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Strategy and the Strategist: How It Matters Who Develops the Strategy

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  • Eric Van den Steen

    (Harvard Business School, Strategy Unit)

Abstract

This paper addresses primarily two questions. First, when or why should a company's strategy be developed by its CEO versus by some outside analyst or other insider? Second, how does strategy, properly defined, interact with vision (in the sense of a strong belief) about various decisions? In the process, the paper also identifies three new criteria that make a decision strategic and derives two new explanations why strategies often reflect the background of the strategist. The paper studies these questions using a (new) functional definition of strategy as 'the smallest set of choices to optimally guide the other choices.' With regard to the first question - when or why should a company's strategy be developed by its CEO - the paper shows that strategy formulation by the CEO (or by a strategist with control over the right decisions) leads to both a better strategy and better execution when the strategic decision is controversial. With regard to the second question, the paper shows that a strategist's vision (as a strong belief) may improve implementation, but only if two conditions are met: the strong belief must be about a strategic decision and that decision must be controlled by the strategist. Vision about non-strategic decisions may in fact hurt the strategy's implementation.

Suggested Citation

  • Eric Van den Steen, 2016. "Strategy and the Strategist: How It Matters Who Develops the Strategy," Harvard Business School Working Papers 17-002, Harvard Business School.
    • Handle: RePEc:hbs:wpaper:17-002
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    1. is not listed on IDEAS
    2. Mary J. Benner & Todd Zenger, 2016. "The Lemons Problem in Markets for Strategy," Strategy Science, INFORMS, vol. 1(2), pages 71-89, June.
    3. Florian Englmaier & Stefan Grimm & Dominik Grothe & David Schindler & Simeon Schudy, 2021. "The Value of Leadership: Evidence from a Large-Scale Field Experiment," CESifo Working Paper Series 9273, CESifo.
    4. Eric Van den Steen, 2018. "The Strategy in Competitive Interactions," Strategy Science, INFORMS, vol. 3(4), pages 574-591, December.
    5. Dessein, Wouter & Santos, Tano, 2019. "Managerial Style and Attention," CEPR Discussion Papers 13527, C.E.P.R. Discussion Papers.
    6. Prat, Andrea & Dessein, Wouter, 2019. "Organizational Capital, Corporate Leadership, and Firm Dynamics," CEPR Discussion Papers 13513, C.E.P.R. Discussion Papers.
    7. Rajiv D. Banker & Xinjie Ma & Carol Pomare & Yue Zhang, 2023. "When doing good for society is good for shareholders: importance of alignment between strategy and CSR performance," Review of Accounting Studies, Springer, vol. 28(2), pages 1074-1106, June.
    8. Wilden, Ralf & Leiblein, Michael J. & Lin, Nidthida, 2024. "Exploring performance heterogeneity: Integrative insights from strategic management and marketing," Journal of Retailing and Consumer Services, Elsevier, vol. 79(C).

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