Recent Developments: Our Take on Richard Rumelt’s “Good Strategy, Bad Strategy”

Sometimes we read books, articles or opinions that give us insight into the things we are doing right, the things we could be doing better and the ways we can expand our knowledge to develop better organizational strategies.

This summer, Richard Rumelt authored a book called “Good Strategy, Bad Strategy: The Difference and Why It Matters.” As you might expect the title alone caught our attention! Rumelt hit the mark on a couple common misconceptions of strategy, and we’d like to elaborate on those points with OnStrategy’s COO Erica Olsen’s perspective.

#1: There’s a growing tendency to equate fluff, buzzwords and financial goals as sufficient for “strategy” that needs to be debunked to really understand the power of a good strategy.

Olsen: There’s nothing fluffy about a good plan—a solid plan requires a good, hard look at your company, the way you do things and how successful you are at delivering to your customer/client/membership base. Only then can you get a clear, data-based understanding of your current strategic position. This can be effectively addressed by conducting a rigorous SWOT exercise, as this will help you diagnose your company just like a doctor might a patient. This is where the fluff will get flattened, and you can move forward to create a diagnosis that does more than explain the situation, but also defines the domain of action.

#2: Good strategies work by harnessing and applying power where it will have the greatest effect for facing big challenges. Most people think they might have a good strategy, but end up pursuing a “dog’s dinner” of conflicting policies and actions.

People do amazing things with common tools. It’s about knowing how to use what you have. Good leaders can take a strong, compelling vision and use it to engage people by creating a shared understanding of what is possible. Good strategy isn’t a magical stunt. It’s more about the 1-2-3s of connecting the dots in a 3-D landscape. The process is a multi-level thought exercise, yet Rumelt does not spend a lot of time on execution, which is where we have seen many strategies become stagnant. A good strategy that cannot be executed (i.e. not realistic, no accountability, not cascaded or aligned) is as bad as magical thinking.

Overall, this book is a good library addition for our fellow practitioners of strategy. It offers a picture of what good strategy looks like. In summary, remember no strategy is complete without the execution of coherent, coordinated actions to address your organization’s situation or challenges. Like guardrails on a highway, your plan offers a guiding approach. Happy strategizing on your organization’s journey!


Does your strategy look like a dream sequence or a dot-to-dot?



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