Good Strategy Bad Strategy

Richard Rumelt’s Good Strategy Bad Strategy is a solid handbook for what separates strategy from goals, vision, etc. It’s a mix of practical advice and anecdotes from his time consulting and helps you understand not just what good strategic work looks like but also what bad examples of it involve.

Good strategy finds the critical issues and focuses on those. In retrospect it will often look simple (but it’s far from that).

We often mistake ambition for strategy, which is a mistake as there has to be more than just big-picture goals. There are 3 components to good strategy: a diagnosis, guidance, and action. Each of these requires deliberate thought.

  • A diagnosis helps you find relevant past solutions.
  • Guidance helps direct energy without dictating specific actions. It also helps to rule out irrelevant steps.
  • Actions are the best steps you can take, even if they’re painful.

Good strategy is also inherently competitive. It’s about bringing your strengths against an opponent’s weaknesses.

There are four things that indicate bad strategy:

  • Fluff, or inflated words and concepts that lack the required depth.
  • A failure or inability to define the challenge (which means you also are unable to define success).
  • Goals instead of strategy. It’s not just about the future direction; you have to identify the obstacles and how to overcome them.
  • Objectives that don’t address key issues or which are unrealistic.

A hallmark of true expertise and insight is making a complex subject understandable.1

When a leader characterizes the challenge as underperformance, it sets the stage for bad strategy. Underperformance is a result. The true challenges are the reasons for the underperformance.2

Good strategy is not:

  • Adopting all options, you have to make a choice.
  • A template, you have to find what’s worth pursuing and what’s realistic to accomplish.
  • Positive energy, you need more than just belief.

As a leader your job is to absorb ambiguity and pass on to your team simpler problems. You may not yet know the exact answer but you can at least guide the team to build from a answer.

When looking to other organizations for inspiration focus on how they were built, not what they preach once they’ve matured.

  1. pg. 40 []
  2. pg. 55 []