Summary

<aside> 💡 This document is a collection of key insights from the book "Good Strategy Bad Strategy" by Richard Rumelt.

• Good Strategy:
  • It is simple and obvious and doesn't require complex tools or matrices to explain.
  • It identifies one or two critical issues in a situation and focuses resources on them.
  • It acknowledges the challenges being faced and provides an approach to overcoming them.
  • It includes a set of coherent actions. They are not just "implementation" details but the punch in the strategy.
  • It has a kernel that contains three elements: a diagnosis, a guiding policy, and coherent action.
• Bad Strategy:
  • It tends to skip over pesky details such as problems.
  • It covers up its failure to guide by embracing the language of broad goals, ambition, vision, and values.
  • It assumes that goals are all you need.
  • It uses high-sounding words and phrases to hide these failings.
• Four hallmarks of bad strategy:
  • Fluff: It uses inflated and unnecessarily abstruse words and phrases to create the illusion of high-level thinking.
  • Failure to face the challenge: It fails to recognize or define the challenge.
  • Mistaking goals for strategy: Many bad strategies are just statements of desire rather than plans for overcoming obstacles.
  • Bad strategic objectives: They are set by a leader as a means to an end. They are “bad” when they fail to address critical issues or when they are impracticable.
• The power of perspective shift:
  • Looking at things from a different or fresh perspective can reveal new realms of advantage and opportunity as well as weakness.
  • An insightful reframing of a competitive situation can create whole new patterns of advantage and weakness. </aside>

Notes

INTRODUCTION OVERWHELMING OBSTACLES (Location 144)

Good strategy almost always looks this simple and obvious and does not take a thick deck of PowerPoint slides to explain. It does not pop out of some “strategic management” tool, matrix, chart, triangle, or fill-in-the-blanks scheme. Instead, a talented leader identifies the one or two critical issues in the situation—the pivot points that can multiply the effectiveness of effort—and then focuses and concentrates action and resources on them. (Location 156)

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. (Location 160)

A leader’s most important responsibility is identifying the biggest challenges to forward progress and devising a coherent approach to overcoming them. (Location 162)

A good strategy recognizes the nature of the challenge and offers a way of surmounting it. Simply being ambitious is not a strategy. (Location 177)

A good strategy does more than urge us forward toward a goal or vision. A good strategy honestly acknowledges the challenges being faced and provides an approach to overcoming them. And the greater the challenge, the more a good strategy focuses and coordinates efforts to achieve a powerful competitive punch or problem-solving effect. (Location 198)

Bad strategy tends to skip over pesky details such as problems. It ignores the power of choice and focus, trying instead to accommodate a multitude of conflicting demands and interests. Like a quarterback whose only advice to teammates is “Let’s win,” bad strategy covers up its failure to guide by embracing the language of broad goals, ambition, vision, and values. (Location 202)

Ambition is drive and zeal to excel. Determination is commitment and grit. Innovation is the discovery and engineering of new ways to do things. Inspirational leadership motivates people to sacrifice for their own and the common good.1 And strategy, responsive to innovation and ambition, selects the path, identifying how, why, and where leadership and determination are to be applied. (Location 217)