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Good Strategy . . . and Not-So-Good Strategy

These past few months have been a bit of a reading frenzy. 

July 25, 2012

These past few months have been a bit of a reading frenzy as I prep to teach Strategic Management again this fall.  We are completely revamping the syllabus, so this gives me the chance to reread a lot of good books, articles, and cases – and discover some new ones. 

One that I consider a “new classic” is the book Good Strategy / Bad Strategy: The Difference and Why It Matters, by Richard Rumelt from the UCLA Anderson School of Management.  If you’d like a pithy synopsis, check out the McKinsey Quarterly article, The Perils of Bad Strategy

The underlying theme of the book/article is that good strategy requires an honest assessment of the situation, focus on one or two key goals, and a coordinated series of steps to achieve these goals – and much of what passes for strategy and strategic planning these days is not good strategy.

According to Rumelt, “bad strategy ignores the power of choice and focus, trying instead to accommodate a multitude of conflicting demands and interests” and the hallmarks of bad strategy are:

Failure to face the problem.  Rumelt: “If you fail to identify and analyze the obstacles, you don’t have a strategy.  Instead, you have a stretch goal or a budget or a list of things you wish would happen.”  If strategy is a plan for overcoming an obstacle or responding to a challenge, if that challenge is not properly identified and defined, then how can it be a good strategy? 

Mistaking goals for strategy.  There needs to be not only a goal, but a plan for how to achieve that goal. What other goals will you forgo in favor of your main goal?  How will resources be coordinated to reach the main goal? 

Bad strategic objectives.  Rumelt: “A long list of things to do, often mislabeled as strategies or objectives, is not a strategy.”  Are you trying to incorporate too many peoples’ (or groups’) suggestions?  Can you identify the one or two pivotal objectives worth committing to right now?  Look for those objectives that, when accomplished, will position you for achieving future objectives.

Fluff.  Rumelt: “Fluff is a restatement of the obvious, combined with a generous sprinkling of buzzwords that masquerade as expertise.”  Enough said on this one, as we’ve all probably seen too many of these documents.

Good strategy, by contrast, involves choice – what will you do and what will you not do – and focus.  And, as mentioned in a previous post, these are very deliberate decisions.  Good strategy also involves a diagnosis of the nature of the challenge, an overall approach to addressing the identified challenge, and a coordinated set of actions to support this approach. 

It all sounds so simple.  In some ways it is.  Strategy isn’t necessarily complex – it’s just hard. 


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