Richard Rumelt: Good Strategy Bad Strategy
Richard Rumelt is Professor of Business & Society at UCLA.
In 2011 his book Good Strategy Bad Strategy brought clarity to the theory of strategy and illustrated it with practical examples.
I’ll summarise its central themes for those who haven’t read it.
Good strategy
A good strategy has a logical structure called the kernel. The kernel contains three essential elements: a diagnosis, a guiding policy, and a set of coherent actions.
Diagnosis: A great deal of strategy work is trying to figure out what is going on. Not just deciding what to do, but the more fundamental task of comprehending the situation and identifying the biggest barriers to forward progress.
Guiding policy: The guiding policy outlines an overall approach to overcoming the obstacles highlighted in the diagnosis. Like the guardrails on a highway, the guiding policy directs and constrains action without fully defining it.
Coherent action: The guiding policy must be translated into a a set of coordinated and coherent actions. A strategy that fails to define a variety of plausible and feasible actions is missing a critical component.
Bad strategy
To detect a bad strategy, look for one or more of its four major hallmarks: fluff, failure to face the challenge, mistaking goals for strategy and bad strategic objectives.
Fluff: Good strategy makes a complex subject understandable. Bad strategy, on the other hand, hides behind it. It uses a flurry of fluff, jargon and buzzwords in an attempt to mask an absence of substance.
Failure to face the challenge: A strategy is a way through a difficulty, an approach to overcoming an obstacle, a response to a challenge. If the challenge is not dealt with head on, it is difficult or impossible to assess the quality of the strategy.
Mistaking goals for strategy: Simply being ambitious is not a strategy. A good strategy does more than urge us forward toward a goal or vision. A good strategy honestly acknowledges the challenges being faced and provides an approach to overcoming them.
Bad strategic objectives: If the strategic objectives are just as difficult to accomplish as the original challenge, there has been little value being added. A proximate objective names a target that can reasonably be expected to hit, even overwhelm.
Good Strategy Bad Strategy covers all of these points in much greater detail. But it covers many other topics, including chain-linked logic and strategic pivot points.
Rumelt simultaneously simplifies the field of strategy and dramatises it with his illustrative examples.
Highly recommended. Pick up your copy here.