In the boardroom it sounds crisp.
"We are pivoting to enterprise to improve unit economics and strategic positioning."
Slides nod along. Heads nod along. You move to the next agenda item. In that moment the decision feels clean and binary. From now on, we are an enterprise-first company.
Walk a few floors down and something has already changed. The VP of Sales heard "enterprise" and started thinking about deal sizes north of six figures. The VP of Product heard "enterprise" and started thinking about compliance features and SOC 2. The VP of Marketing heard "enterprise" and started wondering whether to kill the self-serve funnel or just deprioritise it. None of them are wrong, exactly. But none of them are hearing the same thing.
By the time that single sentence reaches a frontline team three weeks later, it has been translated at least four times. Each translation is reasonable in isolation. Together, they produce a version of the strategy that the CEO would barely recognise.
This is the corporate telephone game.
The 40% tax
Research from the strategy execution literature suggests that between 40% and 60% of strategic value is lost during execution. Not because the strategy was bad. Not because people are lazy. Because the signal degrades every time it passes through a human layer.
Think about what happens in a typical cascade. The CEO tells the executive team. The executives tell their VPs. The VPs tell their directors. The directors tell their managers. The managers tell their teams. That is five translations of the same idea. At each level, the translator has their own context, their own priorities, their own interpretation of what matters most.
At level one, the CEO says "pivot to enterprise." At level two, the CRO says "we need bigger deals." At level three, the Sales Director says "stop spending time on SMB." At level four, the regional manager says "only pursue accounts with more than 500 employees." At level five, the SDR starts ignoring a $400K opportunity because it came from a 200-person company.
Nobody in this chain made an obviously stupid decision. Each person took the message they received and made it more concrete for their world. But the cumulative effect is a version of reality that has drifted far from the original intent. The CEO wanted to shift the centre of gravity. The SDR thinks they have been told to abandon an entire market segment.
Why traditional cascades fail
The traditional cascade assumes that each level of management is a faithful translator. It imagines a neat process where strategic intent flows downward through the hierarchy, gaining specificity at each step while retaining its original meaning.
This assumption is wrong for at least three reasons.
First, translation is lossy by nature. Every time you convert an abstract idea into a more specific one, you make choices about what to include and what to leave out. A one-sentence strategy becomes a paragraph. The paragraph becomes a set of priorities. The priorities become tasks. At each step, context is stripped away. By the time you reach the frontline, the "why" has often vanished entirely. People know what to do. They do not know why they are doing it or what trade-offs they should make when reality does not match the plan.
Second, each translator has their own incentives. A VP under pressure to hit a quarterly target will naturally emphasise the parts of the strategy that help their number. A director managing a difficult team will soften the parts that require uncomfortable changes. A manager who does not fully understand the strategy will skip the parts they cannot explain. These are not failures of character. They are predictable consequences of asking humans to faithfully transmit messages through multiple layers of competing priorities.
Third, the speed of cascade is painfully slow. In a typical large organisation, a strategic decision made in January may not reach frontline teams until March or April. By that time, market conditions have shifted, early movers have already acted, and the strategy itself may need updating. The cascade has not even finished delivering version one before version two is needed.
The compounding problem
The telephone game does not just degrade the message. It creates compounding misalignment.
Imagine two teams that both receive the "pivot to enterprise" message, but interpret it differently. Team A focuses on building enterprise features. Team B focuses on enterprise sales processes. Neither team coordinates with the other because each believes they already understand the strategy. Six months later, you have a product with enterprise features that do not match the sales process, and a sales process that promises capabilities the product does not have.
This is not a hypothetical. It happens in almost every organisation that relies on hierarchical cascade to distribute strategy. The bigger the company, the more translation layers, and the more compounding misalignment.
McKinsey found that only 23% of employees can correctly identify their company's top three priorities. Not because they were not told. Because they were told through a game of telephone that stripped the message of its coherence.
What actually works
The solution is not better slides or more town halls. It is structural.
Make the strategy visible, not just communicated. When every person can see the original strategic intent and trace how their work connects to it, the telephone game collapses. You do not need four layers of human translators when the original message is always accessible.
Create explicit connections, not implicit ones. Instead of relying on managers to interpret and translate, build a structure where each team's priorities explicitly link to the level above. The connection is not a story someone tells in a meeting. It is a data relationship that anyone can inspect.
Enable context to travel with the message. When a frontline team can see not just their task but the strategic reasoning behind it, they can make better trade-off decisions. The SDR in our earlier example would not ignore the 200-person company if they could see that the CEO's intent was to shift the centre of gravity, not to abandon SMB entirely.
Shorten the feedback loop. The slower the cascade, the more time the message has to degrade. If a strategic change can propagate through the organisation in days rather than months, there is less opportunity for drift and more opportunity for course correction.
The structural fix
The corporate telephone game is not a people problem. It is an architecture problem. You are asking a hierarchical communication system to faithfully transmit complex, nuanced ideas through multiple layers of translation. That system was never designed for fidelity. It was designed for control.
What you need is a system designed for alignment. One where the strategy is always visible, connections are always explicit, context always travels with the message, and changes propagate in days, not months.
This is not about more communication. It is about better infrastructure. The telephone game ends when you stop relying on whispers and start building wires.
