Abstract
What tradeoffs do startup founders face in deciding whether to communicate their strategy to employees? While prior research emphasizes the value of clarity and alignment for execution, we find that only about half of employees across 24 entrepreneurial firms can accurately describe their company’s strategy. We tested the effects of strategy communication through two field experiments and follow-up interviews with nearly 600 employees and executives in 24 growth-oriented ventures across 14 countries. Communicating firm strategy increased employees' idea differentiation from other companies. Yet many founders refrain from communicating strategy. Interviews reveal three underlying reasons: underestimating communication frictions, limited managerial attention, and a desire to preserve flexibility. These findings reveal how communication frictions might constrain strategy implementation and in turn shape strategic entrepreneurial choices.