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Good Strategy Bad Strategy: The Difference and Why It Matters Hardcover – Deckle Edge, July 19, 2011
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Clears out the mumbo jumbo and muddled thinking underlying too many strategies and provides a clear way to create and implement a powerful action-oriented strategy for the real world
Developing and implementing a strategy is the central task of a leader, whether the CEO at a Fortune 100 company, an entrepreneur, a church pastor, the head of a school, or a government official. Richard Rumelt shows that there has been a growing and unfortunate tendency to equate Mom-and-apple-pie values, fluffy packages of buzzwords, motivational slogans, and financial goals with “strategy.” He debunks these elements of “bad strategy” and awakens an understanding of the power of a “good strategy.”
A good strategy is a specific and coherent response to—and approach for overcoming—the obstacles to progress. A good strategy works by harnessing and applying power where it will have the greatest effect in challenges as varied as putting a man on the moon, fighting a war, launching a new product, responding to changing market dynamics, starting a charter school, or setting up a government program. Rumelt’s
nine sources of power—ranging from using leverage to effectively focusing on growth—are eye-opening yet pragmatic tools that can be put to work on Monday morning.
Surprisingly, a good strategy is often unexpected because most organizations don’t have one. Instead, they have “visions,” mistake financial goals for strategy,
and pursue a “dog’s dinner” of conflicting policies and actions.
Rumelt argues that the heart of a good strategy is insight—into the true nature of the situation, into the hidden power in a situation, and into an appropriate response. He shows you how insight can be cultivated with a wide variety of tools for guiding your
Good Strategy/Bad Strategy uses fascinating examples from business, nonprofit, and military affairs to bring its original and pragmatic ideas to life. The detailed examples range from Apple to General Motors, from the two Iraq wars to Afghanistan, from a small local market to Wal-Mart, from Nvidia to Silicon Graphics, from the Getty Trust to the Los Angeles Unified School District, from Cisco Systems to Paccar, and from Global Crossing to the 2007–08 financial crisis.
Reflecting an astonishing grasp and integration of economics, finance, technology, history, and the brilliance and foibles of the human character, Good Strategy/Bad Strategy stems from Rumelt’s decades of digging beyond the superficial to address hard questions with honesty and integrity.
Amazon Exclusive: Walter Kiechel Reviews Good Strategy Bad Strategy
Walter Kiechel is the author of The Lords of Strategy. Until January 2003, Kiechel served as editorial director of HBP and senior vice president in charge of its publishing division, with responsibility for the Harvard Business Review; HBS Press, the company's book-publishing arm; the newsletter unit (which he helped start in 1996) as well as HBP’s video, reprints, and conference businesses
Considering the source, this is a shocking book. For over 40 years Richard Rumelt has made distinguished contributions to the field of strategy, in his theorizing, teaching, and consulting. Now comes the deponent to tell us that what purports to be strategy at most organizations, not just companies but not-for-profits and governments as well, hardly merits the name. Instead it represents what he calls "bad strategy"--a list of blue-sky goals, perhaps, or a fluff-and-buzzword infected "vision" everybody is supposed to share.
Refreshing stuff this, seeing the corporate emperor revealed not in his imagined suit of armor but rather in something resembling a diaphanous clown suit. Rumelt drives the point home with a simple explanation for why most organizations can't do "good strategy": the real McCoy requires making choices, feeding a few promising beasties while goring the oxen of others at the management table.
But the jeremiad, fun as it is--and it is fun, Rumelt has a good time punching holes in the afflatus of bad strategy--isn't my favorite part of the book. That would be the second section, with the slightly daunting title "Sources of Power." To be useful to a practitioner, a book on strategy needs not only a straightforward framework but also a certain craftiness, a set of ideas that prompt the reader to think "What a neat idea" or "How clever of them." Rumelt has the clear, elegant framework in what he calls the "kernel"--a diagnosis explaining the nature of the challenge, a guiding policy for dealing with it, coherent actions for carrying out the policy.
In "Sources of Power," though, he goes deeper than the merely crafty to identify potential levers of for strategic advantage--proximate objectives, design, and focus, among others--that transcend the purely economic. Repeatedly he demonstrates how to think down through the apparent challenge, with questions and then questions of those questions, to get at what can be the bedrock of a good strategy.
In a final section on thinking like a strategist, we get a sense of what a delight it must be to sit in Rumelt's classroom, or with him on a consulting assignment, as he leads us through the best kind of Socratic dialogue to appreciate the kinds of blinders or mass psychology that can pose the final barriers to our forging clear-eyed strategy.
If you want to make strategy, or be an informed part of the ever-evolving conversation around the subject, you will need to read this book. My bet is that you'll enjoy the experience. --Walter Kiechel
"The most interesting business book of 2011." --Financial Times
“So much that’s said and written about strategy is – from my point of view – complete junk, that I get excited when I hear someone focusing on strategy in a coherent and useful way...A very good book.” --Forbes
“The year’s best and most original addition to the strategy bookshelf." --Strategy+Business
"The whole middle section, about sources of power, is valuable—particularly the explication of the limitations and nuances of competitive advantage.” --Inc
"Clearly written, thoughtful...This book is painful therapy but a necessary read nonetheless." --Washington Times
"Represents the latest thinking in strategy and is peppered with many current real world examples. Good Strategy/Bad Strategy has much to offer and has every chance of becoming a business classic.” --Management Today
"Drawing on a wealth of examples, Rumelt identifies the critical features that distinguish powerful strategies from wimpy ones—and offers a cache of advice on how to build a strategy that is actually worthy of the name. If you're certain your company is already poised to out-perform its rivals and out-run the future, don't buy this book. If, on the other hand, you have a sliver of doubt, pick it up pronto!”
--Gary Hamel, co-author of Competing for the Future
“..Brilliant … a milestone in both the theory and practice of strategy. … Vivid examples from the contemporary business world and global history that clearly show how to recognize the good, reject the bad, and make good strategy a living force in your organization.” --John Stopford, Chairman TLP International, Professor Emeritus, London Business School
“… Penetrating insights provide new and powerful ways for leaders to tackle the obstacles they face. The concepts of "the kernel" and "the proximate objective" are blockbusters. This is the new must-have book for everyone who leads an organization in business, government, or in-between.”--Robert A. Eckert, chairman and CEO of Mattel
“…. Richly illustrated and persuasively argued … the playbook for anybody in a leadership position who must think and act strategically. “ --Michael Useem, Professor of Management at the Wharton School, University of Pennsylvania, and author of The Leadership Moment
“… Rumelt writes with great verve and pulls no punches as he pinpoints such strategy "sins" as fluff, blue sky objectives, and not facing the problem.”--James Roche, former Secretary of the Air Force and president of Electronic Sensors & Systems, Northrop Grumman.
“This is the first book on strategy I have read that I have found difficult to put down.--John Kay, London Business School
Top Customer Reviews
Good strategy almost always looks simple and obvious, and is built around one or two critical issues. Bad strategy tends to skip over problems. Strategy is about how an organization will move forward. The purpose of Rumelt's book is to clarify the differences between good and bad strategy, and help readers create good strategy. A good strategy is coherent; most organizations pursue multiple objectives that are unconnected with each other, or even conflict with each other. One way to begin is by identifying the leading competitor and asking how that company became that leader, then segueing into how one's own company could also become a leader. (My preference is more direct - ask significant/target customers for advice on how one could substantially increase business volume with them.)
Steve Jobs' turnaround of Apple in 1996 began by shrinking the firm to a scale and scope appropriate for the niche producer it was at the time (4% of the total market). Jobs got Microsoft to invest $150 million in Apple and develop new Microsoft Office software for Apple to deflect Gates' worries over antitrust prosecution.Read more ›
I thought the book then lost its way a little, with the middle of the book having some very long examples that often didnt explicity demonstrate the application of the new framework but instead showed that much of Michael Porters tools for analysing 'competitive advantage' still hold true which is good news!
The last couple of chapters on 'putting it together' and 'keeping your head' lacked a strond sense of summary to me and I didnt come away with a strong memory the framework, or any handy new 'tool kit' or set 'heurisitics' for making sure that I would be doing Good rather than Bad strategy. The framework was there, but it was up in the front chapters and it really only all came together for me when I compiled my main highlighted sections and margin notes into a 1-page summary (that I then write into the front cover page so I can refresh and review my work books quickly) . I reckon the book structure could have benefitted from the old 3 part framework of "tell 'em what your gonna tell 'em, tell 'em, tell 'em what ya told 'em" = Introduction, Main Body, Conclusion
worth a read for someone involved in business strategy simply to get all the anecdotes and experience that Richard has amassed but you might need to work a little harder than necessary to consolidate the 'take home messages from the book'
I was visiting my brother's house and started reading his copy of Good Strategy/Bad Strategy one evening. I stayed up until 3 a.m. to finish it. There is a wealth of practical wisdom here that is presented without jargon and with a nice garnish of wit.
At first I assumed the "bad strategy" concept would apply to big companies and that I could breeze through it. But, as I got ahold of the argument, I began to see bad strategy all around me. It's there in state government, in the school system, in town planning, at a park where I am a trustee, and, of course, in Washington D.C. This idea has been a real eye-opener to me and I hope that it reaches a wide audience. The benefit is not just to strategy experts, but to ordinary people who need a way of understanding what is right and wrong with the institutions around them.
Even more than the "bad strategy" idea, I found the author's approach invigorating and empowering. Dr. Rumelt doesn't tell you what to do to make a good strategy. Instead, he says that it is the product of insight. In addition, he tells us that a strategy can't be "proven" to be correct. It is simply a good guess ("hypothesis") about what will work. (I sort-of always knew this, but couldn't articulate it in the face of so much expert blather about the best way to plan.) But, he then explains ways of thinking that help generate insight.Read more ›
Most Recent Customer Reviews
Some good examples and case studies, but no techniques for applying this knowledge to your own situation.Published 18 days ago by CH Florida
Recommended read by our school superintendent. Gets you thinking through what strategies are and how to see through ones destine to fail or how to create ones that could bring... Read morePublished 24 days ago by Mrs. T
The book is perfect. It is easy to read and the author works you through the ideas around strangely seamlessly, and it is full of advice, suggestions and real life examples that... Read morePublished 25 days ago by Tijan Drammeh
A thoughtful, well written text on strategy that is, highly recommended.Published 1 month ago by Timothy D. Paul
Although Michael Porter is the more famous strategy expert in academia, I found Richard Rumelt's explanation less ivory tower, and therefore more applicable. Read morePublished 2 months ago by lindsay
Richard Rumelt has provided a clear and concise framework to think about Strategy. Many case studies, historical and modern, provide a systematic perspective of what are good and... Read morePublished 3 months ago by Heidi
The basic points about strategy within the book are straightforward - a good foundational management strategy book. The first few chapters are the most useful. Read morePublished 3 months ago by Terri K
A definitive and impactful approach, for those who have the courage to make choices. If you are tired of pouring money into old, consulting solutions that everyone else gets, it is... Read morePublished 4 months ago by Edward M. Holinski