WHAT IS STRATEGY?

A quotes-based summary of Good Strategy, Bad Strategy by Richard Rumelt

Prepared by Finn Schubert

A strategy is a way through a difficulty, an approach to overcoming an obstacle, a response to a challenge.

If the challenge is not defined, it is difficult or impossible to assess the quality of the strategy.

And if you cannot assess a strategy’s quality, you cannot reject a bad strategy or improve a good one.

The core of strategy work is always the same: discovering the critical factors in a situation and designing a way of coordinating and focusing actions to deal with those factors.

Simply being ambitious is not a strategy.

A long list of “things to do,” often mislabeled as “strategies” or “objectives,” is not a strategy.

Strategy is at least as much about what an organization does not do as it is about what it does.

BAD STRATEGY

BAD STRATEGY is not NO STRATEGY

BAD STRATEGY is not FAILED STRATEGY

BAD STRATEGY

  • "assumes that goals are all you need"
  • "puts forward strategic objectives that are incoherent and, sometimes, totally impracticable"

To detect a bad strategy, look for one or more of its four major hallmarks:

  1. Fluff.
  2. Failure to face the challenge.
  3. Mistaking goals for strategy.
  4. Bad strategic objectives.

GOOD STRATEGY

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.

A good strategy defines a critical challenge.

It builds a bridge between that challenge and action, between desire and immediate objectives that lie within grasp.

The kernel of a strategy contains three elements:

  1. A diagnosis that defines or explains the nature of the challenge
  2. A guiding policy for dealing with the challenge
  3. A set of coherent actions that are designed to carry out the guiding policy

A great deal of strategy work is trying to figure out what is going on.

A good guiding policy tackles the obstacles identified in the diagnosis by creating or drawing upon sources of advantage.

A guiding policy creates advantage by

  • anticipating the actions and reactions of others
  • reducing the complexity and ambiguity in the situation
  • leveraging concentration of effort on a pivotal aspect of the situation
  • creating coherent policies and actions

STRATEGIC LEVERAGE =

ANTICIPATION +

INSIGHT INTO WHAT IS PIVOTAL +

CONCENTRATED EFFORT

Fortunately, a leader does not need to get it totally right—the organization’s strategy merely has to be more right than those of its rivals.

KEY TAKEAWAY

Good strategy is

Diagnosis + Guiding Policy + Coherent Actions

A quotes-based summary of Good Strategy, Bad Strategy by Richard Rumelt

Prepared by Finn Schubert

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