January 26, 2012 Vol. 5, Issue 1
So you say you have a strategy. Richard Rumelt asks if it’s any good.
The success of organizations like Starbucks, Apple, and IKEA, military operations like Desert Storm, and missions like the first Surveyor moon landing are all rooted in a good strategy. In Good Strategy, Bad Strategy: The Difference and Why It Matters, Richard Rumelt, professor of Business & Society at the University of California Los Angeles Anderson School of Management, takes a closer look at the importance of not just having a strategy, but having a good one.
In the nearly 300-page read, it is clear that formulating a good strategy is not accomplished easily. Most people get stuck simply defining the word. It is often confused with things like vision, goals, and ambition, says Rumelt, a former systems engineer at the Jet Propulsion Laboratory. Strategy – good or bad – is none of these. “The core of strategy 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,” writes Rumelt.
Rumelt observes that the key to a good strategy comes in the form of what he terms a “kernel,” which has three elements:
- Diagnosis – A definition of the problem or challenge to be met. Answers the question What is going on here?
- Guiding Policy – A direction forward. Not the defining details of the trip, but the signposts.
- Coherent Action – Feasible coordinated policies, resource commitments, and actions designed to carry out the guiding policy.
Bad strategy is lacking in one or all of these areas. According to Rumelt, “Bad strategy is long on goals and short on policy or action. It assumes that goals are all you need,” he writes. “Bad strategy generates a feeling of dull annoyance when you have to listen to it or read it.”
Good strategy is hard work, requiring more than a ‘can-do’ spirit and winning optimism. This means moving past fluffy language, buzz words, endless laundry lists of suggestions, and resisting the siren song of “blue-sky” thinking. Moreover, when developing a strategy, the strategist must have the expertise to ask the right questions of others and themselves, which Rumelt calls “thinking about your own thinking.” Ultimately, he argues, a good strategy is about identifying and acknowledging the barriers and opportunities ahead, and devising a coherent plan of action to navigate them.
