Sunday, August 7, 2011

Thoughts While Reading Good Strategy Bad Strategy by Rumelt

As I have become more passionate about strategy over the last few years, I have encountered all sorts of people who explained to me why strategy is unnecessary. I used to get frustrated or go silent in confusion, and mumble in my head, do you really think you are going to win without a coherent plan for how? 

Good Strategy Bad Strategy has helped to bolster my belief in strategy - no matter the size of the endeavor. But it has also helped me understand why people don't like strategy.  Good strategy is difficult, bad strategy is easy. Of course most people would be suspicious of strategy, if bad strategy is what they most often encounter. And according to Rumelt and his many examples, Bad Strategy (often no strategy) is the norm.

So, for starters, here are a few telltale signs that a strategy is in fact BAD, per Rumelt on page 32. (The book is a great read!)

1. Fluff - "words that are inflated and unnecessarily abstruse and apparently esoteric concepts to create the illusion of high-level thinking."

2. Failure to face the challenge - "Bad strategy fails to recognize or define the challenge.  When you cannot define the challenge, you cannot evaluate a strategy or improve it."

3. Mistaking goals for strategy - "Many bad strategies are just statements of desire rather than plans for overcoming obstacles."

4. Bad strategic objectives - "A strategic objective is set by a leader as a means to an end.  Strategic objectives are "bad" when they fail to address critical issues or when they are impracticable."

When I look at just this little list it makes me realize how much research, reflection and hard thinking goes into good strategy. No wonder why people dislike it so much, it's hard work.

And if you were wondering why to bother, here are a few notes from Rumelt on the value of Good Strategy summarized.
  • Just having a strategy puts you ahead of your competitors, as it is most likely they have none.
  • Coherent strategy design creates new strengths for an organization in the marketplace.
  • Designing strategy calls for looking at things with a new perspective, which often brings to light new advantages and opportunities, previously unforeseen.

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