Name: Erwin Lemuel Oliva's review of Good Strategy, Bad Strategy by Richard P. Rumelt
Item: Good Strategy, Bad Strategy
Rating: 5
Author: Erwin Lemuel Oliva

Richard P. Rumelt

Even though everyone is talking about it, there is no concept in business today more muddled than 'strategy'. Richard Rumelt, described by McKinsey Quarterly as 'a giant in the field of strategy' and 'strategy's strategist', tackles this problem head-on in a jargon-free explanation of how to develop and take action on strategy, in business, politics and beyond.Rumelt dispels popular misconceptions about strategy - such as confusing it with ambitions, visions or financial goals - by very practically showing that a good strategy focuses on the challenges a business faces, and providing an insightful new approach for overcoming them. His sharp analysis and his brilliant, bold style make his book stand out from its competitors (something that Rumelt himself says is crucial).Rumelt has always challenged dominant thinking, ever since, in 1972, he was the first person to uncover a statistical link between corporate strategy and profitability - and this is his long-awaited tour de force.

The Difference and why it Matters

Good Strategy, Bad Strategy

Sammy Schuckert

Erwin Lemuel Oliva

Richard Rumelt’s "Good Strategy, Bad Strategy: The Difference and Why It Matters" is a compelling exploration into the nature of strategy in business and leadership. Through deep analysis and engaging anecdotes, Rumelt dissects what makes a strategy effective and separates genuine insights from the fluffy, ineffectual advice often touted in the business world.

Here are the highlights of this book, which took me a while to finish because it was that good.

1. The Kernel of Good Strategy: Rumelt introduces the concept of the "kernel," the backbone of any good strategy, which consists of three elements: a diagnosis, a guiding policy, and coherent actions. This framework helps clarify what a plan is as opposed to what many think it is. He emphasizes, "Good strategy requires leaders willing and able to say no to various actions and interests. Strategy is at least as much about what an organization does not do as it is about what it does."

2. The Fallacy of Bad Strategy: As Rumelt outlines, bad strategy often stems from having vague objectives, mistaking goals for strategy, or implementing a series of fluff-filled statements that do not address the organization's core challenges. He argues, "Bad strategy is long on goals and short on policy or action. It assumes that goals are all you need. It puts forward strategic objectives that are incoherent and, sometimes, totally impractical."

3. The Role of Insight and Focus: Insight plays a pivotal role in developing good strategy. Rumelt points out that insightful strategies simplify the complexity of reality by identifying pivotal factors in a situation and designing a way of coordinating and focusing actions to deal with those factors. He states, "The most powerful strategies arise from such game-changing insights."

After careful reading (with a lot of highlighting), I can extract numerous practical strategies for personal and professional growth:

1. Clarify and Confront the Real Challenges:  In everyday life, just as in business, directly acknowledging and diagnosing your main challenges or obstacles is vital. Rather than avoiding brutal truths or complex issues, identifying and confronting them head-on allows you to formulate practical and actionable strategies.

2. Simplify and Focus: Rumelt’s advice to simplify complexity and focus on critical aspects can be applied to personal productivity and decision-making. By focusing on a few crucial priorities and designing your actions around them, you can achieve more impactful results, whether in managing your time, projects, or personal goals.

3. Be Decisive in Action: The principle of coherent action in good strategy emphasizes aligning actions with overall strategy. In personal contexts, this means making decisions that consistently align with your long-term goals and values and being willing to say no to distractions that do not serve these objectives.

"Good Strategy, Bad Strategy" is not just a book for CEOs and managers; it is a text that offers valuable insights for anyone looking to think more strategically about their personal and professional lives. Rumelt’s clear and often provocative lessons help crystallize the essence of strategic thinking and how it can be applied across various scopes of life.

Richard Rumelt’s "Good Strategy, Bad Strategy: The Difference and Why It Matters" is a compelling exploration into the nature of strategy in business and leadership. Through deep analysis and engaging anecdotes, Rumelt dissects what makes a strategy effective and separates genuine insights from the fluffy, ineffectual advice often touted in the business world.

Here are the highlights of this book, which took me a while to finish because it was that good.

1. The Kernel of Good Strategy: Rumelt introduces the concept of the "kernel," the backbone of any good strategy, which consists of three elements: a diagnosis, a guiding policy, and coherent actions. This framework helps clarify what a plan is as opposed to what many think it is. He emphasizes, "Good strategy requires leaders willing and able to say no to various actions and interests. Strategy is at least as much about what an organization does not do as it is about what it does."

2. The Fallacy of Bad Strategy: As Rumelt outlines, bad strategy often stems from having vague objectives, mistaking goals for strategy, or implementing a series of fluff-filled statements that do not address the organization's core challenges. He argues, "Bad strategy is long on goals and short on policy or action. It assumes that goals are all you need. It puts forward strategic objectives that are incoherent and, sometimes, totally impractical."

3. The Role of Insight and Focus: Insight plays a pivotal role in developing good strategy. Rumelt points out that insightful strategies simplify the complexity of reality by identifying pivotal factors in a situation and designing a way of coordinating and focusing actions to deal with those factors. He states, "The most powerful strategies arise from such game-changing insights."

After careful reading (with a lot of highlighting), I can extract numerous practical strategies for personal and professional growth:

1. Clarify and Confront the Real Challenges:  In everyday life, just as in business, directly acknowledging and diagnosing your main challenges or obstacles is vital. Rather than avoiding brutal truths or complex issues, identifying and confronting them head-on allows you to formulate practical and actionable strategies.

2. Simplify and Focus: Rumelt’s advice to simplify complexity and focus on critical aspects can be applied to personal productivity and decision-making. By focusing on a few crucial priorities and designing your actions around them, you can achieve more impactful results, whether in managing your time, projects, or personal goals.

3. Be Decisive in Action: The principle of coherent action in good strategy emphasizes aligning actions with overall strategy. In personal contexts, this means making decisions that consistently align with your long-term goals and values and being willing to say no to distractions that do not serve these objectives.

"Good Strategy, Bad Strategy" is not just a book for CEOs and managers; it is a text that offers valuable insights for anyone looking to think more strategically about their personal and professional lives. Rumelt’s clear and often provocative lessons help crystallize the essence of strategic thinking and how it can be applied across various scopes of life.

Richard Rumelt

Good Strategy/Bad Strategy clears out the mumbo jumbo and muddled thinking underlying too many strategies and provides a clear way to create and implement a powerful action-oriented strategy for the real world Developing and implementing a strategy is the central task of a leader. A good strategy is a specific and coherent response to—and approach for overcoming—the obstacles to progress. A good strategy works by harnessing and applying power where it will have the greatest effect. Yet, Rumelt shows that there has been a growing and unfortunate tendency to equate Mom-and-apple-pie values, fluffy packages of buzzwords, motivational slogans, and financial goals with “strategy.” In Good Strategy/Bad Strategy, he debunks these elements of “bad strategy” and awakens an understanding of the power of a “good strategy.” He introduces nine sources of power—ranging from using leverage to effectively focusing on growth—that are eye-opening yet pragmatic tools that can easily be put to work on Monday morning, and uses fascinating examples from business, nonprofit, and military affairs to bring its original and pragmatic ideas to life. The detailed examples range from Apple to General Motors, from the two Iraq wars to Afghanistan, from a small local market to Wal-Mart, from Nvidia to Silicon Graphics, from the Getty Trust to the Los Angeles Unified School District, from Cisco Systems to Paccar, and from Global Crossing to the 2007–08 financial crisis. Reflecting an astonishing grasp and integration of economics, finance, technology, history, and the brilliance and foibles of the human character, Good Strategy/Bad Strategy stems from Rumelt’s decades of digging beyond the superficial to address hard questions with honesty and integrity.

The Difference and Why It Matters

Good Strategy Bad Strategy

The book is a brilliant primer on strategy that probably could have accomplished the same thing in half the pages. 

Brock

Tuago

Interesting and full of enriching examples. But as with 99% of business books, it could have been a blog post.

If you are looking for a book that explains what strategy is in plain, simple, specific and actionable terms … look no more. Richard’s experience and approach to strategy is unmatched. Also his stories from real life situations and cases made the book entertaining as well!

Ahmed Kamal Ali

When Richard Rumelt's Good Strategy/Bad Strategy was published in 2011, it immediately struck a chord, calling out as bad strategy the mish-mash of pop culture, motivational slogans and business buzz speak so often and misleadingly masquerading as the real thing. Since then, his original and pragmatic ideas have won fans around the world and continue to help readers to recognise and avoid the elements of bad strategy and adopt good, action-oriented strategies that honestly acknowledge the challenges being faced and offer straightforward approaches to overcoming them. Strategy should not be equated with ambition, leadership, vision or planning; rather, it is coherent action backed by an argument. For Rumelt, the heart of good strategy is insight into the hidden power in any situation, and into an appropriate response - whether launching a new product, fighting a war or putting a man on the moon. Drawing on examples of the good and the bad from across all sectors and all ages, he shows how this insight can be cultivated with a wide variety of tools that lead to better thinking and better strategy, strategy that cuts through the hype and gets results.

The difference and why it matters

Good Strategy/Bad Strategy

Swastik

The first half wasn't so great; the second half was fantastic. This is one of those rare business books that are insightful and easy to read.

I enjoyed the beginning part of the book where he went over the key components of strategy. The latter part wasn't as interesting to me.

Chad McElligott

Dweedle 

Came for the insight, stayed for the dressing downs

Jacob Munk-Stander

Insightful, enjoyable and relevant read on the origins and characteristics of good and bad strategy

Christian Bering Pedersen

A lot of the books about strategy tedious and boring to get through, with lots of models but little concrete advice. Good Strategy, Bad Strategy is one the first strategy books I have read that has a realistic, pragmatic approach, lots of good stories and experiences. It reads more like a memoir in some chapters than a theoretical text. Highly recommended.

Erwin Lemuel Oliva &
Good Strategy, Bad Strategy by Richard P. Rumelt

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Good Strategy, Bad Strategy by Richard P. Rumelt