Strategy Questions Plague CEOs

A businessman in a suit without a tie moves a piece on a chess board — Source: Shutterstock

Published on: August 27, 2025 at 4:38 pm

Many people struggle to even define strategy or come up with a good one for their own career development, much less create an effective one for their team, department, or organization.

Academy of Management Scholar Donald Hambrick of Pennsylvania State University, who published an article in Academy of Management Perspectives on this topic, said that people ask him about strategy more than any other subject that he’s researched and written about.

“A lot of companies have used the framework in that paper, and a lot of professors teach it as well,” Hambrick said. “The article was motivated by my work with senior [leadership] teams out of recognition that they weren’t really sure of what a strategy even is.

“It’s a word that rolls easily off their tongue, but sometimes they would assume that it’s a one-line slogan or it’s something about achieving superior shareholder returns or this or that, but it’s none of those things exactly—it’s no one decision,” he said. “It’s a host of decisions that have to form a whole, and that’s where the five elements of the diamonds come into play.”

According to Hambrick and coauthor James Fredrickson of the University of Texas at Austin, the five major elements of strategy are:

Arenas: Where will we be active?
Vehicles: How will we get there?
Differentiators: How will we win in the marketplace?
Staging: What will be our speed and sequence of moves?
Economic logic: How will we get returns?

“These are the five touchstones or elements that make up a strategy, and leaders have to have answers to all five, and they have to form a coherent, dovetailed whole,” Hambrick said. “It resonates with executives to this day.”

***

A sample of Hambrick’s AOM research findings:

Author

Daniel Butcher

Daniel Butcher is a writer and the Managing Editor of AOM Today at the Academy of Management (AOM). Previously, he was a writer and the Finance Editor for Strategic Finance magazine and Management Accounting Quarterly, a scholarly journal, at the Institute of Management Accountants (IMA). Prior to that, he worked as a writer/editor at The Financial Times, including daily FT sister publications Ignites and FundFire, as well as Crain Communications’s InvestmentNews and Crain’s Wealth, eFinancialCareers, and Arizent’s Financial Planning, Re:Invent|Wealth, On Wall Street, Bank Investment Consultant, and Money Management Executive. He earned his bachelor’s degree from the University of Colorado Boulder and his master’s degree from New York University. You can reach him at [email protected] or via LinkedIn.

View all posts