Good Strategy / Bad Strategy

The rare business book that’s refreshingly free of BS!

You may have been part of a “strategy” meeting that worked out some more or less generic or obvious mission, vision, and values, involved some amount of discussions about how to delineate each of those from the other, and then came up with a list of goals boiling down to things like “we will grow our business” or “we will get better at doing what we do” (insert some made up numbers that sound good).

To which Rumelt would find a creative (and snarky) way of saying: “NO!! BAD!!”

“Good Strategy”, as he sees it, has to involve a “kernel” of at least three things instead:

1. A diagnosis of your current situation — what’s the problem you’re trying to solve and the reality you find yourself in?
2. A guiding policy for dealing with the situation — what’s the general approach you want to take?
3. A set of coherent actions you’re planning to take to implement that policy — who’s going to do what?

The goal is to make sure you are actually clear about what’s going on, pick a direction, and then coordinate all your actions so they focus you on achieving a desired outcome and add up instead of detracting from each other by doing ten things for ten people at the same time.

The failure modes of “Bad Strategy” follow straightforwardly: People love to skip actually facing reality (“bring me solutions, not problems”, “we need to think positively”, etc.). Instead of picking a general approach, they try to do a little bit of everything for everyone at once, avoiding tradeoffs and hard decisions. And instead of picking coherent actions, they set arbitrary goals without considering the “how” and/or march in ten conflicting directions at the same time.

This is the core of “Good Strategy/Bad Strategy” — the rest of the book goes into more detail about various approaches you can take to implement this approach, why people often get lost when trying to be strategic. There’s also ample references to real-world case studies (though they mostly stay at the surface).

You can sort of tell the author has an engineering background, as the entire framework takes a view that’s more concerned with problem solving under scarcity and competition rather than “inspiring people” or similar. I happen to think that’s a very productive frame to adopt. Rumelt comes off a bit arrogant at times, and the back ~1/3 of the book are somewhat long-winded and could be skimmed, but this was a great read I’d recommend!