Good Strategy / Bad Strategy
My key take-aways from Richard Rumelt’s book
Good Strategy/Bad Strategy was recommended to me by a friend and it’s the first strategy book I’ve come across that has been hard to put down. Rumelt successfully demystifies strategy by framing it simply as “problem solving”. What’s great is that this book is packed with case studies, many drawn from personal experiences of the author, that fully support his comprehensive and no-nonsense tool-kit on strategic thinking.
Rumelt outlines how to identify and develop a “good strategy” but also crucially how to recognize the tell-tale signs of a “bad strategy” and below are my key learnings and insights.
What is bad strategy?
Bad strategy uses empty slogans filled with trendy buzzwords to take the place of important insights. It dodges problems and mistakes vision, goals and leadership for strategy.
“Like the quarter back who’s only advice to his team mates is “Let’s Win”, bad strategy covers up it’s failure to guide by embracing a language of broad goals, ambition, vision and values.”
What is good strategy?
Good strategy is simple and straightforward. It involves “strength applied to the most promising opportunity.” It focuses on critical issues and decides how to address them. It requires research and analysis, hard choices, decisive planning, and action. Good strategies are made up of three parts:
- Diagnosis: identify and come to grips with the fundamental obstacles and problems.
- Guiding policy: an overarching method that will direct your teams’ actions and aide with day to day decision making.
- Coherent set of actions and resource commitments designed to carry out the guiding policy.
Why so much bad strategy?
- Failing to identify the pivotal factors of a challenge
- Mistaking vision, goals and leadership for strategy
- Leaders are unwilling or unable to make painful choices among competing values and parties
- Setting unrealistic goals
- Not identifying your competitive advantage
Thinking like a strategist
I really liked Rumelt’s idea to create a virtual board of experts that you can consult on strategic matters. This is not as crazy as you might think. It helps externalise your thoughts so you can challenge your strategic thinking and decision making from another point of view. Imagining what they would say can trigger new ideas and open new lines of thinking.
On Rumelt’s virtual board are people he knows and respects — college professors, industry leaders or people who are good at getting straight to the hear of an issue like Steve Jobs.
Prove Your Hypothesis
The proof of your strategy will be if it actually works. If and when you meet strategic success, you can draw from it to develop valuable proprietary information that will help you optimise and improve you strategy. If not you will need to identify and come to grips with the fundamental obstacles and problems that you face.
These notes are from Good Strategy/Bad Strategy by Richard Rumelt. You can find the official book website here.
