Richard Rumelt “Good Strategy, Bad Strategy”

Some books come into your life at just the right time. I first noticed Richard Rumelt’s Good Strategy, Bad Strategy a few years ago and bought it immediately. I didn’t get around to reading it right away, but once I started, it suddenly became very popular among my colleagues, which gave me the chance to discuss various points with them.

A year passed, my thoughts settled, and I realized that the book was so good that it deserved a more thoughtful re-read. So that’s what I did this time.

So what is this book about, and why did I read it twice in roughly a year and a half?

Strangely enough, it’s about strategies. The word “strategy” has been on everyone’s lips lately. It’s discussed on TV, and every self-respecting company and government has its own development strategy. “Strategic thinking” has become an essential skill for any leader. The problem is that with the growing popularity of the term, the concept of strategy itself has become diluted. Nowadays, many people, behind the appealing label of “strategy,” present nothing more than lofty slogans, fancy but empty words, or at best, short-term goals. But none of this is real strategy.

Richard Rumelt’s book aims to show what a “bad strategy” is (meaning something that is not actually a strategy, or only represents a small part of one) and what a “good strategy” looks like (how it’s built, with successful examples).

In short, a good strategy always answers the questions “what?”, “why?”, and “how?”. That is, what problem or opportunity exists, and what do you want to achieve? Why are you going to do it? And how are you going to do it? Of course, I’m simplifying here, but these are the questions you should always ask when thinking about strategy.

According to the author, bad strategies often have one or more of the following traits: “fluff” (empty talk), a lack of understanding of the problem, confusing strategy with goals (just stating what you want), and so on.

Things like missions and the desire to be the best in your industry are not strategies.

In the first chapters of the book, the author analyzes the traits of bad strategies and explains what should be in a good one. Then he dives into the details of how to create a truly effective and solid strategy.

The book also contains many examples of both bad and good strategies, from world history as well as from Richard Rumelt’s personal experience.

You probably won’t learn how to create great strategies just by reading this book. But what you will definitely be able to do is recognize bad ones. The book helps to structure your approach and quickly dismiss the meaningless fluff that’s often presented as strategy. And once you understand what’s bad, you can focus on the truly important aspects. You may not be perfect at it at first, but at least you won’t waste time on clearly doomed or pointless tasks.

I highly recommend this book as a must-read for all managers.

My rating: 4.5/5

Richard Rumelt “Good Strategy, Bad Strategy: The Difference and Why It Matters”

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Selected quotes:

If you fail to identify and analyze the obstacles, you don’t have a strategy. Instead, you have either a stretch goal, a budget, or a list of things you wish would happen.

Good strategy works by focusing energy and resources on one, or a very few, pivotal objectives whose accomplishment will lead to a cascade of favorable outcomes. One form of bad strategic objectives occurs when there is a scrambled mess of things to accomplish—a “dog’s dinner” of strategic objectives.

A long list of “things to do,” often mislabeled as “strategies” or “objectives,” is not a strategy. It is just a list of things to do. Such lists usually grow out of planning meetings in which a wide variety of stakeholders make suggestions as to things they would like to see done. Rather than focus on a few important items, the group sweeps the whole day’s collection into the “strategic plan.” Then, in recognition that it is a dog’s dinner, the label “long-term” is added so that none of them need be done today.

The purpose of good strategy is to offer a potentially achievable way of surmounting a key challenge. If the leader’s strategic objectives are just as difficult to accomplish as the original challenge, there has been little value added by the strategy.

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. Unless leadership offers a theory of why things haven’t worked in the past, or why the challenge is difficult, it is hard to generate good strategy.

By the early 2000s, the juxtaposition of vision-led leadership and strategy work had produced a template-style system of “strategic planning.” (Google “vision mission strategy” to find thousands of examples of this template for sale and in use.)

Good strategy is not just “what” you are trying to do. It is also “why” and “how” you are doing it.