it connects to the themes. When a team is restructured, the connection should be explicit.

The goal is narrative as infrastructure: the strategic logic providing the foundation, and the five stories making it operational across every audience the firm needs to move.

The implication is that change arrives as an event. Something happens, suddenly, and the firms that survive are the ones that react fastest. This framing has shaped two decades of strategic thinking and produced an entire vocabulary built around speed: agile transformation, pivots, fail fast. If disruption is an event, then the correct preparation is reflexes.

I think this framing is wrong. And I think it leads to a strategic mistake that most firms are currently making.

The forces were visible for years

The European energy crisis following Russia’s invasion of Ukraine in 2022 is a useful place to start, because it is recent enough that most executives remember living through it. Energy prices doubled and tripled within months. Firms that had treated energy as a background cost discovered it was their most pressing strategic concern. The business press described it as a disruption.

But the underlying forces had been visible for years. European dependence on Russian gas was well documented. The fragility of concentrated energy supply chains had been discussed in policy circles for more than a decade. The accelerating economics of renewable alternatives were measurable in investment data and deployment figures. A firm that had selected energy transition as a strategic theme before 2022 was positioned to absorb the shock. A firm that had treated energy as a background condition was exposed by it. The difference lay in whether the firm had read the structural forces and organised around them in advance, not in how fast it reacted when the crisis arrived.

This pattern repeats across every major “disruption” story when you examine the timelines rather than the headlines.

The internet was a curiosity when I first used it in 1994, arriving at university to find an email account waiting for me. It took another decade before e-commerce reached a scale that meaningfully threatened physical retail. Amazon was founded in 1994 and did not turn a consistent annual profit until 2003. The retail industry had nearly ten years of visible, measurable signal before online commerce became a force that could no longer be treated as marginal. The firms that were eventually described as “disrupted by Amazon” had a decade to organise around digital commerce. Most used that decade to optimise their existing store estates.

Electric vehicles tell a similar story on a different timeline. Tesla delivered its first Roadster in 2008. The forces behind it, battery cost reduction, tightening environmental regulation, and shifting consumer preference toward sustainability, were visible years before any traditional automaker described itself as disrupted. Most automakers treated EVs as a regulatory compliance exercise well into the mid-2010s, a full decade after the underlying forces were measurable.

The sustainability movement that reshaped personal care took a generation to travel from niche activism to mainstream consumer expectation. Unilever organised its entire strategy around this force, launching the Sustainable Living Plan in 2010 and tying executive compensation to sustainability targets. Over the following decade, Unilever’s purpose-led brands (Dove, Hellmann’s, Seventh Generation) grew 69% faster than the rest of the portfolio and delivered 75% of the company’s growth. The strategy has faced legitimate scrutiny since, particularly around whether the sustainability premium is durable in a cost-of-living crisis and whether Unilever’s operational performance matched its strategic ambition. But the competitive positioning was real: while competitors categorised sustainability as corporate social responsibility, Unilever treated it as architecture. By the time the rest of the industry caught up, Unilever had spent years building capabilities and supply chains around a force that others had been merely monitoring.

None of these were surprises. They were structural forces that built over years, were measurable throughout, and reshaped industries through sustained, compounding pressure rather than a single event.

The difference between a force and a fad

If most industry-reshaping change is slow and structural, then the strategic skill becomes the ability to distinguish between forces that will compound over decades and fads that will spike and disappear, rather than speed of reaction.

This is harder than it sounds, because at any given moment the business press is full of both. In 2013, Google Glass generated enormous coverage and trend reports predicting that augmented reality would transform every industry within five years. It disappeared within two. Cloud computing, by contrast, had been growing consistently since the mid-2000s, across economic cycles. Google Glass was a fad, and cloud computing was a force, but in real time both received comparable media attention.

I use three tests to separate the two. A candidate force must pass all three to qualify as what I call a strategic theme.

Has it been growing for ten or more years at a rate significantly greater than GDP growth? This is a retrospective test, and deliberately so. It filters out temporary enthusiasm. Electric vehicles pass. Segway scooters, launched with extraordinary hype in 2001 and still a niche product two decades later, do not. Cloud computing was a structural change already underway and measurable. The metaverse, as conceived in 2021, was a prediction about what might happen. Strategy built around predictions is speculation. Strategy built around structural changes already in motion is positioning.

An obvious objection is that some forces appear to arrive fast. Large language models went from a research curiosity to a boardroom priority within two years of ChatGPT’s launch. But the ten-year test is about the underlying force, not the product that makes it visible. The computational infrastructure behind LLMs, GPU processing power, large-scale data, transformer architecture, and cloud computing capacity had been building for well over a decade. What arrived suddenly was public awareness, not the force itself. The firms best positioned to capitalise on generative AI in 2023 were the ones that had been investing in computational infrastructure and data capabilities since the early 2010s. The product was new, but the force behind it was not.

Does it affect multiple industries? A force that reshapes only a single niche is too narrow to anchor a firm’s strategy. Ageing populations pass this test decisively. They reshape healthcare, financial services, housing, consumer goods, labour markets, and the care economy simultaneously. A firm that organises around them can find applications across its entire portfolio and across multiple geographies. The test is designed to filter out forces that are real but strategically insufficient. Telemedicine, for instance, is a genuine structural shift that has been growing for over a decade. But it affects healthcare delivery and, at the margins, insurance and technology infrastructure. A pharmaceutical company or a health system could build around it. A diversified conglomerate could not. The multi-industry test ensures that a theme creates enough strategic surface area to justify organising a firm around it.

Can a firm explicitly allocate capital and talent to it? This is the test that most candidate forces fail. “The world is becoming more uncertain” is an observation, not a theme. No firm can build an R&D programme around uncertainty. Renewable energy, by contrast, leads to specific investments, specific acquisitions, specific hires, and measurable targets.

Most firms’ current AI strategies fail this test. “We are investing in AI” is not actionable in the way the framework requires. It does not specify which AI capabilities the firm is building, which business decisions those capabilities will change, or how capital is being allocated against measurable milestones. A passing version looks more like “We are investing in machine learning for drug discovery, with a dedicated team, a three-year capital commitment, and quarterly milestones tied to pipeline acceleration.” The difference is between acknowledging a force and organising around it, which is the difference between awareness and strategy.

The severity of requiring all three tests is deliberate. My research showed that the firms which dominated their industries selected three or four themes, not twenty. The small number is part of what makes the approach work.

What disruption gets wrong about preparation

The disruption framing leads to a specific type of preparation, and it is the wrong one.

If you believe change arrives as events, you invest in agility. You build rapid-response capabilities, innovation labs, and organisational structures designed to pivot quickly when something unexpected happens. The logic is defensive: we cannot predict what will hit us, so we must be ready to move fast when it does.

Understanding change as structural forces leads to a different set of investments. It starts with foresight, the ability to identify which forces are structural, which are accelerating, and which are actionable. From there it requires positioning, the deliberate decision to organise your strategy around a small number of those forces, and the discipline to hold that position across leadership changes, recessions, and competitive pressure. Structural forces reward firms that stay committed to them over decades.

The firms in my research that achieved dominant profit share did not get there through agility. They maintained their strategic orientation across 20 years, through the dot-com crash, the 2008 financial crisis, and multiple changes in competitive dynamics. Their annual reports in 2019 emphasised the same types of external forces as their annual reports in 2001. That consistency reflected conviction rather than rigidity, built on correctly reading which forces were structural and committing to them before the rest of the industry caught up.

A different question

The disruption narrative encourages a question that sounds strategic but produces anxiety rather than clarity: “What could disrupt my industry?”

The question invites speculation about unknowable events, rewarding imagination over analysis and producing long lists of potential threats that cannot be prioritised with confidence because the framing assumes that the defining characteristic of disruption is surprise.

A more productive question starts from the opposite assumption. Instead of asking what might arrive without warning, ask:

Which structural forces have been building in my industry for a decade or more, affect multiple industries, and can be acted on through specific investment and resource decisions?

The first question generates scenario planning. The second generates strategy.

The forces are there. They are measurable. In most industries, the forces that will reshape the competitive landscape over the next fifteen years are already visible in academic research, government policy, demographic data, and technology adoption curves. The firms that will be described as “disrupted” in 2040 are, in many cases, already sitting in industries where structural forces have been compounding for years. They have access to the same information as everyone else. The question is whether they will use it to optimise their current position or to organise around where the world is going.

That choice, not the speed of their reflexes, is what will determine the outcome.

All of it is directed at the same assumption: that the firm’s strategy needs to be better formulated or better executed.

I spent three years testing that assumption. I studied 8,430 companies, built a methodology to identify the 11 that achieved genuine profit dominance in their industries (just 0.13% of the sample), and then analysed 9.1 million words of annual reports across 20 years to understand what separated them from their competitors.

The finding was not what I expected. The losing firms were not badly managed or under-resourced. The gap between the winners and losers was not a gap in the quality of their strategies.

It was a gap in the direction of their attention.

Where the leadership team pointed its collective gaze, inward at operations or outward at the forces reshaping the world, determined who dominated their industry for decades. Both winners and losers operated in the same industries, had access to the same opportunities, and employed comparable people. They made different choices about what to pay attention to. That finding, if it holds, has significant implications for how we define strategy and what we ask leadership teams to do.

What attention actually looks like

Let’s analyse three of the 11 winning firms that had a dominant share of their industry’s profit pool, and compare them with the firms they beat.

Starting with Apple vs. HP. The statistical finding that Apple emphasised computational technologies significantly more than HP across 20 years of annual reports is accurate, but abstract. What it actually looked like at the level of individual words tells you far more about how attention operates.

Both Apple and HP wrote about computational technologies. Both companies were, after all, in the technology business. But the specific words were different, and the difference is revealing.

Apple’s annual reports used words like software, applications, devices, systems. HP’s used toner, laserjet, inkjet, printers, servers, desktops. Same topic. Same cluster of language about computing. One company was writing about where the industry was going. The other was writing about what it currently sold.

Apple also placed a significantly higher emphasis on consumer culture (music, marketing, advertising) at a time when it held just 1% of its industry’s profits. I’ll come back to that timing because it turns out to be a critical finding throughout the research.

The Cisco and Nokia comparison showed a different version of the same pattern. Cisco’s language focused on investments, competitors, markets, and contracts. Nokia’s focused on shares, debt, capital, compensation, employees, and benefit plans. Cisco was analysing the dynamics of its competitive environment whilst Nokia was administering its financial and organisational mechanics.

A third pair, Gilead Sciences against Amgen in biotechnology, confirmed the direction: Gilead oriented toward market expansion and global distribution, Amgen toward regulatory compliance and financial management.

There was also something revealing across the competitors as a group. Nokia, HP, and Amgen, despite operating in completely different industries, all placed disproportionate emphasis on the same types of inward-facing concerns: how they managed their people and how they structured their finances. The winning firms (Apple, Cisco, and Gilead) were not neglecting these. They simply organised their strategic narratives around something else.

A note on method

An obvious objection: annual reports are drafted by investor relations teams and reviewed by lawyers. They are not a CEO’s unfiltered thoughts. Why treat them as a proxy for strategic attention?

The objection is fair, but it misses what makes these documents useful as data. Precisely because annual reports are institutional products, reviewed and approved at the highest level over many years, they reflect the sustained priorities of the firm rather than the preferences of any single author. A CEO can say anything in an interview. What the company writes in a legal filing year after year, knowing the SEC will scrutinise it, reveals what the organisation collectively believes. The repetition across 20 years of filings is what gives the signal its weight. A single report could be noise. Two decades of consistent emphasis is institutional conviction.

I also examined a second source: the personal statements of CEOs in interviews and speeches they made during the period. In every pair, the institutional and personal voices pointed in the same direction.

John Chambers at Cisco framed his strategic logic around market transitions, business model changes, and technology shifts. When he described why Cisco was investing in a particular area, the justification was always a force in the environment rather than a gap to close against a competitor.

Stephen Elop’s “burning platform” memo at Nokia illustrates how the opposite works. (I explored this in more detail in a previous article.) Elop arrived at a company whose institutional narrative was already weighted toward financial management and internal operations. His diagnosis of the crisis was framed entirely in internal terms: accountability failures, leadership gaps, poor internal collaboration. The external forces that had destroyed Nokia’s position appeared only as things already lost to, not as forces the company could reorient around. A different CEO might have changed the direction. Elop reinforced it.

Attention becomes self-reinforcing inside an organisation through exactly this kind of loop. The CEO’s convictions shape the annual report, which shapes internal planning conversations, which shapes what gets funded. Over time, what gets funded determines what the organisation builds capability around, and that inherited capability base determines the starting position of the next CEO. The loop runs for years before anyone measures the consequences.

The negative space

What the winning firms chose not to emphasise matters as much as what they chose to foreground. None placed disproportionate emphasis on financial and economic systems, education and employment, or policy and regulation above their competitor’s level. These topics appeared in every filing, as they must. But they were background, not architecture.

The competitors were not oblivious to external forces. Technology appeared in HP’s reports. Consumer devices appeared in Nokia’s. The external forces were present in their documents, but presence is not organisation. Awareness means the force appears somewhere in your documents. Attention is different: it means the force organises your decisions. The gap between noticing something and building around it is where competitive outcomes are decided.

Why inward attention persists

If the evidence is this clear, then why do most firms default to looking inward?

Because inward attention is immediately productive. Cut costs, and the result appears in next quarter’s results. Restructure a division, and the org chart changes quickly. These are real accomplishments that produce visible progress against measurable targets.

Organising around long-term external forces offers none of this. The feedback cycle is measured in years. The connection between a strategic commitment and a financial outcome is indirect, contested, and impossible to isolate on a quarterly earnings call. A CEO who stands before a board and says, “We are reorganising our investment portfolio around three structural forces that I believe will reshape our industry over the next fifteen years,” is asking for patience that public markets are not designed to provide.

The result is an organisation that, from the inside, looks like it is executing well. Goals get set, roadmaps get built, and the leadership team achieves alignment around a set of priorities that are coherent, measurable, and pointed at the wrong thing. HP had three consecutive CEOs, Fiorina, Hurd, and Whitman, each running competent operational playbooks built around cost synergies, headcount reductions, and restructurings. The activity was real, but the direction was inward.

The attention trap works because execution against the wrong object is indistinguishable from good strategy in real time. The consequences only become visible years later, when the firm’s position reflects decisions made a decade ago. A CEO has a fixed number of hours in a week. A leadership team has a fixed number of agenda items it can meaningfully discuss in a quarter. Attention is zero-sum at the top of an organisation, and the superfirms allocated theirs differently.

Attention came first

The finding that matters most is about sequence.

The analysis I completed did not just show that superfirms paid more attention to external forces than their competitors. It showed that the attention preceded the dominance, in some cases by more than a decade.

Apple was writing about consumer culture (music, marketing, advertising, the relationship between technology and how people live) when it held 1% of its industry’s profits. This was before the iPhone and before iTunes reached any meaningful scale. In the early 2000s, when HP held 23% of the industry’s profits, and Apple was widely regarded as a niche computer maker with beautiful products and no market share, Apple’s strategic narrative was already organised around the forces that would determine the next twenty years.

The timing separates the attention finding from a simple retrospective explanation. If outward attention were a by-product of success, the practical implication would be zero. You cannot copy a by-product. But the sequence runs the other way. Apple oriented outward when it was small and unprofitable. The dominance emerged years later, as the forces Apple had been building around accelerated and its position strengthened with them. The same pattern appeared in Cisco and Gilead.

The research does have limitations worth acknowledging. Selecting firms based on profit dominance and looking backward creates survivorship bias: we see the firms that won, not the firms that oriented outward and still lost. It is also possible that the pattern reflects visionary founders (Jobs at Apple, Chambers at Cisco) rather than a mechanism any leadership team can replicate. The matched-pair design partially addresses both concerns, since the comparison firms started from positions of equal or greater strength and faced identical external forces. But analysis of six firms, however rigorous, identifies a pattern. It does not prove universal causation.

What it does suggest, with consistent evidence across three industries and two decades, is that attention precedes outcomes and may function as a driver rather than a description. If so, it is something a leadership team can deliberately redirect.

Applying the finding

I call the broader framework Thematic Strategy: the deliberate selection of a small number of long-term drivers of transformation as the organising themes for a firm’s strategy, where the themes become the anchor for every significant decision the firm takes.

The method is detailed elsewhere, but the diagnosis can start now. Five questions for a leadership team to audit where its attention is currently directed:

1. Of your five largest capital allocation decisions in the past two years, how many were triggered by an external force you had identified and committed to, versus an internal target or competitive reaction?

2. What are the three external forces your strategy is explicitly organised around? If the answer takes longer than ten seconds, you may not have them.

3. When your CEO describes the firm’s direction, does the language centre on the world outside the firm, or on the firm’s own operations, capabilities, and financial position?

4. What percentage of your last four board agendas was dedicated to discussing structural forces reshaping your industry over the next decade, versus operational and financial performance?

5. If you read your last three annual reports as a content analyst would, what story do the most frequently repeated words tell about where your organisation’s attention actually sits?

The answer to those questions is the real strategy. Everything else is aspiration.

Apple consistently achieves around 25% market share of the global smartphone market.

But its profit share? That’s a different story: 78%.

Apple accounts for 78% of all profits generated by the smartphone industry, despite having only a quarter of sales volume. This single statistic changed the way I think about business performance. It told me that the traditional measures of market leadership, whether revenue, unit sales, or market share, miss the point entirely. What matters is not how much you sell, but how much of the value you capture.

That insight became the seed of a three-year PhD research project at ESCP Business School. The question I kept returning to was deceptively simple:

What do companies that dominate their markets actually do differently from everyone else?

Decades of strategic management research have tried to answer this question through different lenses. Strategic foresight says it’s about scanning the environment and anticipating change. The resource-based view says it’s about building unique internal capabilities. Strategic positioning says it’s about finding the right place in the industry structure. Each offers part of the answer. None offers the whole picture.

Then I came across a paper from 1993 by Igor Ansoff and Patrick Sullivan that reframed the question entirely. Their argument was straightforward: there is no single success formula with universal validity. The profitability of a firm is optimised when its strategic behaviour is aligned with its environment.

This is the concept of the environment-driven firm. It doesn’t assume markets will keep growing. It continually monitors the external world for signs of demand saturation, technology substitution, social and political discontinuities. It assesses the future profitability and growth potential of its historic markets. It searches for new opportunities while divesting from unpromising ones. Most importantly, it treats the external environment as a moving reference point — a feedback loop that strategy must constantly adapt to.

What matters is not how strategy is derived, but how well it stays aligned with environmental realities over time.

This concept led me to structure my entire PhD around a single proposition:

Companies that align their strategies with external drivers of transformation can achieve market dominance.

Intuitively, it felt right. But I needed to prove it.

Three Papers, One Argument

To investigate this proposition, I needed to answer two questions in sequence before I could test anything.

First, what does market dominance actually mean, and how can it be measured? If I’m going to claim that certain firms achieve dominance, I need to define the term rigorously and identify which companies meet the threshold.

Second, what are the external drivers of transformation that firms are expected to align with? If alignment is the mechanism, I need a structured way to describe what firms are aligning with.

Only once those two foundations were in place could I test the central proposition: does strategic alignment with external drivers of transformation actually distinguish dominant firms from their peers?

I structured the research across three papers, each building on the last:

Paper 1: The Rise of the Superfirm. Defined market dominance, created a formula to measure it, and identified the firms that met the threshold.

Paper 2: Drivers of Transformation. Conducted a systematic literature review spanning four decades to map the complete landscape of external forces reshaping how firms compete.

Paper 3: Thematic Strategy — A Path to Market Dominance. Combined the prior insights by analysing 20 years of annual reports from six firms to test whether strategic alignment with external drivers distinguishes dominant firms from their competitors.

Each paper took roughly a year to complete. Each processed vast amounts of data. Together, they built a cumulative argument with each paper providing a necessary foundation for the next. Without a rigorous definition of dominance, I couldn’t identify which firms to study. Without a comprehensive framework of drivers, I couldn’t test alignment. Without the test, the proposition would remain an intuition rather than an evidence-based idea.

The Rise of the Superfirm

The first paper had a clear objective: define market dominance and find out whether it exists.

I started by rejecting the traditional measures. Revenue, sales volume, and unit market share; these tell you who sells the most, not who captures the most value. Over the long term, profit drives shareholder value. And shareholder value is what executive teams are ultimately rewarded for creating. So I defined market dominance as having a dominant share of an industry’s profit pool.

That raised a harder question: at what point does a company’s profit share become “dominant”? The threshold needs to be empirically grounded and applicable to any market. After extensive research, I found the answer in an unexpected place: antitrust law.

In 2008, Arie Melnik and colleagues published a formula for calculating the market share threshold at which dominance exists:

The formula compares the largest company in an industry with the second-largest. The key insight is that dominance increases as the gap between first and second widens. The formula produces a threshold that’s specific to each industry, so there’s no arbitrary fixed number.

I used GICS industries as ‘the market’ because the classification narrows companies to similar business activities. Companies within each industry are directly comparable, as they sell similar products and services and compete for similar customers. You could define industry differently, but the principle holds: it needs to represent a group of similar firms in genuine competition.

I applied this formula to the profit shares of companies across 81 GICS industries. The dataset covered 8,430 US-listed companies, and I used a five-year profit pool from 2015 to 2019 to avoid distortions from COVID and the 2008 financial crisis. Industries with fewer than ten companies were excluded to avoid structurally concentrated markets; I was looking for dominance earned through competition, not dominance by default.

Take Apple as an example. In that period, Apple’s share of profits in the Technology Hardware, Storage & Peripherals industry was 82%. The second-largest was Dell at 4%. Applying the dominance formula, the threshold for that industry came out at just 16%. Apple surpassed it by a wide margin.

Of the 8,430 companies analysed, just 11 met the conditions for market dominance. I called them Superfirms.

This was good news on two fronts. Market dominance exists. And it is extraordinarily rare.

With hindsight, this finding was fortunate. I had a notion of market dominance. I found a rigorous formula to test it. The result was a small, identifiable group of firms I could study further.

But identifying the Superfirms was only the beginning. The next question was how they achieved it. I developed four sequential propositions to frame the argument:

Proposition 1: Superfirm status requires a distinct competitive advantage that sets a company apart from its competitors.

Proposition 2: External drivers of transformation define and redefine competitive landscapes and alter the parameters of competitive advantage.

Proposition 3: Companies that align their strategy with external drivers of transformation are better positioned to proactively adapt and innovate, sustaining and enhancing their competitive advantage.

Proposition 4: Sustaining and enhancing competitive advantage leads companies towards Superfirm status.

The logic flows in sequence. You need a distinctive advantage. That advantage exists within an environment shaped by external forces. The firms that align with those forces can adapt and innovate. And that sustained adaptation is what leads to dominance.

But I couldn’t just state this as true. I had to prove it. And to prove it, I first needed to understand what those external drivers of transformation actually are.

Mapping the Forces of Transformation

I assumed a clear, widely accepted framework of external drivers of transformation already existed.

It didn’t.

Instead, the literature is fragmented. Terms like megatrends, disruptive innovation, creative destruction, and paradigm shifts are used inconsistently and often interchangeably. They point to real phenomena, but they lack shared definitions, a common unit of analysis, and an agreed structure.

This creates three problems. Conceptual ambiguity, where distinct forces get blurred together under loose labels. Analytical weakness, where drivers are studied in isolation without a framework showing how they relate to one another. And strategic failure, where leaders struggle to translate abstract change into concrete strategic choices.

The root cause is straightforward: there is no commonly used driver construct and no comprehensive framework spanning both concrete forces and more abstract systemic change.

That gap became the focus of my second research paper, and the most demanding part of my PhD. Where the first paper was quantitative and structured (data in, formula applied, results out), the second paper required me to read, absorb, and synthesise an enormous body of qualitative research across significantly different disciplines.

I used a systematic review of the global research literature to identify every driver of transformation discussed across economics, technology, policy, medicine, the environment, geopolitics, and social change. I built a precise search logic using a wide set of phrases that capture how transformation is described across different fields. I set strict selection rules: peer-reviewed work only, any time period, English language, and only articles where external change was the central focus.

I applied this process across two major research databases, Web of Science and EBSCO. The result was 1,234 serious research papers. More than 10 million words.

I read all 1,234 abstracts and assessed whether each paper was genuinely about drivers of transformation. Five minutes per abstract. Over 100 hours. Spread across four months, before work and at weekends. I have a mild form of dyslexia, which made the academic language especially hard going. That reduced the set to 171 papers. After filtering for journal quality and full-text access, and reading the remaining articles in full, I arrived at a core set of 88 papers representing the serious body of work on this topic.

I then used descriptive coding techniques to extract signal from noise. This requires reading every sentence carefully and, where it’s relevant to the research question, capturing a word or short phrase that assigns a summative attribute to it. The result was thousands of captured codes, from which I distilled 292 distinct drivers of transformation.

Interestingly, after about 60 articles, I had exhausted the findings. The remaining papers reinforced and refined what was already present but added no new drivers. That’s a strong signal that the review was comprehensive.

Now I had my answer to the first research question: what drivers of transformation are discussed in the academic literature? The harder question remained: how should these 292 drivers be organised into something leaders, researchers, and policymakers can actually use?

I organised the evidence into four analytical levels:

292 Drivers of Transformation. A driver affects humans and their environment. It can be concrete — electric vehicles, extreme weather, pollutants — or abstract: a pandemic, political ideology, the internet.

32 Driver Clusters. Related drivers that shape the same area of change are grouped together. Machine learning and autonomous vehicles sit within artificial intelligence and automation. Global warming and extreme weather are part of climate change.

13 Driver Families. Clusters operating in the same broad domain are grouped again. Artificial intelligence and internet technologies fall within computing and connectivity. Pollution and environmental degradation fall within environmental conditions.

5 Transformative Forces. At the highest level, the driver families aggregate into five fundamental forces shaping long-term transformation: Society, Power, Innovation, Nature, and Economy. Together, these form the SPINE framework.

• Society captures the broad forces that shape how humans collectively live and interact: population demographics, urbanisation, consumer culture, health and wellbeing.

• Power encompasses the forces that govern how authority and influence are distributed: geopolitics, governance, policy and regulation, conflict.

• Innovation covers the forces driving technological and scientific progress: computing, connectivity, artificial intelligence, biotechnology, new materials.

• Nature addresses the forces arising from the physical environment: climate change, pollution, resource depletion, biodiversity.

• Economy captures the forces shaping how value is created and exchanged: globalisation, trade, financial systems, business models.

I also conducted a sentiment analysis and a literature growth analysis. For each driver cluster, I assessed whether academic discourse framed its impact as positive, negative, or both. And I calculated the compound annual growth rate of publications for each cluster as a proxy for rising importance.

Combining these two signals produced the Growth-Impact Matrix: a 4x4 framework mapping driver clusters according to how fast they’re growing and whether their impact is positive or negative. The growth axis runs from baseline to exponential, reflecting how rapidly research attention is increasing. The impact axis runs from threat to opportunity, reflecting whether the academic discourse frames the driver’s effects as harmful or beneficial. This provides leaders with a way to identify which drivers are accelerating and whether they represent opportunities to pursue or threats to manage.

With this in place, I had two core inputs for testing the central proposition of my PhD: a definition and measure of market dominance, and a structured framework of the external drivers of transformation. The final paper brought them together.

Testing It: Twenty Years of Annual Reports

The third paper was the test. Do Superfirms align their strategies with external drivers of transformation more extensively than their direct competitors?

I needed a data source that would reveal strategic intent over a sustained period, be comparable across firms, and be publicly available. Annual reports (10-K and 20-F filings) met all three criteria. These documents require management to disclose strategic and operational information affecting the company’s performance and outlook. They’re rich in narrative about where the company is heading and why.

The design was built around matched pairs. I selected three Superfirms and paired each with a competitor from the same GICS industry that had held the leading share of industry profits during 2000 to 2004 but subsequently lost that position to the Superfirm. This gave me a direct comparison: two firms facing the same market conditions, the same competitive pressures, and the same external forces, but with very different outcomes over the following fifteen years.

Crucially, comparison companies were in the same GICS industry. This ensured they shared similar core activities, served comparable customer bases, faced the same macroeconomic trends and regulations, and competed for similar resources. Any difference in strategic narrative would therefore reflect genuine strategic choices, not structural differences in business context.

The three pairings were Apple vs Hewlett-Packard (HP), Cisco vs Nokia, and Gilead Sciences vs Amgen.

For each company, I analysed annual reports from 2000 to 2019, twenty years and 120 reports in total. The total text across all reports was 9.1 million words.

I used dictionary-based content analysis. For each of the 32 driver clusters in the SPINE framework, I created a dictionary of keywords derived from the full word list across all 120 reports. After extensive filtering (removing infrequent words, mapping relevant terms to each driver cluster, and deduplicating), I arrived at 419 single words and 35 two-word phrases distributed across 23 active dictionaries.

Using the software package MAXQDA, I coded every report against every dictionary and measured the density of each driver cluster in each company’s narrative expressed as the percentage of total words that matched each dictionary.

The analysis then proceeded in three stages. First, I calculated the average density for each company to identify which driver clusters each firm emphasised. Second, I ran independent two-tailed t-tests to establish whether differences between paired firms were statistically significant. Third, I classified each driver cluster by its importance in the text: not important, average, elevated, or significant.

This gave me a rigorous, quantitative basis for answering whether a Superfirm’s strategic narrative was measurably different from its competitor’s.

What the Data Revealed

Apple vs HP

In the early 2000s, both Apple and HP were established players in personal computing. Apple centred on design and software innovation with the Mac, which was renowned for its user experience but held a minority share of the PC market. HP was a dominant force in printers, enterprise hardware, and computing infrastructure, with a vast installed base of corporate customers and one of the strongest brands in technology.

Over the next two decades, their trajectories diverged dramatically. Apple launched the iPod, then the iPhone, then the iPad, reinventing consumer technology category by category. HP went through a series of leadership changes, a contested merger with Compaq, and struggled to define a coherent strategic direction beyond its legacy enterprise business.

The content analysis told a clear story of divergence. Across the 23 driver clusters, Apple and HP each placed a greater emphasis on eight, with a similar emphasis on seven.

Apple placed computational technologies at a level of significant importance — 1.06% of all words in its annual reports belonged to this driver cluster, far above HP’s 0.56%. Apple also placed significantly greater emphasis on consumer culture and globalisation. These three themes tell us something important: Apple oriented its entire strategic narrative around technology-led consumer innovation on a global scale.

HP, by contrast, placed significant emphasis on business markets and structures (1.37% vs Apple’s 0.98%), reflecting its deeper orientation toward enterprise operations, corporate clients, and operational infrastructure. HP also emphasised education and employment more than Apple.

The distinction is stark. Apple looked outward to the consumer and the world. HP looked inward to the enterprise.

Significant difference measured using a t-test where * is a p-value lower than 0.05 and ** is a p-value lower than 0.01.

Cisco vs Nokia

During the early 2000s, Cisco and Nokia were both leaders in global communications. Though they operated in adjacent segments: Cisco in networking infrastructure powering the internet backbone, Nokia in mobile handsets and telecom equipment, both were classified within the same GICS industry, and both provided the foundational technology for how the world communicated.

By the end of the period studied, Cisco had cemented its position as the dominant provider of enterprise networking, expanding into security, collaboration tools, and cloud infrastructure. Nokia, once the world’s largest mobile phone manufacturer, had lost its handset business to Apple and Samsung and had pivoted to become a telecom equipment provider, a fundamentally different and smaller business.

Across the 23 driver clusters, Cisco placed greater emphasis on six, Nokia on ten, with seven similar between them.

Cisco’s most significant emphasis was on business models — 4.16% of all words, far above Nokia’s 3.22%. Cisco also placed significantly greater emphasis on business markets and structures, and consumer culture. These themes reveal Cisco’s strategic focus on how products and services were delivered, how markets were structured, and how customer needs were evolving.

Nokia, by contrast, emphasised financial and economic systems (1.26% vs Cisco’s 0.56%) and education and employment. Nokia’s narrative was weighted toward financial management and workforce considerations rather than market-facing innovation.

Cisco oriented toward the environment. Nokia oriented toward its own financial and organisational mechanics.

Significant difference measured using a t-test where * is a p-value lower than 0.05 and ** is a p-value lower than 0.01.

Gilead Sciences vs Amgen

In the early 2000s, both Gilead and Amgen were well-established biotech firms. Gilead was growing rapidly through its specialisation in antiviral treatments for HIV and hepatitis. Amgen was a leader in oncology and nephrology, widely regarded at the time as the dominant firm in the space — Fortune magazine once called it a “new colossus” of biotech.

Over the next two decades, Gilead expanded aggressively into global markets, built a blockbuster portfolio of antiviral drugs, and ultimately achieved a dominant share of its industry’s profits. Amgen remained a significant player but never captured the same level of profit dominance, despite its strong scientific capabilities and large product portfolio.

Across the 23 driver clusters, each firm placed greater emphasis on six, with eleven similar between them.

Gilead’s significant emphases were on business models (3.22%) and business markets and structures (1.31%). It also placed significantly greater emphasis on computational technologies and globalisation. Like Apple and Cisco, Gilead oriented outward: toward market expansion, technology adoption, and the evolution of how its products reached patients globally.

Amgen emphasised financial and economic systems (0.88%) and policy and regulation (0.31%) significantly more than Gilead. Amgen’s narrative was anchored in regulatory compliance and financial management.

The same pattern emerged. The Superfirm looked outward. The competitor looked inward.

Significant difference measured using a t-test where * is a p-value lower than 0.05 and ** is a p-value lower than 0.01.

Across all three pairs

The cross-industry synthesis crystallised the findings. Of the 23 driver clusters, nine showed a statistically significant difference between the Superfirm and its competitor. Superfirms, on average, emphasised 3.3 driver clusters significantly more than their competitors. Their competitors emphasised 2.0.

But the decisive finding went beyond volume. When I plotted these results on the Growth-Impact Matrix, a clear pattern appeared: Superfirms consistently chose to emphasise driver clusters that scored higher — clusters with rapid growth trajectories and net positive impacts. Their competitors’ emphases tended to cluster around slower-growing or negatively-framed drivers.

I created a simple scoring system to quantify this. Growth is scored from +1 (baseline) to +4 (exponential). Impact is scored from -2 (threat) to +2 (opportunity). The effect of each driver cluster is the product of its growth score and its impact score.

When I summed the effects for each firm, the Superfirms scored an average effect of +6.7. Their competitors scored -0.3. The gap was enormous.

This is a key finding of the entire PhD. It’s not just that Superfirms talk more about external drivers. It’s that they talk about the right ones: the ones with high growth and positive impact. Their strategic narratives are oriented toward structural tailwinds. Their competitors’ narratives are oriented toward operational and financial housekeeping.

There was also a nuance worth noting. Some driver clusters were emphasised by multiple Superfirms — business models, for instance, was significant for both Cisco and Gilead. But the specific words driving the emphasis were different. Cisco discussed ‘products’ and ‘services’. Gilead discussed ‘patients’ and ‘treatments’. Same theme, unique manifestation. This would become a key element of the theory that emerged.

Thematic Strategy

The findings from the three research papers converged on a single idea. Market-dominant firms don’t just have better products or stronger brands. They make deliberate, sustained strategic choices to align with a small number of external drivers of transformation, and they do this more consistently and more emphatically than their competitors.

I called this idea Thematic Strategy.

Thematic Strategy proposes that a firm can find a path to market dominance by adopting a structured approach: identify a small number of long-term drivers of transformation from the external environment, select them as strategic themes, and make those themes the anchor for every subsequent decision the firm takes.

The concept is built on six propositions:

One: Strategic alignment with long-term drivers of transformation provides a path to market dominance. The research identified nearly 300 drivers of transformation. A theme is drawn from these. It is external to the firm, observable over time, and indicates a fundamental structural change, and not a fad or a trend.

Two: Themes must be observable over many years, indicate an underlying structural change, have cross-industry relevance, and lead to action. A theme must pass three tests. Is it observable and sustained? Does it indicate structural change? And does it prompt action from leadership?

Three: Selected themes are the starting point and anchor for all subsequent strategic and operational decisions a firm takes. Once chosen, a theme becomes the organising principle that shapes planning, investment, operations, and culture. It is not a side initiative. It is the centre of gravity.

Four: Multiple themes can be combined to create a distinct competitive advantage. The Superfirms typically emphasised three or four themes simultaneously. These themes can operate across different dimensions of the business and reinforce each other.

Five: The most significant competitive advantages reside with themes that have an expected high-growth future trajectory and a net positive impact. When a firm selects themes that are growing rapidly and that academic and market discourse frames positively, it positions itself along structural tailwinds. This is what the Growth-Impact Matrix captured.

Six: The specific manifestation of each theme can be unique to each firm, and this manifestation provides further opportunities for a distinct competitive advantage. Multiple firms can pursue the same overarching theme. But the way each converts it into products, processes, and operating models can be different. This embeds the theme within proprietary capabilities that competitors cannot easily replicate.

Thematic Strategy sits at the intersection of three established streams of strategic management. It extends strategic foresight by directing it toward a structured set of drivers, not just open-ended scanning. It extends the resource-based view by providing a guide for which resources to build. And it extends strategic positioning by showing how firms can anticipate and reshape industry boundaries rather than simply finding their place within them.

In practice, Thematic Strategy operates at the corporate level. Its primary mechanisms are exogenous drivers of transformation. Once selected, these themes provide the strategic logic that connects what the firm sees in the world, what it invests in, and where it competes. The themes are the through-line. Everything else follows from them.

What makes Thematic Strategy different from existing strategic frameworks is that it elevates the theme — a driver of transformation — as the central unit of analysis. Strategy research has traditionally separated position, resources, and capability into distinct conversations. By placing the theme at the centre, Thematic Strategy creates a common reference point that bridges all three. The theme tells you where to position, what resources to build, and which capabilities to develop.

The core question Thematic Strategy poses to any leadership team is this:

Have we aligned our strategic positioning and capabilities with the most impactful drivers of transformation?

The evidence from this research suggests that the firms that can answer yes to that question, and sustain that answer over many years, are the ones that capture a dominant share of their industry’s profits.

What This Means

Most firms define strategy from the inside out. They start with what they have, their products, their people, their processes, and ask how to make it better. Thematic Strategy says start from the outside in. Look at the structural forces reshaping the world. Choose a small number. Make them yours.

The research showed that across technology, biotech, and telecommunications, the firms that dominated their industries’ profit pools did so by aligning early with a handful of high-growth, positive-impact drivers of transformation. They didn’t chase every trend. They didn’t spread their strategic attention thin. They picked their themes and made them the centre of everything.

Their competitors, facing the same external forces and operating in the same markets, oriented inward; toward financial structures, regulatory management, and operational mechanics. Those are necessary activities. But they are not what creates dominance.

For any executive reading this, the implications are practical. Identify the structural forces that will shape your industry over the next decade. Select three or four. Test them against the criteria: are they observable and sustained, do they indicate structural change, and do they demand action? Then make those themes the anchor for every investment, capability, and positioning decision your organisation takes.

Don’t try to respond to everything. The Superfirms didn’t. They chose a small number of themes and committed to them over many years. The discipline is in the selection and the sustained commitment, not in breadth of coverage.

In a world defined by these drivers of transformation, the firms that thrive will be those that align early, act decisively, and sustain that alignment over time.

That is Thematic Strategy. And the evidence suggests it works.

By 2019, HP held 6% of its industry’s profits. Apple held 78%.

What interests me about this is not the outcome. Technology companies rise and fall; disruption stories are everywhere. What interests me is that nothing HP did was wrong. Carly Fiorina drove cost synergies and competitive scale. Mark Hurd cut 14,500 jobs in his first year to sharpen operational efficiency. Meg Whitman restructured the business and eliminated 55,000 positions to restore what she called “a balance of growth and efficiency.” Three consecutive CEOs, over fifteen years, each running the same competent playbook. And the company still lost its leading position.

Good strategy, executed competently, against the wrong things.

What ‘good strategy’ actually means

The conventional definition of strategy seems reasonable enough. Good strategy means clear goals, targeted resource allocation, and consistent execution. Know your market, watch your competitors, measure what matters, improve what works. Most of the strategy frameworks in circulation, from Porter’s Five Forces to the Balanced Scorecard to OKRs, are built around this logic. They are tools for understanding your current position and improving it.

HP had all of it. So did Nokia, which was the world’s largest mobile phone manufacturer when it began its decline. So did Amgen, which in the early 2000s held 195% of its industry’s biotechnology profits. (That figure is not a misprint: the hundreds of other biotech firms were collectively losing money.)

These companies were models of execution. The problem was somewhere else.

What the data shows

I spent two years reading annual reports. Twenty years of filings from six companies, 9.1 million words in total. The premise was simple: what a management team writes about year after year, in legal documents reviewed by lawyers and auditors, is a reliable window into what they actually believe matters. You can’t fabricate strategic intent in an SEC filing. The consequences are too serious.

What I found was starker than I expected.

Apple’s annual reports were full of language about technology, consumers, and global markets. HP’s were full of language about business structures, competitive positioning, and workforce management. The difference wasn’t subtle and it wasn’t recent. Apple was writing about the external forces reshaping its industry from the early 2000s, when it still held 1% of its industry’s profits and HP held 23%. Before the iPhone. Before iTunes had scale. Apple was oriented toward the world. HP was oriented toward itself.

Cisco versus Nokia is even starker. Nokia’s annual reports were dominated by financial language: shares, equity, debt, shareholder obligations. Its management was writing about its balance sheet at the precise moment the forces reshaping communications technology were accelerating around it. Cisco was writing about those forces. Nokia was writing about its capital structure.

Stephen Elop’s “burning platform” memo, written when he arrived as Nokia’s CEO in 2010, diagnosed the crisis entirely in internal terms: accountability failures, leadership gaps, poor internal collaboration. Every sentence pointed inward. The external forces that had destroyed Nokia’s position appeared only as things already lost to, not as things that could have been seen and built around.

The losing firms were not ignoring the world. Technology appeared in HP’s reports. Consumer devices appeared in Nokia’s. Amgen wrote about globalisation. The forces were present in their documents, but they didn’t organise anything. They didn’t shape capital allocation, acquisition decisions, or where the CEOs spent their attention. They were context. The winning firms treated the same forces as architecture.

How to tell which kind of firm you’re in

The test is uncomfortable because most people know the answer before they finish asking it. And it applies whether you run a $200M distribution business or a global technology firm.

Think about your last three major strategic decisions and where they originated.

Were they triggered by an external force your firm had identified and committed to building around? Or by something internal: a competitor move to respond to, a margin target to hit, a capability gap to close, a cost structure to improve?

Neither answer is automatically right or wrong. Internal decisions are real and necessary. The question is about the ratio and the direction of travel. A firm that consistently justifies its biggest decisions by reference to internal logic is anchored to its present position, not to where the market is going. That’s fine in a stable world. The world is not stable.

The second question is harder.

When your leadership team describes what your firm is building toward, is the answer primarily about the company: our capabilities, our culture, our market position? Or primarily about the world? What forces are reshaping your industry? Which ones are you organised around?

The firms that get this right don't necessarily have better answers. They have a different habit. Once a quarter, their leadership teams ask a version of the same question: which external forces are we actually organised around, and is that still the right bet? Not as a planning exercise. As a standing item. The question itself changes what gets noticed, what gets funded, and what gets quietly dropped.

If those answers come easily, with specifics, the firm has a compass. If the answer is vague, or defaults quickly to competitive positioning, the firm is navigating by what it can already see rather than by where things are going.

The Death of ‘Good Strategy’

The problem with good strategy is that it feels like strategy. Goals get set, roadmaps get built, reviews get run, alignment gets achieved. The organisation is coherent and busy. And then, years later, the market reflects something different from what all that activity was supposed to produce.

HP was not poorly run. Nokia was not poorly led. Amgen was, by most measures, excellent at what it did. The conventional tools of strategy gave them no warning and no diagnosis, because those tools are built to improve a current position, not to identify whether that position sits on shifting ground.

What separated the 11 firms that achieved genuine profit dominance from the 8,419 that didn’t was not the quality of their execution. It was the object of their attention. The winning firms found structural forces in the world, changes already in motion, measurable and accelerating, and organised their major decisions around them over years, sometimes decades. The losing firms organised around their current position and improved it.

That distinction is not captured in any standard strategy framework. It is not a gap in execution. It is a gap in what we call strategy.

That is what needs updating. Not the firms. The definition of strategy.

Eleven.

Not eleven percent. Eleven companies. Out of 8,430.

That is 0.13% of the firms studied. So rare, I gave them a name: superfirms.

In 70 of the 81 industries, not a single company achieved it. The competitive system worked exactly as economics textbooks say it should: profits distributed, multiple firms viable, no one running away with the money. That is the normal state of competition. What happened in the remaining 11 industries was something else entirely.

The list doesn’t look like what you’d expect

I expected technology firms. The winner-takes-all logic of digital markets is well documented: network effects, switching costs, platform lock-in. Apple, Microsoft, Alphabet. Their presence on the list is not surprising.

What stopped me were the others.

UPS captured 80% of Air Freight & Logistics profits. FedEx, one of the most admired logistics companies in the world, captured 51%. On any normal measure, FedEx looks dominant. But UPS held 80% while FedEx held 51%, which means FedEx’s result, extraordinary in isolation, reads as second place. The gap between them is what matters. Scale doesn’t explain it. FedEx is also enormous.

Then there is Genuine Parts Company. Nobody at a dinner party recognises this one. It distributes automotive replacement parts across 17 countries. Sixty thousand employees. $23 billion in revenue. Operating since 1928. It has raised its dividend every single year for over 60 consecutive years. Not glamorous. Not in the press. Not a consumer brand. And yet it held 48% of its industry’s profits, sitting in the same analytical category as Apple.

Walt Disney held 60% of entertainment. Procter & Gamble held 59% of household products. Unilever held 51% of personal care against 60 competing firms including L’Oréal. These are companies that ship packages, make soap, sell shampoo, and run theme parks. This is not a Silicon Valley story.

Gilead Sciences is the most striking entry. Biotechnology had 553 competing firms during the study period. Not 55. Not 5. Five hundred and fifty-three. And one company, Gilead, captured 48% of the profits. The top three firms combined (Gilead, AbbVie, and Amgen) took more than 100% of the industry’s profits. Which means hundreds of biotech firms were collectively destroying value while a handful generated all of it. Superfirm status in a 553-firm market cannot be explained by limited competition.

The firms that should have won but didn’t

What makes these 11 companies worth studying is not just that they won. It’s who they beat.

Apple held 1% of its industry’s profits from 2000 to 2004. HP held 23%. HP had revenues that dwarfed Apple’s, a product line spanning enterprise servers, consumer PCs, printers, and peripherals, and an established position in every major market Apple wanted to enter. By any conventional measure, HP was the better-positioned company.

Over the next 15 years, Apple captured 78% of Technology Hardware profits. HP ended up with 6%.

Cisco held 63% of Communications Equipment profits. Nokia, which had once been the world’s largest mobile phone manufacturer, held 7%.

Gilead emerged in Biotechnology while Amgen, the firm that had held 195% of its industry’s profits in the early period (a figure that is not a misprint), fell to third place. Amgen was so dominant in the early 2000s that even after accounting for loss-making competitors dragging the profit pool down, it still held almost double what you’d expect. And it still lost.

The losing firms weren’t badly managed. They weren’t underfunded or operationally incompetent. HP was well-run. Nokia was well-run. Amgen was genuinely excellent at what it did. That is precisely what makes the result interesting. Good management, strong resources, and established market position were not enough.

It’s about focus

I ran a content analysis across 120 annual reports: 20 years of filings for each of the six firms in the paired comparisons. Nine point one million words, coded against a map of 32 drivers covering the external forces reshaping every major industry.

The methodology was straightforward. What a management team writes about in an annual report is a reasonable proxy for where their attention goes. And where attention goes is a reasonable proxy for where strategy goes.

The pattern in the data was consistent enough to be uncomfortable.

Winning firms wrote about the world. They described external forces: shifts in technology, changing consumer behaviour, geopolitical realignments, demographic transitions. And they connected those forces to their decisions. The language was outward-facing. What is changing in our environment, and what are we building around it?

Losing firms wrote about themselves. Internal priorities dominated: capital structures, workforce efficiency, regulatory compliance, operational improvement. The language was inward-facing. What are we doing, and how well are we doing it?

Both types of firms were busy. The losing firms weren’t idle. They were executing, improving, optimising. The difference wasn’t effort. It was direction.

John Chambers of Cisco described his strategic logic in a single sentence: “I always compete against market transitions, business model changes and technology. Never against competitors.” The themes weren’t inputs to Cisco’s strategy. They were the filter through which every decision passed.

Nokia competed against competitors. And it had 7% of its industry’s profits to show for it.

What the rarity actually means

Seventy of 81 industries had no superfirm. That number matters as much as the eleven that did.

It means dominant competitive advantage is genuinely rare. Not because most companies are badly run, but because the kind of sustained attention required to build it is something most organisations never develop. The default mode of competition is to improve operations, watch competitors, and respond to quarterly results. It produces firms that are competent and fragile at the same time. Competent because they execute well. Fragile because they are organised around a present that is already becoming the past.

The 11 superfirms weren’t smarter in the conventional sense. They weren’t luckier. What separated them from 8,419 other companies was a decision about where to look.

They looked out. They identified the structural forces reshaping their markets. Not the trends, not the quarterly data, not the competitor moves. And they organised their major decisions around those forces over years, sometimes decades.

That is what 0.13% looks like from the inside.

Most firms never make that choice. They improve instead. Improvement is measurable, manageable, and immediately rewarding. Organising around long-term external forces is slower to show results and harder to justify in a budget meeting.

Which is exactly why so few do it. And exactly why the ones who do end up alone at the top of their industries with no one close enough to threaten them.

Here’s the uncomfortable truth I arrived at through my research:

Your strategy will fail if it’s built the way most firms build theirs.

And most firms start in the same place: with ego-driven ambition.

Leaders decide what they want:

• to be the best

• to be the biggest

• to be the fastest

• or whatever goal sounds impressive in the moment

This thinking feels strategic. It isn’t.
It produces generic strategies that look interchangeable across an industry.

If you start with internal ambition, you will always lean toward the same priorities, the same initiatives, and the same blind spots everyone else has. That’s why so many strategies sound identical: growth, efficiency, innovation, scale. The usual suspects.

And none of it works.

What I Learned: Distinctive Strategy Must Come From the Outside

Through my research, I found that a truly distinctive strategy begins somewhere completely different.

Instead of starting with internal ambition, start with 3–4 external drivers of transformation. These are large-scale forces reshaping society, technology, and the economy — forces no single company can control, but every company must respond to.

Drivers like:

• artificial intelligence

• climate and environmental pressure

• crypto and decentralised systems

• geopolitics and shifting power structures

To name just four.

When you anchor your strategy in themes of this magnitude, something important happens: your organisation stops reacting to the latest trend and starts aligning itself with the forces shaping the future.

Now ask yourself:

What kind of strategy would you build if your entire business were designed around these drivers?

It wouldn’t look anything like your competitors’.
It wouldn’t be a collection of disconnected initiatives.
It wouldn’t lean on generic ambition or vague aspiration.

It would be distinctive by design.

And that’s the foundation of Thematic Strategy — the strategic operating system.

The Essence of Thematic Strategy

When I talk about Thematic Strategy, I’m not referring to a single tool or a collection of disconnected ideas. It’s a complete system - one I developed over a three-year doctoral programme studying the world’s most successful firms, including Apple, Microsoft, and Gilead Sciences.

At its core, Thematic Strategy explains how firms unlock market leadership by aligning themselves with the external forces shaping the future. The framework in the diagram breaks this system into three levels:

1. The central mechanisms (Foresight, Positioning, Assets)

2. The core (Alignment)

3. The enablers (Agency of Others, Discipline, Storytelling)

Here’s how each element works.

Foresight: Strategy Begins Outside the Firm

Foresight is where strategy starts.

It forces leaders to look beyond internal ambition and examine the external drivers of transformation — societal shifts, new technologies, regulatory change, geopolitical tension, climate pressure, and more.

Foresight answers one question:
What conditions are reshaping the world?

Without this, strategy becomes guesswork. With it, strategy becomes anchored in reality, not in ego or wishful thinking.

Positioning: Compete Where the Future Is Going

Positioning comes next:

If foresight tells leaders what’s changing, positioning tells them where they should play.

A firm only gains a meaningful advantage when it leverages specific external drivers. It stops copying competitors and starts building where others aren’t looking.

Great positioning is always:

• distinctive

• intentional

• anchored in future drivers, not present industry norms

This is where firms begin to separate themselves from the market.

Assets: The Engine of Competitive Advantage

Assets are the foundation. They are what actually make advantage possible.
But they must meet four criteria:

• Valuable — they solve real problems

• Rare — not widely possessed

• Hard to Copy — earned over time

• Organised to Capture Value — the firm is structured to use them

The firms I studied that achieved market dominance did so by building up assets that competitors couldn’t replicate.

Alignment: The Centre of Everything

Strategy only works when foresight, positioning, and assets align.
If they point in different directions, the entire system collapses.

Alignment ensures that:

• I’m using the right assets

• to reinforce the right positioning

• driven by the right external themes

This is what turns strategy from a document into a force multiplier.

Agency of Others: Strategy Is Executed Through People

A strategy doesn’t live inside a plan. It lives inside people.

Agency of Others means shaping the behaviours, decisions, and actions of the people who will execute the strategy: employees, partners, suppliers, and customers.

If people don’t carry the strategy forward, it never leaves the page.

Discipline: The System That Protects Momentum

Discipline is the operating rhythm - the governance, reporting, and structures that convert intent into consistent action.

Without discipline:

• strategy becomes episodic

• progress becomes optional

• priorities drift

The firms that win establish systems that enforce the strategy as a continuous activity.

Storytelling: Where Strategy Becomes Belief

Storytelling is often misunderstood. It’s about meaning, not marketing.

A strategy only takes hold when people understand it, believe in it, and can repeat it.

Storytelling:

• explains why the themes matter

• clarifies the firm’s direction

• creates internal alignment

• builds external momentum

A strategy without storytelling is invisible.

Apply the learnings from this article: Click here to download the Thematic Strategy Canvas to create strategies the way market leaders do.

How It All Fits Together

The inner three triangles are the strategic pillars where the strategy lives: Foresight, Positioning, Assets.

The outer triangle represents the mechanism that drive behaviour: Agency of Others, Discipline, Storytelling.

The internal triangle represents Alignment, which keeps the system coherent.

When these components reinforce one another, firms unlock the potential for market leadership. But not through ambition, but through structure.

This is Thematic Strategy.
It’s how firms stop guessing, stop copying, and start leading.

It didn’t take me long to understand that tactics don’t create lasting advantage. Anyone can copy tactics. But very few can copy assets.

The firms that dominate their markets win because they own things that are difficult, sometimes impossible, for competitors to replicate. Those assets compound over time, turning small early advantages into market control.

That’s the shift I made in my own work: stop chasing wins and start building assets. But not just any assets. Assets that meet four strict filters: valuable, rare, hard to copy, and organised to compound.

Four Filters for a Real Strategic Asset

To keep myself honest, I run every strategic decision to create or invest in an asset through four filters. If it doesn’t pass all four, I don’t invest in it.

1. Valuable

First, it must solve a real problem that people care about. Not a hypothetical issue. Not something that sounds smart. Something that matters.

When an asset consistently helps people or improves outcomes, it creates leverage. That leverage compounds.

Examples in my own work include things like:

• A system that consistently improves customer service

• Data that reveals insights to help us run the business

• A product that eliminates a major friction point

If it’s not valuable, it has no strategic weight.

2. Rare

Rarity is underrated. If everyone else already has it or can build it quickly, it won’t give you an edge.

I look for things that come from original observation, deep pattern recognition, or long-term exploration that most people aren’t willing to do. Rarity often shows up when you’re early, contrarian, or simply paying attention in ways others aren’t.

For example, Amazon’s ability to deliver any product to any address within 24 hours is rare. I can’t think of another business that can do this on such a scale and with such consistency.

A rare asset instantly separates you from competitors who are all drawing from the same playbook.

3. Hard to Copy

Build things that competitors can’t recreate without spending years catching up.

Hard-to-copy assets usually come from:

• Relationships built over time

• Supply chains that took years to establish

• A team with exceptional or unique talents

• Financial power that buys optionality

These things aren’t downloadable. They aren’t easily replicable. They’re built over years.

If a competitor can knock it off on a weekend, it’s not an asset.

4. Organised to Compound

An asset only becomes powerful if a firm is actually structured to use it. It’s not enough to have something valuable, rare, and hard to copy. It needs systems, processes, and habits that turn that asset into real advantage.

I ask myself:

• Am I organised to fully exploit this?

• Do I have the workflows and operational backbone to capture the value this asset can create?

If the answer is no, the asset sits idle. It doesn’t matter how strong it looks on paper.

When a firm is set up to leverage an asset repeatedly, through consistent execution, feedback loops, and intentional reuse, its value multiplies.

Part of a Strategic System

I write constantly about Thematic Strategy, the system that unlocks market dominance. I developed during my three-year doctoral programme.

The system forces you to build things that strengthen your position year after year.

Markets change. Algorithms change. Trends come and go.
But an asset designed to compound keeps working in the background regardless.

So, whenever you create something, a model, a piece of content, a system, a relationship, ask four questions:

1. Is this valuable?

2. Is it rare?

3. Is it hard to copy?

4. Is it organised to compound?

If the answer to any of those is “no,” don’t expect it to create real advantage.

A serious strategy should make clear which external forces matter most, what choices follow from that assessment, and which capabilities must be built or abandoned as a result.

If these links are missing, the strategy is incomplete regardless of how compelling it sounds.

What leaders should not accept is a strategy that promises flexibility that avoids commitment. That is not ‘keeping your options open’. It is deferred decision-making.

The role of strategy is to make hard choices.

When strategy is unclear or misaligned, better execution accelerates the wrong trajectory.

Resources are deployed efficiently toward objectives that no longer make sense.

This is why execution-focused turnarounds so often disappoint. They improve operational metrics without addressing the structural causes of underperformance.

Execution answers the question “how well are we doing this?”

Strategy answers “should we be doing this at all?”

Confusing the two delays the real work.

Markets transform due to advances in technology, new regulations, demographic shifts, geopolitics, and social changes. (To name just a few).

These are not events. They are drivers of transformation.

Strategy exists to decide which of these forces the firm will align with, and which it will deliberately ignore.

Without that alignment, choices become reactive. Capabilities are built for yesterday’s conditions. Underperformance is inevitable even if short-term results look acceptable.

Misalignment rarely announces itself. It accumulates quietly in the background.

By the time outcomes deteriorate, it’s impossible to turn it around without a seismic organisational transformation.

The confusion arises because both involve the future, but they operate at different levels.

Planning assumes the direction is broadly correct and focuses on sequencing actions. Strategy questions whether the direction itself makes sense, given how the environment is changing.

When the two are conflated, organisations optimise execution against assumptions that are no longer valid. The plan is delivered no matter what, and the strategy remains unexamined.

This is why well-run organisations deliver industry-average performance.

Strategy sets the direction. Planning directs the work needed to get there. One cannot substitute for the other.