Good Strategy Bad Strategy by Richard Rumelt

by Paul Simister on July 30, 2011

Good Strategy Bad Strategy: The Difference And Why It Matters by Richard Rumelt is a thought-provoking book which challenges many of the practices that are passed off as strategy today.

Good Strategy Bad Strategy by Richard Rumelt Good Strategy Bad Strategy book cover

Strategy Sounds Important – It Must Be Good

I have a pet hate.

If you want to make something sound important, then you call it a strategy, even if it has little in common with real strategy. A change programme doesn’t sound nearly as important as a strategic change programme, an acquisition doesn’t sound as good as a strategic acquisition…

And Richard Rumelt agrees with me.

Or perhaps, given his excellent reputation as a strategic thinker (there it is again), I should say that I agree with him.

Good Strategy Is Not Wish Driven Strategy

Richard Rumelt is particularly against wish driven strategies – “our strategy is to grow by 20% per year because we want to grow by 20%.”

Since I moved by focus more from working with corporates to entrepreneurs I’ve softened my stance somewhat. The entrepreneur or owner manager is the long term driving force in a business and his or her passions are often the driving force of a fast growing small business. This is very different to the corporate world where a senior manager isn’t expected to stay in the one position for too long before moving up or out.

The Kernel Of A Good Strategy

According to Richard Rumelt, the kernel of good strategy has three elements:

  • A diagnosis of the issues and problems facing the business
    .
  • A guiding policy to overcome the obstacles
    .
  • Coherent action

It’s a simple, powerful idea because bad strategy is too often a general guiding policy, but unlike step 2, it has been picked at random because it sounds good or trendy rather than needed to address the big issues the business faces.

Similarly this strategy kernel emphasises that action plans are an inherent part of good strategy and not something to be added in later (perhaps). It sounds obvious when you read it here or in the Good Strategy Bad Strategy book but you still hear vague ideas like “our strategy is to expand overseas” or “our strategy is to build an online business”.

My Thoughts On Good Strategy Bad Strategy by Richard Rumelt

Good Strategy Bad Strategy is an interesting read for anyone familiar with strategic planning but it focuses on strategic thinking in general terms rather than specific. It’s not a book for someone who is new to strategy and wants to know how to put together a strategic plan. It assumes a lot of knowledge.

There are plenty of stories from history, from space exploration, from military history and from business although there’s more emphasis on new technology than I would have liked personally. I’m a late adapter and some of the stories passed over my head.

I also thought that the book started really strongly with its emphasis on the difference between good and bad strategy but the value I got from the book tailed off as I read more but the writing style kept me reading through to the end.

Who Should Read Good Strategy Bad Strategy?

I don’t recommend Good Strategy Bad Strategy to small business owners because they are unlikely to have the existing knowledge of the popular strategy concepts but it is an important read for strategy consultants and academics together with CEOs and strategic managers in bigger businesses.

The comparison between good strategy and bad strategy is a wake-up call to businesses to get serious about strategic thinking. The kernel provides a very useful, very short checklist which you can use to audit your own strategic planning.

Buying Your Copy Of Good Strategy Bad Strategy

You can get a copy of Good Strategy Bad Strategy at Amazon.com or Amazon.co.uk – affiliate links

Paul Simister is the business strategy coach who helps business owners to differentiate their businesses and develop winning strategies. Get your free copy of the ebook The Six Steps Profit Formula.

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{ 3 comments }

Ian Brodie October 9, 2011 at 1:17 am

Hi Paul – I was going to recommend this book to you, I’m currently a couple of chapters in – but it looks like you’ve already read it.

As an ex strategy consultant, Rumelt’s gripes about “paint by the numbers” strategies rang a bell. I witnessed lots of corporate “awaydays” that led to well meaning visions – but nothing that would help the company succeed or compete better.

Ian

Paul Simister October 9, 2011 at 4:51 am

Thanks for the comment Ian.

Good Strategy Bad Strategy is certainly an interesting book which challenges many views and practices on strategy.

I share your concerns on strategy awaydays

Paul Simister October 10, 2011 at 3:37 pm

Good Strategy/Bad Strategy: The Difference and Why it Matters has been chosen as one of six finalists for the Financial Times & Goldman Sachs Business Book of the Year award for 2011.

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