Why Managers Need to Understand Strategy — Even If They Don’t Set It
- — Senior leaders set strategy, but managers determine how it actually shows up in everyday work, through the priorities, trade-offs and decisions they make.
- — Strategy rarely lives in one document; managers need to read across plans, budgets and leadership priorities to find a consistent picture of what the organisation is choosing to pursue and what it is not.
- — Teams should start from the organisation's strategic priorities and work outward to their own outcomes, rather than starting with a project list and retrofitting a strategic justification.
- — The shift from reporting activity to demonstrating outcome, and from tracking numbers to knowing which ones would change a decision, is what turns metrics into a genuine management tool.
- — Understanding strategy also means seeing trade-offs consciously and being able to explain how a team's work connects to the business outcome, not just repeat what the strategy deck says.
Knowing what strategy is — and why it matters — is one thing. Knowing what it means for your team’s priorities, decisions and metrics is another.
A strategy can be clear at the top but still lose its way as it moves across the organisation.
Senior leaders may set the strategy, but managers determine how it shows up in everyday work — through the choices they make about priorities, resources, projects, trade-offs and team behaviour.
Consider the Tata Nano. Ratan Tata’s original vision was to create a safe, affordable car for the masses. A Harvard Business School case examines how that vision was translated into the Nano project and the internal process changes required to deliver it.
A later INSEAD case, based on first-hand research and face-to-face interviews, explicitly examines the Nano’s execution failure. It argues that the strategic move had a strong value proposition and viable profit logic, but that the organisational alignment required to execute it was not equally strong.
The implication for managers is important. They need to understand strategy well enough to align their choices, decisions and priorities with what the organisation is trying to achieve. But they also need to understand it well enough to recognise when execution is deviating from intent — so that operational reality, emerging risks and deviations can travel upward.
Strategy has to travel downward. Reality has to travel upward. Managers sit at the centre of both.
That is what makes strategic understanding an important managerial capability.
Where Strategy Shows Up — and What to Look For
Strategy does not always sit neatly in a single document clearly stating, “This is the strategy for our organisation.”
It may show up across several places — annual plans, business-unit plans, leadership priorities, budgets and investment choices, relevant product or market plans, and investor presentations or annual reports.
So start with the clearest sources available to you. Then look across them for a consistent picture of what the organisation is choosing to pursue — and what it is choosing not to.
Read them to understand the choices.
Look for answers to a few questions:
Where is the organisation choosing to focus?
Which customers, markets, products, geographies or opportunities are being prioritised?
How does it intend to win?
Through cost, differentiation, service, speed, innovation, reliability — or something else?
What is the organisation trying to achieve as a result?
Growth, margin improvement, retention, productivity, market expansion, resilience — or another priority outcome?
What is deliberately receiving less priority?
Which markets, initiatives, investments or ways of working will not receive the same resources or attention?
If those choices are not stated clearly, look at what the organisation is actually doing: what leaders repeatedly emphasise, where money and people are being invested, which markets or products are receiving attention, and which issues keep getting escalated.
Treat these as signals to validate, rather than assumptions to quietly build your plans around.
A statement such as grow faster, put customers first or drive efficiency gives direction. But it becomes useful to a manager only when it helps distinguish what matters more, where resources should go and what should receive less attention.
The aim is not to memorise the strategy. It is to understand the choices well enough to make better choices yourself.
Connect Your Team’s Work to the Strategy
To connect their work to strategy, managers need to know two things: what the organisation is trying to achieve, and what outcome their own team is expected to create in support of it.
Once you have a clearer view of the organisation’s strategic priorities, you may naturally take your existing projects and try to connect them to the strategy.
But here is what we often don’t realise.
With enough effort, almost any project can be linked to efficiency, profitability or growth. Once that link is made, you may feel confident that the project is “strategic” and everything is aligned — even when it may not genuinely deserve that level of priority.
The way to avoid this is to reverse the sequence.
Instead of beginning with the project list, begin with your company’s strategy.
Ask first:
What are the organisation’s strategic priorities?
Then:
What business outcome would show that this priority is being advanced?
And next:
What outcome does our team need to create that would contribute to that business outcome?
But this is where teams often falter.
They don’t first ask what outcome needs to change, and most often the conversation often stays at the level of activities. Teams can describe those activities in considerable detail — what was done, launched or delivered.
What is harder to explain is what is different in the business because of it.
The shift is to look for the change created by the work — not just the work itself.
So instead of saying:
“This is what we did this quarter.”
say:
“This is what changed because we did it.”
A sales team may increase outreach by 40%. Did qualified pipeline grow?
A product team may release three new features. Did customers actually use them — and did that usage improve an outcome the business cares about?
Activity measures tell us that work happened. They do not, by themselves, establish that the work created strategic value.
That shift — from activity to outcome — is one of the most important moves in building business acumen.
Now is the time to connect that team outcome to the larger business outcome.
Think of it as a value-creation chain:
What does our team do? What changes because of it? And how does that change influence a business outcome we care about?
For some functions, the connection may be relatively direct. For Sales, for example, the link to revenue may be easier to see. For others, it may happen through several steps.
Take Operations. Improving process quality may reduce errors and effort. That lowers cost, which in turn improves margins.
The connection does not need to happen in one step. What matters is that you can explain the chain — not just claim the destination.
Once that connection is clear, return to the projects receiving your team’s time and resources and ask:
“Does this work deserve the time, resources and attention we are giving it?”
And, where necessary:
Should its scope, pace or priority change?
Start with strategy, not the project list. Move from activity to outcome. Those two shifts help ensure that the team’s work is genuinely connected to what the organisation is trying to achieve.
Metrics That Help You Decide, Not Just Report
Once you are clear about the outcome your team is meant to influence, the next question is:
How will you know whether that outcome is actually moving?
Most managers already work with KPIs. The challenge is not having more numbers. It is knowing whether the numbers you pay attention to are telling you if the intended change is happening — early enough for you to act.
Two questions are especially useful:
What result are we trying to achieve?
What would tell us early that we are moving towards — or away from — that result?
Take customer retention. Retention itself is an important KPI, but it is also a late one. By the time the number falls, the underlying problem may have existed for months.
Earlier indicators — such as whether customers complete onboarding, begin using the product or reach an important milestone — can signal much sooner whether retention is likely to improve.
Managers may not define or own every KPI themselves. But they should understand which metrics matter for the outcome they are trying to influence and what those metrics are telling them.
A useful test for any metric receiving regular management attention is:
“If this number changed significantly, what decision would we make differently?”
If there is no clear answer, the metric may still be useful for reporting. But it may not be helping much with management.
The point is not to track more numbers. It is to know which numbers help you see early enough whether the intended outcome is being achieved — and whether you need to act differently.
See the Trade-Offs
Making progress on one outcome can put pressure on another.
Growing revenue through heavy discounting may weaken margins.
Reducing inventory may improve working capital but affect product availability.
Increasing service levels may improve customer experience but raise cost.
So the question is not only:
“Is this decision helping us achieve the outcome we want?”
It is also:
“What else could be affected by this choice?”
Trade-offs are part of business. The important thing is to see them and make them consciously — rather than improve one outcome while creating a problem somewhere else.
Understanding strategy gives managers a clearer basis for deciding which outcomes matter most, which trade-offs are acceptable, and what should not be compromised.
What This Capability Does for You
Understanding strategy helps you make better sense of the business around you.
When an MD or CEO talks about growth, margins, customer priorities, investment choices or market position, you can better interpret what those priorities mean for your part of the business.
It also improves the conversations you can have with senior leaders. Instead of reporting only what your team has done, you can discuss the outcomes you are trying to influence, what the numbers are telling you, the trade-offs involved and where support or decisions may be needed.
And it gives your team greater clarity — not only about what to do, but why it matters and what success should look like.
This becomes especially valuable when priorities shift or resources tighten. You have a clearer basis for deciding what deserves attention, what may need to change and what should receive less priority.
Strategy understanding is not about repeating what was written in the strategy deck.
It is about understanding what the organisation is trying to achieve — and being able to show how your team contributes to it.
Priyanka Sahay is a Leadership Faculty at GlobalGyan Leadership Academy with experience across corporate leadership, entrepreneurship, and organisational development. She holds an MBA in International Business and is a qualified lawyer and psychologist. Her corporate experience, followed by building and managing her own venture, has given her a practical understanding of strategy, operations, people, and business decision-making. She works with middle and senior-level managers to develop strategic thinking, business acumen, and leadership effectiveness. Her multidisciplinary background brings together commercial, legal, and behavioural perspectives to help leaders make better decisions and navigate complex organisational challenges.
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