A priority is a refusal

Every executive team that has been through a strategy process can name its priorities. That is the least useful fact about them.

This note is about a gap the research documents clearly and that almost nobody reads correctly: the distance between a leadership team’s stated priorities and the movement of money and people. It is also the note where we have to be most careful, because the evidence here is broad, large, and made almost entirely of self-report.

What the research shows

Leinwand and Mainardi (Harvard Business Review, 2011) reported on a survey of 1,800 global executives, run through Strategy&’s Coherence Profiler. Sixty-four percent said they had too many conflicting priorities.

Sull, Homkes and Sull (Harvard Business Review, 2015), surveying 7,600 managers across 262 companies, found that only 55 percent of the middle managers they reached could name even one of their company’s top five priorities. Among members of the top teams themselves, just over half said they had a clear sense of how the company’s major priorities fit together.

PwC’s 28th Annual Global CEO Survey (2025) put the question to 4,701 CEOs across 109 countries, fielded in October and November 2024. Forty-two percent said their company would remain viable for less than ten years on its current path. Then the number that matters more: roughly half told PwC they reallocate 10 percent or less of their financial and human resources from one year to the next, and more than two-thirds reallocate less than 20 percent. On average, 7 percent of revenue over the prior five years came from businesses created in that period. PwC names weak decision-making processes and low resource reallocation among the principal barriers to reinvention.

What everyone gets wrong about this

Read those findings together and the standard conclusion is that companies have too many priorities and communicate them badly. The fix that follows is communication: fewer priorities, cascaded harder, repeated more often, printed on something.

Here is the claim we make that the research does not.

A priority is not a statement. It is a refusal.

If naming something as a priority has not caused you to decline something you would otherwise have funded, it is not a priority. It is a preference with better branding.

The reallocation figures are what make this more than wordplay. Half of 4,701 CEOs move a tenth or less of their money and people year over year. Whatever last year’s priorities were, the resource base barely registered them. Which means a leadership team can run a rigorous offsite, land on three genuinely good priorities, communicate them competently, and move 8 percent of the budget. Nothing in those two facts contradicts the other. That coexistence is the failure, and it is invisible to any diagnostic that asks whether people know the priorities.

It also reframes Sull’s 55 percent. The usual reading is a communication breakdown: middle managers were not told. We read it differently. With more than five priorities there is no top five to name, and a manager who cannot name one is not necessarily uninformed — he may be accurately reporting that the list does not function as a ranking. We flag that as our interpretation. Sull’s team measured awareness, not whether the list was operative.

Underneath sits the reason this stays broken in teams that fully understand the argument. Setting a real Flag is not a naming exercise. It is a subtraction exercise, and subtraction has a named loser in the room. Every item you decline to name is somebody’s budget, somebody’s headcount, somebody’s year. Adding a priority costs nothing at the moment of the meeting. Removing one costs a relationship. So lists grow — not because leaders lack discipline in the abstract, but because the discipline is priced in a currency the meeting is bad at spending.

That step is ours. No study cited here measured the social cost of subtraction.

The test

If the Flag is what broke on your team, you would predict something specific, and it is the opposite of what a communication problem predicts. Your team can name the priorities. Nothing has been declined on their basis.

So run two checks.

First, list your last five significant resource commitments. For each, ask whether it was settled by reference to the priorities or by who asked and how well they asked. Then ask what you turned down in the last two quarters, and why. If the answer to the second question is nothing, you do not have priorities. You have a list — and the honest version of that sentence is worth sitting with before you fix anything.

Second, and this is the harder one. Ask each member of your team to write down the three priorities separately, without conferring. Do not check whether the words match, because they usually will. Check whether each person would apply them the same way to the same pending decision that is currently on your desk. Agreement on wording is cheap. Agreement on what the wording rules out is the thing you actually need and almost certainly do not have.

Where this element sits

The Flag is not one of the four disciplines. It sits at the centre, and the four run off it: the Decision, the Rhythm, the Standard, the Learning. A team with no operative Flag cannot fail at the Decision in any interesting way, because there is no standard against which a decision was the wrong one. The Flag Model sets out all five.

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