Good Strategy/Bad Strategy: The difference and why it matters
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- Create Date：2021-05-21 10:53:52
- Update Date：2025-09-06
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- Author：Richard P. Rumelt
- ISBN：1781256179
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Summary
Developing and implementing a strategy is the central task of a leader， whether the CEO at a Fortune 100 company， an entrepreneur， a church pastor， the head of a school， or a government official。 Richard Rumelt argues that the heart of a good strategy is insight - into the true nature of the situation， into the hidden power in a situation， and into an appropriate response。 He shows you how insight can be cultivated with a wide variety of tools for guiding your own thinking。
Good Strategy/Bad Strategy integrates fascinating examples from business， nonprofit， and military affairs to bring its original ideas to life: From Apple to General Motors， from the two Iraq wars to Afghanistan， from a small local market to Wal-Mart， from the Getty Trust to the Los Angeles Unified School District， from Global Crossing to the 2007-08 financial crisis， and many more。 The abundance of business-ready insights offered by Rumelt stem from his decades of digging beyond the superficial to address hard questions with honesty and integrity。
Good Strategy/Bad Strategy integrates fascinating examples from business， nonprofit， and military affairs to bring its original ideas to life: From Apple to General Motors， from the two Iraq wars to Afghanistan， from a small local market to Wal-Mart， from the Getty Trust to the Los Angeles Unified School District， from Global Crossing to the 2007-08 financial crisis， and many more。 The abundance of business-ready insights offered by Rumelt stem from his decades of digging beyond the superficial to address hard questions with honesty and integrity。
Reviews
Sam
，
It was good， but not mind blowing， probably a 3。5。 The depth of anecdotes are impressive and there are some neat tactics， but the overall idea of having a coherent and self-reinforcing competitive strategy didn't strike me as particularly mindblowing It was good， but not mind blowing， probably a 3。5。 The depth of anecdotes are impressive and there are some neat tactics， but the overall idea of having a coherent and self-reinforcing competitive strategy didn't strike me as particularly mindblowing 。。。more
Andrew
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A few snippets of good informational and excellent insights that could have all been more effectively communicated in a single， 15-20 page chapter。 Rumelt rambles on， redundantly restating less than valuable insights。 Struggled to hold my interest。
Alex Bulankou
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In a world where "strategic" label is attached to any statement， idea or observation that has a trace of logic or a call for action or increasingly just belief or emotion， it is refreshing to see an clear and structured approach to thinking about critical elements of a good strategy。One of my favorite quotes: "I do not know whether meditation and other inward journeys perfect the human soul。 But I do know that believing that rays come out of your head and change the physical world， and that by t In a world where "strategic" label is attached to any statement， idea or observation that has a trace of logic or a call for action or increasingly just belief or emotion， it is refreshing to see an clear and structured approach to thinking about critical elements of a good strategy。One of my favorite quotes: "I do not know whether meditation and other inward journeys perfect the human soul。 But I do know that believing that rays come out of your head and change the physical world， and that by thinking only of success you can become a success， are forms of psychosis and cannot be recommended as approaches to management or strategy。 " 。。。more
Celso
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You know how some books read like they could have （and maybe should have） been written as a blog post？ This is one of those。
Andriy Bas
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Very valuable book。 One of the few non-bullshit books on the business strategy！
Joshua
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While some examples dragged forever to me， this book had a lot of solid， useful information。 Definitely recommend it。 Audio book might have been a better choice for me。
Edward Xiao
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Surprising simple frameworks that make you wonder why everyone doesn't do it。 For something as complex as strategy， it's been oddly generalized to such a degree that it's difficult to know the true meaning。 Rumelt distills the essential components and uses real life cases to make the point。 Highly recommend！ Surprising simple frameworks that make you wonder why everyone doesn't do it。 For something as complex as strategy， it's been oddly generalized to such a degree that it's difficult to know the true meaning。 Rumelt distills the essential components and uses real life cases to make the point。 Highly recommend！ 。。。more
Gordon
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Good book to help figure out a company's strategy。 Not so good to help form your own strategy。More than half the stories were about war and politics。 The remaining were case studies of businesses。 There are glimpses of insights to gain but the reader has to work for them。 Good book to help figure out a company's strategy。 Not so good to help form your own strategy。More than half the stories were about war and politics。 The remaining were case studies of businesses。 There are glimpses of insights to gain but the reader has to work for them。 。。。more
Shevaun
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Absolutely awesome！ On completing this book it felt like having graduated MBA！ :）Written in great detail to support the facts。Will surely re-read religiously and apply a lot of the knowledge sincerely。
Jos Polfliet
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Good book that taught me the super important difference between good strategy and bad strategy。What I learned:（view spoiler）[- Strategy is not WHAT you want to achieve， it is HOW you will achieve it。 **Setting goals is not a strategy**。 Goals are wishful thinking。- When making complex analytical decisions， don't trust your gut。 Get data。- A good strategy has three components 1。 Diagnosis of the current situation 2。 Guiding policy to resolve it 3。 Coherent action to solve the problem - A good str Good book that taught me the super important difference between good strategy and bad strategy。What I learned:（view spoiler）[- Strategy is not WHAT you want to achieve， it is HOW you will achieve it。 **Setting goals is not a strategy**。 Goals are wishful thinking。- When making complex analytical decisions， don't trust your gut。 Get data。- A good strategy has three components 1。 Diagnosis of the current situation 2。 Guiding policy to resolve it 3。 Coherent action to solve the problem - A good strategy is simple and focussed。 It is never self-contradicting or based on trying to shoot all ducks which will cause you to be spread to thin。 Competing objectives are the worst。- Myopia （tunnel vision） can lead to bad strategy。 Rumelt even introduced a nice trick to role-play "internal advisors" critiquing your strategy。 You might find it a bit special to ask imaginary friends to weigh in， but I believe it has merit in trying to break out of your regular thought patterns。- Sometimes， the simplest strategy is asking yourself "What are my 10 biggest problems in order， and why am I not working on problem 1？"。- "Try harder"， "work harder"， "be better" are not strategies but fluff。（hide spoiler）]Overall all the examples and anecdotes were aligned with the content， entertaining reads and usually informative。 Most of them also offered new perspectives， even to well-known business analyses like Starbucks， Apple， Intel or Nvidia。 I had the feeling Rumelt's analysis dug deeper and were less superficial。 The length was perfect for me。 Any longer and it would have become repetitive。 Any shorter and it would miss the proper nuances and examples。The science was there from time to time， but I would not call it a research-based or scientific manuscript。 It has more Anybody else found the ending weird？ It is a long recap of the financial crisis of 2008， but it lacks analysis and afterwards the book just 。。。 stops？ It came unexpected to me。 。。。more
Sandro Mancuso
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The book could be summarised in one or two chapters。 The examples of different companies are interesting but make the book unnecessarily long。 The book grabbed my attention in the first chapters but I caught myself struggling to keep going after one third。 Ended up finishing it but had to jump a few pages here and there。
Casey Watson
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I have a love / hate relationship with this book。 I actually learned a lot and was able to apply it at work immediately。 But some of the style annoyed me， like we get it Richard， you are brilliant and everybody would be better off if they would just listen to you。 But I really enjoyed reading about his class sessions and appreciate the teaching around thinking about how you think。
Anli Kotzé
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Thinking about our own thinking The most important skill: the ability to think about your own thinking， to make judgements about our own judgements。 Not accepting the first thought that comes into our heads when thinking about a tough question， relieved and choose the easy route out。
Swapnil Agarwal
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It helps you understand what a good strategy looks like， in an unnecessary long text。
Chelsea Lawson
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Generous 3。 I definitely learned a lot about what strategy is and how to go about it - focus on diagnosing the issue， develop proximate objectives， actions should all be part of a coherent design。。。 But the stories felt excessive and boring。
Ko Matsuo
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This is a helpful book。 Rumelt differentiates strategy from fluff， motivational slogans， and business buzz。 He redirects strategy to where it should be: "a cohesive response to an important challenge" which includes a diagnosis， a guiding policy， and coherent action。 Therefore， biggest pitfalls include "fluff， the failure to face the challenge， mistaking goals for strategy， and bad strategic objectives。"The biggest issues are that his examples tend to be *very* old and dated， and that he tends t This is a helpful book。 Rumelt differentiates strategy from fluff， motivational slogans， and business buzz。 He redirects strategy to where it should be: "a cohesive response to an important challenge" which includes a diagnosis， a guiding policy， and coherent action。 Therefore， biggest pitfalls include "fluff， the failure to face the challenge， mistaking goals for strategy， and bad strategic objectives。"The biggest issues are that his examples tend to be *very* old and dated， and that he tends to ramble quite a bit。 Both of these diminishes the value of the book and adds the very fluff， business buzz， and non-coherency that he preaches so hard against。 。。。more
Sara （onourshelves）
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3。5I think Rumelt made some good points， specifically about how strategy needs to be based on action and a problem you are trying to fix， not just a bunch of fancy words that don't mean anything。 His tone I thought was kinda fun， especially for a business book that would usually be super dull。 I do think he kinda lost the plot a little bit on some of his examples--some of them got very confusing， but some were really solid as well。 Overall， a fairly solid strategy book。 3。5I think Rumelt made some good points， specifically about how strategy needs to be based on action and a problem you are trying to fix， not just a bunch of fancy words that don't mean anything。 His tone I thought was kinda fun， especially for a business book that would usually be super dull。 I do think he kinda lost the plot a little bit on some of his examples--some of them got very confusing， but some were really solid as well。 Overall， a fairly solid strategy book。 。。。more
Alex Robinson
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Business Book In ‘Actually Being Good’ Shocker！
Łukasz Schmidt
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Książka która wytyka palcem wiele teoretycznych， "pustych" strategii firmowych które strategiami nie są。 W wielkim skrócie - pokazuje by opierać się na faktach a nie wielkich hasłach czy opiniach。 Podejmowanie decyzji nie jest łatwym kawałkiem chleba， książka wskazuje kilka metod。 4/5 tylko ze względu na to że czasem odbiega w stronę historii i makroekonomii - mięcho jest przemieszane historyjkami。 Dla niektórych to będzie na plus， dla mnie zbyt mocno schodziło z podstawowego toru tematycznego。 Książka która wytyka palcem wiele teoretycznych， "pustych" strategii firmowych które strategiami nie są。 W wielkim skrócie - pokazuje by opierać się na faktach a nie wielkich hasłach czy opiniach。 Podejmowanie decyzji nie jest łatwym kawałkiem chleba， książka wskazuje kilka metod。 4/5 tylko ze względu na to że czasem odbiega w stronę historii i makroekonomii - mięcho jest przemieszane historyjkami。 Dla niektórych to będzie na plus， dla mnie zbyt mocno schodziło z podstawowego toru tematycznego。 。。。more
Simon
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Some good points but the chapters can be more organised in a flow to get the message across
Christopher
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A little meh。 Could have been a 12 page essay if you cut out the political and MBA stuff。 Wouldn't recommend anyone to read more than a summary。 A little meh。 Could have been a 12 page essay if you cut out the political and MBA stuff。 Wouldn't recommend anyone to read more than a summary。 。。。more
Andrii Karabak
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Подход к опредению стратегии - толковый， дает понимание， как подходить к данному вопросу。 Но очень много воды。 В начале книги дана концепция， которую автор в течение всей книги пытается безуспешно подкрепить примерами。 Такое впечатление， что автор про свой успешный успех и проницательность рассказывает， а не о стратегии。Хороший пример того， как сложные концепции можно подкрепить примерами - это Дилемма инноватора Кристенсена。 Автору стоит у него взять пример ☺️。
Simon Eskildsen
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Good strategy isn't 3D-chess conjured at an LCD-induced board meetings guided by a shaman and superior industry acumen， as the book explains:> Good strategy almost always looks this simple and obvious and does not take a thick deck of PowerPoint slides to explainThat's the main takeaway。 Be suspicious if anyone tells you strategy is anything more complicated than that。Bad strategy:* Goals aren't strategy （without action and ability to identify obstacles）* Ambition （plenty of people have ambition Good strategy isn't 3D-chess conjured at an LCD-induced board meetings guided by a shaman and superior industry acumen， as the book explains:> Good strategy almost always looks this simple and obvious and does not take a thick deck of PowerPoint slides to explainThat's the main takeaway。 Be suspicious if anyone tells you strategy is anything more complicated than that。Bad strategy:* Goals aren't strategy （without action and ability to identify obstacles）* Ambition （plenty of people have ambition without a strategy）* Motivation* CharismaGood strategy， nothing magical:* Simple* Prioritization （sacrificing important things is a sign you're doing it right）* Proximate and ultimate objectives* Clearly identifies obstacles / bottlenecks 。。。more
Sandeep Reddy
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3。5 stars。 A good book to understand the “what” of strategy。 Has some good mental models to think about whether or not something is a strategy。
Tasha Nagel
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I didn’t even make it to the end of this book。 I lost interest。 The first section is long-winded。 Some of the business examples are interesting but the military examples were far from exciting （and less than relevant to any non-American reader）。 There are valuable insights if you wade through the rest。
Ricali Ebejer
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This book is full of truth and great advice， but fuck me stop with the endless anecdotes to prove your point！I'd rather just absorb the valuable lessons， or be provoked to think， instead， you're hit with a hypothesis and then beaten over the head with examples until you're numb， staring at the wall and wondering （'Will my MBA really help me find love in this world？'） 3 stars， helpful， but a monotonous slog。 This book is full of truth and great advice， but fuck me stop with the endless anecdotes to prove your point！I'd rather just absorb the valuable lessons， or be provoked to think， instead， you're hit with a hypothesis and then beaten over the head with examples until you're numb， staring at the wall and wondering （'Will my MBA really help me find love in this world？'） 3 stars， helpful， but a monotonous slog。 。。。more
Valtteri Mäkilä
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This review has been hidden because it contains spoilers。 To view it， click here。 Key insigths from the book:Strategy does not equal ambitious goals， filled templates or a mission statement。 Its a set of coherent actions based on a thorough analysis， i。e。 a diagnosis of the main challenges that are being faced。In the book， a concept called the strategy kernel is introduced。 It consists of the following steps:1。 Diagnosis: What is the challenge here？ Aim is to simplify the complexities of the real world。2。 Guiding policy: How to address the challenges identifed earlier？ What n Key insigths from the book:Strategy does not equal ambitious goals， filled templates or a mission statement。 Its a set of coherent actions based on a thorough analysis， i。e。 a diagnosis of the main challenges that are being faced。In the book， a concept called the strategy kernel is introduced。 It consists of the following steps:1。 Diagnosis: What is the challenge here？ Aim is to simplify the complexities of the real world。2。 Guiding policy: How to address the challenges identifed earlier？ What not to do？3。 Coherent action: Use desing and remeber focus when deciding on what to do。 Don’t forget to ask why something is done。Bad strategy: 1。 Fluff 2。 Failure to face the challenge 3。 Mistaking goals for strategy 4。 Bad strategic objectives （fail to address the critical issue， impracticable）Good srategy: 1。 Intelligent anticipation 2。 A guiding policy that helps to reduce complexity 3。 Leverage desing， focus and your advantages。 Understand the effects of inertia when analyzing the upcoming changes。Other ideas brought forward in the book:* Apply strength， energy and resources to your best opportunity - consider the competition and use your advantages to force extreme costs on them* Strategy is mostly about deciding the things you won’t pursue* Use proximate objectives （E。g。 Kennedy’s ambition to get a man on the moon by the end of the decade）* In a chain-linked system， it’s essential to identify the bottlenecks in order to improve* Focus: Actions and policies that together are more valuable than simply the sum of those individual actions and policies* Growth: Outcome of having superior skills ans products* Inertia: Unwillingness to change* Entropy: The rate of change in closed systems increases with time。 Excess must be streamlinead and operations simplified。* Focus more on the question of WHY something is done and not on WHAT should be done。 How does that set of actions contribute given the challenges you have identifies？* Try to use scientific induction if possible: Data， hypothesis， testing， rejection/acceptance， new hypothesis etc。* Question your own thinking: Build an imaginary advisory board and try to understand how they might respond to your ideas* Record judgements so you can later learn from themAside from the book， a great summary， which can be found here （https://medium。com/mbreads/good-strat。。。）， was used to produce this review/summary。 。。。more
Venky
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A uniquely distinguishable book from its normal run of the mill compatriots， “Good Strategy Bad Strategy” by Richard Rumelt， makes for some refreshing as well as ambivalent reading。 While the author by juxtaposing real life examples and management theory， rivetingly differentiates good strategic making capabilities from the bad ones， the reader at the end is still left ruminating on the one differentiating element that separates strategy from other routinely employed measures such as vision， lon A uniquely distinguishable book from its normal run of the mill compatriots， “Good Strategy Bad Strategy” by Richard Rumelt， makes for some refreshing as well as ambivalent reading。 While the author by juxtaposing real life examples and management theory， rivetingly differentiates good strategic making capabilities from the bad ones， the reader at the end is still left ruminating on the one differentiating element that separates strategy from other routinely employed measures such as vision， long term and short range planning etc。 Rumelt bemoans the fact that the experts and the unsuspecting alike seem to be perpetually yoked to certain misconceptions when it comes to strategy。 Such misconceptions lead to unintended consequences for both the executives as well as their corporations。So what according to this reputed and renowned Harry and Elsa Kunin Emeritus Professor of Business & Society at the University of California， Los Angeles Anderson School of Management， are the attributes of a good strategy and the pitfalls of a bad strategy？ Let us dive deep into the world of paradoxical decision making:A good strategy according to Rumelt has the following three “kernels”:DiagnosisGuiding Policy andCoherent ActionRumelt’s solution and definition of a proper strategy is one that confines within its nub the ‘discovery of critical factors in a situation， and designing a way of coordinating and focusing actions to deal with those factors。’ Thus the first step in any good strategy is to identify and candidly acknowledge the existence of a problem。 The second step is to chalk out a guiding policy to address the problem and finally， employ a set of coherent action steps that overcome the seemingly insurmountable obstacles in an implementable， rational， cohesive and logical manner。 These were the kernels that enabled Steve Jobs to bring Apple back from the brink when the company had lost sight of its priorities and focus， and aided and abetted General Norman Schwarzkopf to pull off the impossible in the Iraqi war which had， at the outset forecast some terrible loss of lives for the US and Coalition Forces。 “Good strategy requires leaders who are willing and able to say no to a wide variety of actions and interests。 Strategy is at least as much about what an organization does not do as it is about what it does。 The second natural advantage of many good strategies comes from insight into new sources of strength and weakness。 Looking at things from a different or fresh perspective can reveal new realms of advantage and opportunity as well as weakness and threat。”So is there something called a bad strategy？As Rumelt informs his readers， Bad strategy does not mean an absence of good strategy。 A bad strategy is emblematic of specific misconceptions and leadership dysfunctions。 Rumelt argues that there are four inimitable “hallmarks” characterizing a bad strategy:Fluff: A form of gibberish masquerading as strategic concepts or arguments。Failure to face a challengeMistaking goals for strategy; andBad strategic objectives where strategic objectives are set by leaders as a means to an end。Rumelt illustrates the example of fluff by taking recourse to an excerpt from an internal strategy memoranda of a reputed international bank。 “Our fundamental strategy is one of customer-centric intermediation。” According to Rumelt， “The Sunday word “intermediation” means that the company accepts deposits and then lends them to others。 In other words， it is a bank。 The buzz phrase “customer-centric” could mean that the bank competes by offering depositors and lenders better terms or better service。”Rumelt also warns his reader on the perils of falling prey to a ‘template style strategic planning。’ More often than not strategies are a concomitant of a template that determines what a “strategy” should look like。 Being an imprecise concept， leaders have this understandable tendency to adopt a tenuous template that is amenable to easy and uncomplicated “filling in。” These templates then double up as “strategy documents。” Thus， a plethora of vision and mission statements， corporate values and of course， overall holistic strategies。Sources of PowerPart II of “Good Strategy Bad Strategy， titled “Sources of power” dwells into the various practical strategic approaches and their advantageous application。 Some of the most common means of such application， according to Rumelt are:Using LeverageProximate ObjectivesChain-link SystemsUsing DesignFocusGrowthUsing AdvantagesUsing DynamicsInertia and EntropyThe complete inability of Blockbuster to perceive the threats posed by Netflix that ultimately led to the former becoming bankrupt or Microsoft’s pedestrian response despite having a large early lead in mobile phone operating systems， that accorded a gigantic opening for Apple and Google represent classic illustrations of the Inertia and Entropy facets。The concept of proximate objectives simply means focusing on an objective that is close enough at hand to be feasible， i。e。 proximate。 For instance， while the first moon landing has been eulogized unrelentingly， many miss out on the fact that in the year 1969， the objective of landing a man on the move was already a proximate objective。 This was mainly due to the fact that President John F。 Kennedy realised the requisite technology and science was within arm’s length and it was just a matter of allocating， focusing， and coordinating resources in a systematic fashion。Similarly， a system has chain-link logic when its performance is limited by its weakest link。 This implies that every department is dependent on other departments and any inefficiency in one department will adversely impact the overall performance of the entire system。 For example， IKEA designs its own furniture， constructs its own stores， and does not outsource even its supply chain。 This is a perfect example of a chain-linked system。 IKEA will be rendered vulnerable if even one link in its chain underperforms。Rumelt rounds off the discussion on the Sources of Power and their harnessing to achieve comparable and industry advantage by elaborating on the strategy adopted by Nvidia， the computer graphics entity that dominated the market for 3D graphics。While Rumelt’s book is definitely one of its kind， the author could have devoted more time to drive home the quintessential elements that constitute strategy thereby differentiating the term from a whole horde of confusing and mimicking management jargons。 。。。more
George Andrews III
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The book could have been one chapterChapter 5 was great。 It provided a framework for thinking a bout and assessing strategy。 The rest focused on his work in strategy with companies as well as larger economic and political forces that did not add much for me。 To be honest， I was looking more for a “how to” and less story。
Limbikani
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