Good Strategy, Bad Strategy by Richard Rumelt

Key Takeaways :


  1. 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. A leader’s most important responsibility is identifying the biggest challenges to forward progress and devising a coherent approach to overcoming them.

  2. Good strategy requires leaders who are willing and able to say no to a wide variety of actions and interests. Strategy is at least as much about what an organization does not do as it is about what it does.

  3. Good strategy is not just “what” you are trying to do. It is also “why” and “how” you are doing it. A good guiding policy tackles the obstacles identified in the diagnosis by creating or drawing upon sources of advantage. Indeed, the heart of the matter in strategy is usually advantage. Just as a lever uses mechanical advantage to multiply force, strategic advantage multiplies the effectiveness of resources and/or actions. The coordination of action provides the most basic source of leverage or advantage available in strategy. A strategy coordinates action to address a specific challenge.

  4. At the core, strategy is about focus, and most complex organizations don’t focus their resources. Instead, they pursue multiple goals at once, not concentrating enough resources to achieve a breakthrough in any of them.

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

  6. Fluff.

  7. Failure to face the challenge.

  8. Mistaking goals for strategy.


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