Review – Good Strategy/Bad Strategy

Good Strategy/Bad Strategy: The Difference and Why It Matters

by Richard Rumelt, published 2011, 2013

I recently came across GS/BS on an old blog I have been subscribed to for years. Being in the middle of some strategic planning within our own business, the find seemed timely so I moved the title to the top of my list and set aside The Russian Revolution: A People’s Tragedy for completion at a later date. I am glad I did, although having now concluded the read I find I have a conflicted view of the book.

One reason I find myself interested in this book is it is in fact, interesting. I find myself thinking a lot, and thinking differently, about various strategic topics covered in the book as well as my own related challenges, which suggests the book has given me a valuable new framework. On the other hand, I thought the author did not define his terms in such a way that leaves me feeling confident he has created a solution to the problems he has identified with most approaches to strategy– it’s almost like he came up with an even sexier sounding way to think about strategy problems without addressing the concrete limitations of the approaches he has critiqued.

In my review rubric, a 5/5 is a “classic” book that not only can be read again and again, but should and likely will be, each reading offering new insights or appreciation of the human condition examined within. A 4/5, on the other hand, is not a “near classic” but rather just a “very good book” that is worthy of recommendation to others. A 3/5 is a book with some value, but is otherwise unremarkable. And we won’t waste or time rehashing the miserable 2/5 and 1/5 ratings. I am puzzled because I think I am going to end up re-reading this book, and most likely in a very short period of time after I’ve tried to digest and apply some of what I think I’ve just learned to my own strategic activities. That suggests it is a potential 5/5. But I don’t feel like I will enjoy this book more with each re-reading, especially because some of the case studies contained within will have grown very stale (many I have encountered in other reading materials and few of those had any new insights to glean this time around). And because of my concerns with the definitions and overall structure of the book, I am not even sure it is a 4/5. I went back and forth with a friend in a private message system about whether I thought he should read it or not, finally settling on “yes”, and I have recommended it to others since then. It’s definitely not a 3/5.

Since my mind is not made up about what this book is saying, I don’t have a concise review of its major ideas to offer at the moment. I might reflect and write another post if and when I do, likely after the suggested re-reading. For now, I am just going to collect all the passages I highlighted and see if anything obvious bubbles up into my consciousness as a result:

• Strategy is about “discovering the critical factors in a situation and designing a way of coordinating and focusing actions to deal with those factors.”
• A strategy that fails to define a variety of plausible and feasible immediate actions is missing a critical component.
• Doing strategy is figuring out how to advance the organization’s interests.
• The kernel of a strategy contains three elements: a diagnosis, a guiding policy and coherent action.
• The most basic idea of strategy is the application of strength to weakness.
• A hallmark of true expertise and insight is making a complex subject understandable.
• If you fail to identify and analyze the obstacles, you don’t have a strategy.
• A strategy is like a lever that magnifies force.
• Strategic objectives should address a specific process or accomplishment.
• Business competition is not just a battle of strength and wills; it is also a competition over insights and competencies.
• To obtain higher performance, leaders must identify the critical obstacles to forward progress and then develop a coherent approach to overcoming them.
• The need for true strategy work is episodic, not necessarily annual.
• A good strategy defines a critical challenge.
• Strategies focus resources, energy and attention on some objectives rather than others.
• All analysis starts with the consideration of what may happen, including unwelcome events. I would not care to fly in an airplane designed by people who focused only on an image of a flying airplane and never considered modes of failure.
• A great deal of strategy work is trying to figure out what is going on.
• Slowing growth is a problem for Wall Street but is a natural stage in the development of any noncancerous entity.
• A diagnosis is generally denoted by metaphor, analogy or reference to a diagnosis or framework that has already been accepted.
• A guiding policy creates advantage by anticipating the actions and reactions of others, by reducing the complexity and ambiguity in the situation, by exploiting the leverage inherent in concentrating effort on a pivotal or decisive aspect of the situation, and by creating policies and actions that are coherent, each building on the other rather than cancelling one another out.
• The coordination of action provides the most basic source of leverage or advantage available in strategy.
• Anticipation simply means considering the habits, preferences, and policies of others as well as various inertias and constraints on change.
• A master strategist is a designer.
• The truth is that many companies, especially large complex companies, don’t really have strategies. At the core, strategy is about focus, and most complex organizations don’t focus their resources. Instead, they pursue multiple goals at once, not concentrating enough resources to produce a breakthrough in any one of them.
• A competitive advantage is interesting when one has insights into ways to increase its value.
• The first step in breaking organizational culture inertia is simplification.
• To change the group’s norms, the alpha member must be replaced by someone who expresses different norms and values.
• Planning and planting a garden is always more interesting and stimulating than weeding it, but without constant weeding and maintenance the pattern that defines a garden — the imposition of a special order on nature — fades away and disappears.
• In a changing world, a good strategy must have an entrepreneurial component. That is, it must embody some ideas or insights into new combinations of resources for dealing with new risks and opportunities.
• Making a list is a basic tool for overcoming our own cognitive limitations. The list itself counters forgetfulness. The act of making a list forces us to reflect on the relative urgency and importance of issues. And making a list of “things to do now” rather than “things to worry about” forces us to resolve concerns into actions.
• When we do come up with an idea, we tend to spend most of our energy justifying it rather than questioning it.
• A new alternative should flow from a reconsideration of the facts of the situation, and it should also address the weaknesses of any already developed alternatives. The creation of new, higher-quality alternatives requires that one try hard to “destroy” any existing alternatives, exposing their fault lines and internal contradictions.