The Attention Economy of Strategy

What your leadership team looks at matters more than what it decides.

Many executives worry they have a strategy problem. Especially when things are not going to plan. They react by calling in consultants, launching new programmes, and changing incentives.

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.