The clarity gap.

Every year, tens of thousands of Romanian companies quietly close. The National Trade Register recorded 71,241 deregistrations in 2023 and more than 83,000 in 2024, a rise of about 16 percent in a single year.

Ask founders and analysts why, and the same reasons come back: too little capital, rules that change too often, a tax regime that is hard to plan around, and a shortage of skilled people. All of them are real, and we meet them in our own work every week.

They are also external explanations, and they share one convenient feature: none of them is the leadership team's fault. In our advisory work, and in the research behind this article, we kept seeing a different pattern. Companies with similar access to capital, under the same rules and in the same sectors, were moving in sharply different directions. The difference was rarely the strategy itself. It was whether anyone other than the founder actually understood it.

We call this the clarity gap: the distance between the strategy as it exists in the founder's head and the strategy as it is lived by the people who have to carry it out. Strategies rarely fail because they are wrong. Far more often, they fail because the people responsible for them do not understand them in the same way.

What we mean by clarity

Clarity is easy to agree with and hard to measure. To make it concrete, we divided it into four dimensions. Each one answers a question that every employee of a growing company eventually needs answered.

Strategic clarity is whether people know where the company is going and why that direction was chosen. Role clarity is whether each person knows what they own, where their authority ends and how their work connects to company goals. Priority clarity is whether people can decide what comes first without sending every trade-off to the top. Process clarity is whether the way work moves, and the way decisions are made, is understood and repeatable.

The four are not independent. In our data they moved closely together, which supports a simple idea: clarity is one organizational capability that shows up in four places. A company that is vague about its strategy is usually vague about roles as well, because roles are meant to follow from the strategy. Weakness in one dimension tends to spread to the others.

Finding 1

Clarity and growth move together, strongly

We surveyed 108 founders, owners and managers of Romanian SMEs with a 46-item questionnaire, then compared their clarity scores with how they rated their company's sustainable growth: the direction of revenue, the stability of the team, and the ability to grow without chaos.

The relationship was stronger than we expected. Together, the four dimensions accounted for roughly 90 percent of the differences in growth ratings across the sample. In practice, knowing how clear a Romanian SME is on the inside lets you predict, with surprising accuracy, how its leaders will describe its growth.

We want to be careful. This is a survey of how leaders see their own companies, taken at one point in time. Leaders who feel in control may rate both clarity and growth generously, and a correlation does not prove that one causes the other. Still, a relationship this strong, measured on a highly reliable scale, is hard to dismiss. At the very least, clarity is one of the most reliable signs of a company that is growing well. Our experience in the field suggests it is also one of the causes.

Finding 2

Strategy is the keystone, and the why is missing

When we looked at which dimension mattered most once the others were taken into account, strategic clarity came out on top. That fits a long line of management thinking. You cannot define roles well without knowing what the company is trying to achieve, set priorities without objectives to rank them against, or design a process without knowing what it should produce. Strategy comes first, and everything else inherits its quality.

The more useful insight sits one level down, in the individual questions. Leaders scored themselves reasonably well on announcing the direction, and noticeably worse on explaining it.

The distance between “leadership announces the direction” and “people understand why this direction was chosen” is the clarity gap in miniature. In many Romanian SMEs, employees know what the plan is, but not why. Without the why, they cannot adapt the plan sensibly when conditions change. Every unexpected situation becomes a question for the founder, and the founder becomes the bottleneck.

The same exhibit shows the weakest area in the entire survey: job descriptions. They are rarely updated, and they rarely match what people actually do. It is the most neglected part of clarity we measured, and also the cheapest to fix.

Finding 3

The valley between years two and five

The finding we consider most important for founders is about timing. You might expect clarity to improve steadily as a company matures. It does not.

Companies under two years old score reasonably well. Companies between two and five years old score lowest of all, lower even than start-ups. From year six, clarity recovers sharply and stays high. Age alone explained about a fifth of the differences in clarity across the sample.

The explanation is intuitive once you have lived it. In the first year or two, a company is small enough for clarity to happen naturally. The founder sits next to everyone, decisions are made together, and the strategy is visible in every conversation. Nothing is written down, and nothing needs to be.

Then the company grows. It adds people, clients, projects and locations, and work has to be coordinated between people who no longer share a room or a routine. The informal habits that worked with five people stop working with fifteen, but the formal systems that should replace them, such as documented roles, decision rights and a planning rhythm, have not been built yet. The old way is no longer enough, and the new way does not yet exist. That is the valley.

The management scholar Larry Greiner described this as a crisis of leadership more than fifty years ago. What our data adds is that in Romania the crisis can be measured as a clarity problem, and that it coincides with the period in which, according to the Trade Register figures, companies are most likely to close. The companies that reach year six and beyond are, overwhelmingly, the ones that found a way across.

Finding 4

The founder threshold

The usual advice for growing companies is to professionalize: bring in experienced managers and step back. Our data point to a more precise version of that advice.

Companies run by the founder alone scored well below the rest. But companies where the founder shared leadership with even a small management layer scored almost exactly the same as fully professionally managed ones. The difference between those two groups was statistically negligible.

The threshold that matters, in other words, is not founder versus professional manager. It is one person versus more than one. As soon as the strategy has to be explained to someone else who shares responsibility for it, it has to be made explicit, and making it explicit is what creates clarity for everyone else.

That is good news for founders. You do not have to hand over the company to fix the problem. You have to stop being the only place where the strategy lives.

Finding 5

Adopt a tool. Almost any tool.

The largest single difference in the study came from a simple question: does the company use any formal strategic management tool? That could be OKRs, a balanced scorecard, a written annual plan with quarterly reviews, or a structured organizational manual.

The average company using a formal strategy tool scored higher on clarity than more than 99 percent of companies using none.

The effect was so large that the choice of tool looked almost secondary. What matters is adopting one. A formal tool forces the leadership team to write down objectives, assign owners, set a rhythm of review and explain changes. In short, it takes the strategy out of the founder's head. Once it exists outside one person, it can be shared, questioned, improved and carried out by others.

We have tested this on ourselves. When we set up APO Impact's own foundations, we wrote an organizational manual defining departments, decision rights and a hiring plan before the first hire, together with a convention for how every engagement, contract and deliverable is created and stored. Neither document is glamorous. Both mean that new colleagues can understand how the firm works without asking the founder every question.

What leaders should do now

The research points to five practical moves. None needs a large budget. All of them need leadership attention.

1. 01

   Explain the why, not only the what

   Repeating the strategy more often is not the answer. Explaining its reasoning is. When the direction changes, say what changed in the market or the business, which alternatives you considered, and what it means for each team. People who understand the logic can apply it without you.

2. 02

   Write the role before you hire for it

   Job descriptions were the weakest point in the whole study. Define each role's outcomes, the limits of its authority and its link to company goals before recruiting, and review them at least once a year. Hiring into an undefined role builds confusion in from the first day.

3. 03

   Adopt one formal strategy tool this quarter

   Choose the simplest one your team will actually use: quarterly OKRs, a one-page annual plan with a monthly review, or a balanced scorecard. Do not wait until the company feels big enough to need it. By then you are already in the valley.

4. 04

   Share the leadership load before year two

   Bring at least one other person into real, shared responsibility for strategy and execution: a co-founder, an operations lead or a small leadership team. The point is not to step back. It is to get the strategy out of your head and into a form others can own.

5. 05

   Prepare for the valley while you are still on the hill

   If your company is between one and three years old, assume the valley is coming. The companies that cross it fastest start formalizing before complexity forces them to, not in the middle of a crisis.

A closing thought

It is tempting to treat clarity as a soft subject, to be dealt with once the hard problems of funding, sales and compliance are solved. Our evidence points the other way. In an environment as changeable as Romania's, where rules, costs and demand can all shift within a year, internal clarity is one of the few things a leadership team fully controls. It cushions the company against outside uncertainty, and no strategy can be carried out without it.

The companies that survive their early years are not always the ones with the best idea or the most capital. More often, they are the ones in which everyone understands the idea well enough to carry it forward.