You’re probably familiar with bad strategy. It’s full of fluff, lofty visions and desirable outcomes, with no clue on how to achieve these things. In Good Strategy, Bad Strategy: The Difference and Why It Matters, Richard Rumelt explains how good strategy is different.

As usual, the key takeaways are below, and you can find the full summary by clicking the link above.

KEY TAKEAWAYS

• The word “strategy” has been so misused that many people don’t even know what it means.
• Bad strategy fails to face up to the challenge and avoids making hard choices. Bad strategy also fails to bridge the implementation gap — people often confuse strategy with goal-setting and vision.
• The ‘kernel’ of a good strategy has 3 components:
  • Diagnosis. Since a strategy must confront the challenge, the first step is figuring out what the challenge even is.
  • Guiding policy. This is the overall approach to deal with the diagnosed problem.
  • Coherent actions. The kernel doesn’t have to contain every action step, but it has to contain some action to help bridge the implementation gap and those actions should be coordinated to work together.
• Strategy is ultimately about harnessing power and applying it. Sources of power include:
  • Advantages. No one has an advantage at everything, as advantage is rooted in asymmetries.
  • Understanding systems. One reason why strategy is hard is because the connections between actions and results are not always clear.
• Things to watch out for:
  • Attempts to engineer growth. Growth is the outcome of good strategy, not an end to be pursued in itself.
  • Inertia. As organisations grow bigger and more complex, they tend to become resistant to change.
  • Entropy. Over time, organisations naturally become less organised and focused unless they are properly managed.
• Think like a strategist:
  • Strategy is hard and requires analysing unstructured information.
  • New strategies are like hypotheses — success is never guaranteed, but you can test and learn from them.
  • Be aware of your own cognitive limits and biases. The kernel can help with this as it forces you to think carefully about strategy.

You can find the full detailed summary on the website. If you found this summary useful, consider forwarding to a friend you think might enjoy it.

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​To Summarise​