Good Strategy, Bad Strategy

Richard Rumelt, professor emeritus and author of Good Strategy Bad Strategy and The Crux, explains strategy as a design for overcoming a high-stakes challenge rather than a set of goals or analytical frameworks. The conversation covers the kernel of diagnosis, guiding policy, and coherent action, signs of bad strategy, the role of power and asymmetry, organizational politics, and advice for founders.

01Key learnings

• Treat strategy as a response to one or two real challenges, not a list of ambitions, priorities, or aspirations; Rumelt suggests calling it an action agenda instead.
• A solid strategy has three parts: a diagnosis of the situation, a guiding policy for dealing with it, and coherent actions that support each other rather than conflict.
• Test your strategy for bad signs: goals dressed up as strategy, fluffy jargon, missing diagnosis, and actions that contradict one another, like pursuing growth and profit margin simultaneously without a plan.
• Keep the number of priorities small; focus concentrates power, and every additional yes can dilute a good strategy into a bad one.
• Identify your source of power by looking for asymmetries you hold that competitors don't, such as reputation, relationships, data, or inherited advantages, and focus them on an achievable target.
• Find the crux, the hardest part of the challenge; if you can't address it, the strategy is unlikely to work, and insight into it often comes from deep immersion in the problem.
• Use an ambition filter: list your ambitions, then choose the challenge that is both important to them and achievable with action you can take now.
• Founders should treat early strategy as a bet and stay willing to pivot toward different customers or products as evidence arrives, while remaining committed enough to act.

02Frameworks mentioned

Summary and takeaways written by PM Atlas; quotes are short excerpts. © the original author.