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The Cost of Strategic Ambiguity in Growing Organisations

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The cost of strategic ambiguity in growing organisations: the interlocking barriers to strategy implementation identified in research.

The finding

Michael Beer and Russell Eisenstat’s research, published in what is now MIT Sloan Management Review, identified a set of interlocking barriers to strategy implementation that they called the “silent killers” — silent because they operate largely below the visibility of the leadership teams experiencing them. Unclear strategy and conflicting priorities was named explicitly among them, and critically, their research found these barriers tend to reinforce each other rather than operate independently: unclear strategy makes conflicting priorities harder to resolve, and unresolved conflicting priorities in turn make the strategy feel less clear to the people trying to act on it.

This matters because ambiguity is rarely experienced by an organisation as a single, nameable event. It’s experienced by individual teams, at individual decision points, each interpreting a somewhat unclear strategic direction in the way that makes most sense from where they sit — and each of those interpretations can be entirely reasonable in isolation.

This is different from the more familiar complaint that a strategy document is badly written. Ambiguity of the kind Beer and Eisenstat describe can survive even careful drafting, because the document’s language may read as perfectly clear to the people who wrote it — the ambiguity only becomes visible once it’s applied by people who weren’t in the room when it was drafted, bringing their own reasonable but different assumptions to fill the gaps the document left open.

What it means in practice

The cost of this kind of ambiguity compounds in a specific way: not through any single bad decision, but through the accumulated divergence of many individually reasonable ones. Two teams, each acting in good faith on a strategy that leaves room for more than one reading, can end up pulling in genuinely different directions without either believing they’ve deviated from the plan. By the time that divergence becomes visible — often through a customer, a missed handoff, or a leadership review — a considerable amount of effort has already gone into work that, in aggregate, didn’t converge.

Quantifying this cost precisely is genuinely difficult, which is itself part of why it tends to be underweighted relative to more visible costs like a missed deadline or a budget overrun. There’s rarely a single invoice or a single lost customer that can be pointed to as “the cost of strategic ambiguity.” The cost is distributed across many smaller inefficiencies, each individually forgettable, that only become visible in aggregate — and organisations are, understandably, better at responding to costs they can see in one place than to costs spread thinly across many.

This is different from the more familiar cost of a strategy simply being wrong. A wrong strategy, once recognised as wrong, can be corrected — the organisation redirects. Ambiguity is harder to correct because it’s rarely visible as a single error. It shows up as an accumulation, and by the time the pattern is clear, unwinding it costs considerably more than clarifying the original strategy would have.

Where this varies

Growth changes the arithmetic here in a specific way. In a smaller organisation, ambiguity in the strategy is partly compensated for by informal alignment — people talk to each other enough, and frequently enough, that individually divergent interpretations get caught and corrected quickly, often without anyone framing it as a strategy problem at all. As an organisation grows, both the number of teams interpreting the strategy and the distance between them increase, while the informal correction mechanism that used to catch divergence early tends to weaken — not because people communicate less well, but because there are structurally more interpretations happening, further apart, with fewer natural opportunities for them to be reconciled before real work has been built on top of them.

This is a reasonable extension of the broader pattern Larry Greiner identified in his research on organisational growth phases, published in Harvard Business Review: mechanisms that work well at one scale — informal alignment being a clear example — become progressively less reliable as the organisation outgrows the conditions that made them work, well before anything formal replaces them.

Sector and pace of change matter too. Organisations operating in fast-moving markets, where the strategy itself is revised more frequently, have less time for any given version of the strategy to be tested against reality before the next revision arrives — which compresses the window in which ambiguity would normally be caught and narrowed through ordinary use. Organisations in more stable markets, by contrast, tend to have more opportunity for an ambiguous phrase in a strategy document to be quietly clarified through repeated application, simply because the same strategy stays in force for longer.

Looking for your own sector? The Other Sectors page points to the closest match.

Questions worth considering

  1. Where in the organisation might the same strategic priority currently be understood in more than one reasonable way?
  2. Has that divergence, if it exists, been discovered through a deliberate check, or only after work built on the differing interpretations collided somewhere downstream?
  3. As the organisation has grown, has the mechanism that used to catch this kind of drift kept pace — or has it quietly thinned out while nobody was specifically watching for it?

This perspective is part of Strategy Execution.

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Sources

Michael Beer and Russell A. Eisenstat, “The Silent Killers of Strategy Implementation and Learning,” Sloan Management Review (now MIT Sloan Management Review), 41(4), 2000, pp. 29–40.

Larry E. Greiner, “Evolution and Revolution as Organizations Grow,” Harvard Business Review, Vol. 50, No. 4 (July–August 1972), pp. 37–46; republished as an HBR Classic, Vol. 76, No. 3 (May–June 1998).

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Frequently Asked Questions

Because growth increases both the number of people interpreting the strategy and the distance between them, while typically weakening the informal correction mechanisms — frequent, close communication — that catch divergent interpretations early in smaller organisations.
No, and the distinction matters. A wrong strategy is usually visible as a single error and can be corrected directly. Ambiguity tends to surface as an accumulation of individually reasonable but divergent decisions, which is often more expensive to unwind because the divergence isn’t visible until it’s already substantial.
Research published in what is now MIT Sloan Management Review found unclear strategy and conflicting priorities tend to reinforce each other — each makes the other harder to resolve, which is part of why the combination is described as a persistent, mutually compounding barrier.
Yes, though it’s often masked by informal alignment — frequent communication that catches divergent interpretations before they compound. The underlying ambiguity can still exist; it’s simply less likely to accumulate unnoticed at smaller scale.
Because the authors know what they meant, so the language reads as clear to them. The ambiguity becomes visible only when the document is applied by people who were not in the room, bringing their own reasonable but different assumptions to fill the gaps. The page distinguishes this from the more familiar complaint that a strategy is badly written.
Because there is rarely a single invoice or lost customer that can be pointed to. The cost is spread across many smaller inefficiencies, each individually forgettable, that become visible only in aggregate. The page suggests this is part of why it tends to be underweighted relative to visible costs such as a missed deadline or a budget overrun.
According to the page, yes. In fast-moving markets the strategy is revised more often, leaving less time for any version to be tested against reality, which compresses the window in which ambiguity would normally be narrowed through use. In more stable markets an ambiguous phrase may be quietly clarified through repeated application.
Often through a customer, a missed handoff or a leadership review, rather than as a single nameable event. By then a considerable amount of effort may have gone into work that, in aggregate, did not converge. The page notes that unwinding the accumulated divergence tends to cost considerably more than clarifying the original strategy would have.