By Terence Tsai

Have you ever come across this familiar scenario in your organisation? Talented, sharp-minded employees gradually become difficult to manage. They question decisions, resist obedience, and challenge authority in meetings. Managers often privately complain that their star performers are capable, but too insubordinate.

At first, the solution might seem to lie in human resource management, whether through promotions, pay rises, adjusting reporting lines, or job rotations. But, in this article, CEIBS Associate Professor of Strategy and International Business Terence Tsai suggests instead that resistance from high performing employees rarely stems from the individual, and is instead an early warning from the organisation’s strategic system signalling a loss of direction, a phenomenon he calls “strategic drift.”

When high performers resist their managers, it’s often not an issue of their own, but a symptom of larger strategic failure. Issues could include blurred priorities, imbalanced resource allocation, and siloed departmental goals.

Strategic drift doesn’t mean an absence of strategy; often it’s exactly the opposite, the pursuit of too many muddled strategies at once. Its danger lies in its subtlety. Like a chronic illness, it quietly infiltrates daily decisions. It begins with capable employees growing confused and asking questions, then spreads to leadership, resource allocation, and culture, until the organisation, overwhelmed by busyness, loses its judgement.

Strategic drift is not simply a managerial glitch, but a systemic syndrome. Below, I analyse the damage that strategic drift inflicts on companies and suggest ways in which they can strive to regain strategic focus.

What challenges arise from strategic drift?

Strategic drift is never a sudden event, but a gradual and pervasive incremental deviation. First, it dulls an organisation’s perceptiveness. Once this deviation becomes entrenched, three fundamental problems arise: boundary erosion, internal friction, and innovation stagnation. Though seemingly unrelated, these problems are different symptoms of the same disease.

Boundary erosion: From core focus to unfocused expansion

What are strategic boundaries? They are the clear definitions that a firm sets in terms of where they aim to win, and what they should and should not do.

As these anchors come loose, decision-making subtly shifts, first from “Should we do this?” to “Can we do this?”, and then from “Is this aligned with our strategy?” to “Is this an opportunity?”

Suddenly, the company may find itself saying “yes” to every opportunity: a fortuitous chance to enter a new market, an unpromising client’s potential upside, or the use of a catchy label to misleadingly spice up its story. On the surface, these moves may seem savvy. But as these “why not?” bets pile up, the company’s core focus blurs over time.

What does this look like in practice?

Annual strategy meetings turn into wish lists, with participants trying to be innovative yet stable, to pursue new growth while shoring up the core. Resources are spread evenly. Every department secures funding; none is truly deprioritised or empowered.

The threat of boundary erosion may seem mild—the company keeps running, growth momentum persists—but power fragments and paths diverge. True strategic drift is not choosing the wrong strategy; it is having too many strategies at once. It is not abandoning priorities; it is losing sight of what truly matters.

Internal friction: From collaboration to silos

As companies scale, it is rarely their products that first lose definition, but rather the way in which employees and teams collaborate.

Decision-making chains lengthen, coordination costs rise, and once tightly meshed gears start running independently. What began as a sensible division of labour solidifies into isolated fiefdoms, each department pursuing its own logic, goals, and definitions of success.

When it comes to employees, the clearest sign of internal friction is being busy but unproductive:

• Meetings multiply while decisions stall
• Metrics become more detailed while real growth drivers blur
• Time is wasted on process checks, and attention is drained by alignment efforts
• Everyone advances projects, but no one drives overall direction

At this point, systems replace judgment, and processes stand in for strategy. Though the company’s machinery keeps running, organisational insight and collaborative will steadily erode. In this climate, those truly capable of grasping core issues become increasingly nonconformist and happy to challenge the status quo.

They resist passive compliance, challenge authority, and frequently bypass the chain of command—not out of defiance, but to compensate for systemic ambiguity with personal judgment. Their dissent should not be viewed as a problem, but a signal that strategic intent can no longer penetrate organisational layers.

The danger inherent in internal friction is gradual erosion rather than a sudden disaster. Everyone ticks their boxes, yet the organisation drifts towards inefficiency; each element works to prove itself right while the broader system loses its sense of purpose.

Innovation stagnation: From bold moves to safe bets

When strategic drift and organisational dysfunction accumulate, innovation suffers most. This does not happen suddenly, but gradually, like the proverbial frog being boiled in hot water:

• Products are still iterated, but their directions converge
• Marketing continues, but narratives grow more cautious
• Reporting remains frequent, while new ideas dwindle

At the core of innovation stagnation lies a shift in mindset. Strategic drift erodes senior leaders’ confidence in the future, while dysfunction isolates innovators.

As Jeff Bezos said, “Uncertainty is not risk; being stubborn is risk.”

The real danger emerges when an organisation replaces ambition with caution. When this happens, risk isn’t eliminated, just postponed. Rigidity ultimately leads to more than mere stagnation; it leads to chronic decay. To outsiders, products and company activity seem to be in full swing. Insiders know the truth—products may be evolving, but the company itself is declining.

Together, these three problems share a common root: the absence of clear strategic direction. Ultimately, organisational drift breeds employee resistance.

Only when clear direction, purpose and boundaries are restored can organisational energy be refocused. When this happens, employees willingly follow.

Rebuilding strategic focus: Restoring discipline and direction

At its core, strategic focus is not about tightening control but about making deliberate choices.

As strategy scholar Richard Rumelt emphasises, strategy is an integrated system of “diagnosis, guiding policy, and coherent action.” Without a shared diagnosis, guiding policies lack consensus; without trade-offs, action is fragmented and energy is wasted.

Restoring strategic focus means reimposing discipline on direction. This is about more than making statements—it’s an organising principle that cuts through structures, restrains impulses and unleashes creativity.

To rebuild order, companies must complete four cycles: convergence, transmission, boundary setting, and feedback.

Strategic convergence: the courage to choose

As Rumelt puts it, a strategy is not a real strategy if it doesn’t articulate a diagnosis of the problem it is trying to solve.

Many companies lose focus not because they choose the wrong direction, but because they hesitate to make trade-offs.

True focus begins with reducing complexity.

Procter & Gamble’s (P&G) transformation offers a classic example. Once a global consumer goods titan, P&G pursued an aggressive multi-brand strategy across laundry, skincare, oral care, baby care, pet care, and more, covering nearly every household category. But as its brand portfolio grew, resources scattered and innovation stalled.

Beginning in 2014, P&G decisively shed around 100 brands, narrowing its focus to 70–80 core ones. Then-CEO A.G. Lafley summed it up perfectly: “Less will be much more.”

This was no short-term fix but a structural refocus, restoring a clear diagnostic framework within the organisation to separate high-value arenas from resource traps.

The power of strategic convergence lies in reviving scarcity. When an organisation embraces its limits, its judgement sharpens.

Strategic transmission: Letting direction penetrate the organisation

Converging on the right direction doesn’t automatically mean that efforts throughout the company will be effectively aligned.

Strategy often breaks down along the transmission chain: senior leaders discuss vision, middle managers focus on performance, and frontline staff simply execute tasks. Kaplan and Norton’s “strategy maps” highlight the fact that strategy lives or dies on whether it is understood and translated across the organisation.

One company that exemplifies effective “strategy translation” is Schneider Electric China.

Presiding over several diverse units from power to industrial automation and buildings to data centres and energy management, Schneider faced the problems of blurred boundaries, overlapping customers, and internal resource conflicts as it grew in China.

In recent years, Schneider launched a “China Hub” strategy, integrating R&D, manufacturing, and supply chain locally and shifting focus from products to customer scenarios. By breaking its traditional matrix, organising teams around solutions, and delegating selected decision-making from headquarters to China, strategic intent came to be understood, adapted, and executed at the frontline.

This is more than structural change; it’s a language revolution. When every level of an enterprise can answer the question “How does what I do today contribute to the company’s winning edge?”, strategy truly has penetrated the organisation.

Strategic boundaries: Where freedom meets order

The third pillar of strategic focus is setting boundaries. Rather than restricting freedom, effective boundaries give freedom tangible form within an organisation.

As management scholar Henry Mintzberg once wrote in Strategy Safari, “Strategy is not the consequence of planning, but the opposite: its starting point.” Boundaries mark the line where planning meets emergence. They restrain impulsiveness while protecting exploration; they preserve order while fostering creativity.

In one example of how to push back on this, Chinese automotive company Geely Holding Group is now seeking to redraw this line.

Over recent years, Geely has built a vast automotive ecosystem through multi-brand, multi-path expansion, covering the brands Geely, Lynk & Co, GEOME, Zeekr, Radar, and Cao Cao Mobility. This “all-fronts advance” accelerated the firm’s growth but brought with it complexity. With the rapid rise of new energy vehicles and evolving intelligent technologies, Geely realised that excessive diversification was dulling its innovation’s edge.

In September 2024, Geely issued its Taizhou Declaration, outlining five key initiatives: strategic focus, integration, synergy, stability, and talent development. It quickly followed this with equity and platform consolidations, centralised procurement, and clearer brand boundaries, all aimed at concentrating resources on a few high-potential brands and platforms.

Clear boundaries don’t limit innovation; they provide its coordinates. They guide explorers and set the organisation’s rhythm. Within strategic focus, freedom no longer means anything goes, but rather high-density creation within defined limits.

Strategic feedback: Learning while doing

Even the clearest strategy will, in execution, clash with reality and require timely adjustment.

James March’s “Exploration and Exploitation” model highlights that organisations must balance two types of learning: exploiting accumulated experience within stable structures, and exploring new insights through experimentation and deviation. To keep a strategy alive, feedback mechanisms must be institutionalised, making action itself a continuous learning process.

Airbnb’s story shows how a crisis can reset a feedback loop.

When COVID-19 hit in early 2020, Airbnb’s new bookings plunged by about 80%, and second-quarter revenue dropped 72% year-on-year. Yet full-year revenue fell by only 30%. How?

Leadership resisted panic and blind retrenchment and returned to a fundamental question: “What is our true core value?”

They swiftly shut down non-core projects, paused transportation-related initiatives and Airbnb Studios media production, cut back on Airbnb Hotels and Airbnb Luxe, and refocused resources on unique stays and local experiences.

As external chaos grew, they turned inward, rebuilt their strategic feedback loop, and used monthly reviews to validate assumptions with data and test direction through customer stories.

Within a year, Airbnb had not only returned to profitability but also rebuilt trust with a leaner, sharper structure.

This captures the true purpose of strategic feedback. It’s not just about correcting errors but about discovery. It helps an organisation course-correct through deviations, find its rhythm amid uncertainty, and uncover new opportunities.

Such dynamic feedback keeps strategy alive and anchors individuals with lasting meaning, ensuring that exploration fuels personal motivation.

Once strategic focus is clear, organisational energy shifts from processes to conviction. The question then is how to align hearts and minds. The shift from being system-driven to meaning-driven ultimately determines whether a focused strategy delivers.

From incentives to meaning: Moving from external drivers to intrinsic buy-in

True strategic focus requires not just aligned direction, but genuine resonance of meaning.

Employees ultimately follow a strategy not because of rewards or penalties, but because they believe in it; they find their answer to the question, “Why am I here?” Meaning alignment is therefore key to turning strategy into reality.

This shift—from strategy as a plan to strategy as a mindset—unfolds in three stages: visualising the direction, clarifying the path, and making the purpose tangible.

Direction: Visualising where to win

Direction centres on clearly defining where an organisation can win; not from top-down slogans, but from tangible, company-wide objectives conveyed through effective mechanisms and tools.

Uniqlo offers a prime example.

Within Uniqlo’s global network, China is a key growth engine and operational hub. The company’s aim isn’t just to sell clothes but to help ordinary people enjoy a high-quality everyday life. Though abstract, this is made concrete for every role in the company through clarity of direction.

Within its internal management systems, each store’s targets link directly to customer experience metrics like dwelling time in-store, repurchase rates, and outfit satisfaction. These are measurable proxies for enhancing quality of life.

Just as importantly, Uniqlo aligns its management language with this purpose. Founder Tadashi Yanai emphasises that Uniqlo is not a clothing company but a lifestyle enabler and provider of tools to this end.

When direction can be seen and articulated, it becomes the organisation’s mental anchor. But unless translated into actionable steps, it remains abstract. This prompts the next challenge: how does an organisation move from knowing where to go to knowing how to get there?

The Path: Clarifying how to execute

A clear path answers the question this latter question. Knowing “how to get there” hinges on middle managers acting as “strategic translators,” breaking the company’s focus into departmental goals and individual tasks via cascading objectives.

L’Oréal China’s “5-Power Model” is a practical example.

This model covers brand, innovation, digital, operations, and sustainability power—both strategic metrics and shared organisational language—which are cascaded down through every business line and function in the enterprise.

Take L’Oréal China’s “Innovation Power” as an example:

• China is positioned as one of L’Oréal’s global innovation hubs
• In 2024, the company announced an additional RMB5 billion investment in China, with 30% dedicated to expanding its Shanghai R&D centre
• The new product development cycle shrank from 18–24 months to 6–9 months, while some co-created products—such as the Midnight Face Cream developed with Tmall—have achieved a turnaround of just 59 days

The lesson is clear: when execution path is clearly and concretely defined at every level, employees can see exactly how their role relates to the organisation’s strategy, and how the strategy plays out in their role. Their actions will then naturally align with strategy because they fully understand why things are done this way and not otherwise.

Resonance: Making the value of work tangible

The final step in strategy execution is making individuals feel that what they do matters. Without this intrinsic resonance, true organisational cohesion is elusive. At its heart, resonance answers the question “Why does my effort matter?”, creating a shared sense of value between the individual and the organisation.

Hikvision, a Chinese video security equipment company, demonstrates a culture that offers a telling example within an engineering context.

Its strength lies in a rational, meticulous, systems-driven engineering ethos. Yet in this highly technical environment, employees often get stuck in “code silos,” focused on programming and optimisation with little sense of how their work connects to real-world applications or societal impact.

To bridge this gap, Hikvision embedded a purpose-driven element into its strategic communication. It regularly invites clients from urban management, security, transport, and fire services to share how Hikvision’s solutions have tackled real-world problems. These concrete stories give engineers clear insight into the social impact of their code.

This is the power of making purpose tangible. When employees hear from those whose lives their work has improved, motivation shifts from external rewards to genuine internal resonance.

Direction, Path and Resonance form a continuous cycle, not a straight line. Without embedding meaning alignment into the organisation’s fabric, companies risk slipping into incentive-driven compliance. In response, some companies now conduct “meaning audits” quarterly or biannually, using interviews and surveys to assess employees’ grasp of strategy, clarity of their role, and sense of value alignment, swiftly identifying any “meaning gaps.”

Conclusion: Don’t do less, do more precisely

The ultimate goal of strategic focus is not simply to do less, but to do more precisely.

When a company redefines its direction and boundaries, it rebuilds its judgement and sense of purpose. Judgement tells the organisation what to reject; purpose shows individuals why to persist.

True management isn’t about controlling complexity, but about channelling energy into clear order.

Likewise, strategy’s value lies not in painting a distant vision, but in providing coordinates for every action. Great companies aren’t always right. In fact, they constantly recalibrate: returning to first principles when direction blurs, refocusing on goals amid internal friction, and reconnecting with purpose when innovation stalls.

In an age of uncertainty, the rarest resource is not ideas, but resolve.

When direction is focused and purpose resonates throughout, organisations grow organically. In this environment, “hard-to-manage” talent stops being a risk and becomes a catalyst for evolution—guided, not constrained, to forge new order.

True strategy isn’t about restricting people, but about offering them a future worth working towards.

Terence Tsai is Associate Professor of Strategy and International Business at CEIBS. His research interests include multinational corporations, sustainability strategy, environmental management, organisational theory (environmental adaptive theories) and Chinese management.