The Root of Strategy
In the mid-1850s, as America’s railroads were transforming commerce and society, Scottish engineer Daniel McCallum faced an increasingly timeless challenge: how could he coordinate thousands of employees spread across hundreds of miles of track, managing complex operations in real-time? Part of his solution was the first recorded organizational chart, according to a great article by leading expert on trust Rachel Botsman, published this past weekend in the Financial Times Magazine.
McCallum worked with engineer and draughtsman George Henshaw to craft this organic, root-based structure, placing the President and Board at the bottom of their organization, with authority flowing upward and outward through branches extending to frontline workers, similar to how servant leadership flips the pyramid on its head to reinforce the leader’s role in supporting and sustaining the trust of their team members.
Botsman’s final line in the article particularly resonated with me:
“I’ve learnt a powerful lesson: to innovate and think differently, start with the roots.”
This maps onto what I’ve observed working with strategy executives and CEOs across industries. While we often speak of the criticality of strategy cascading down through an organization, strategy leadership actually begins at the root, with the CEO.
Like a root system that anchors and nourishes a tree, the CEO fundamentally owns strategy. When CEOs embrace this role effectively, they provide the essential nutrients — strategic clarity, coherent choices, a shared understanding of the bar for strategy — that allow strategic activity and initiative-taking to flourish throughout the organization. The criticality of this is why I have found it important to understand and in various ways articulate and amplify the CEO’s fundamental beliefs about and approaches to debating and deciding strategy in any strategy review I run, regardless of whether it is top-down, bottom-up, or a mix of the two.
For strategy executives, understanding this fundamental reality is essential. Their role complements but cannot fully replace the CEO’s position as the root of strategy. In our 2022 research I led into the role of the strategy executive, we identified the criticality of CEO-backed mandates to strategy function success. Our data shows well-defined CEO mandates for strategy executives are exceedingly rare, but those that have them consistently outperform, which is why it is central to any counsel I provide strategy executives.
McCallum’s 19th-century innovation reminds us that organizational structure isn’t merely about reporting relationships. It’s about the flow of language, direction, and support, all of which are essential to a high-performing strategy system. In today’s complex and uncertain environment, we would do well to remember both this organic understanding of how strategy cultures live and grow from strong roots, and the value of a servant leadership orientation to strategy.
Rachel Botsman’s “Roots of Trust” installation will be at the London Design Biennale at Somerset House, June 5–29. Check out her work on her website.
