The key ideas

Good Strategy Bad Strategy: The Difference and Why It Matters

Richard Rumelt, 2011

Why do so many "strategies" change nothing? Richard Rumelt shows that most of them are slogans, numbers and wish lists, while a real strategy names the main difficulty and gathers forces against it. You'll see the difference in examples from Apple to the Moon programme, and you'll be able to test your own plan.

Who it is for

For leaders, entrepreneurs and anyone who writes plans and sets goals. And for anyone tired of strategies after which nothing changes.

Many bad strategies are just statements of desire rather than plans for overcoming obstacles.

A hundred hours nobody expected

In the winter of 1991 the world was expecting a hard war in the desert. The Iraqi army had spent months entrenching itself in Kuwait, and commentators predicted a frontal assault with huge losses. General Norman Schwarzkopf did something else. First, air power spent a long time destroying the enemy's communications and equipment. Then, while Iraq's attention was held by strikes from the front and feints from the sea, about a quarter of a million soldiers quietly moved west and struck at the flank. The ground phase of Operation Desert Storm took about a hundred hours.

Richard Rumelt, a professor of strategy at the University of California, Los Angeles, notices something odd about this plan. There was nothing new in it: the flanking move had long been described in military textbooks. What was surprising was something else: that anyone had a real strategy at all. Good strategy catches people off guard precisely because it's rare.

Rumelt published this book in 2011. His point is simple and uncomfortable: most documents called strategy are nothing of the kind. They are slogans, wish lists and big numbers. A real strategy is a response to a specific difficulty: what stands in the way, what to focus on, and which steps must work together.

You'll see how to tell one from the other in examples from Apple to the Moon programme. And you'll learn to ask the question many plans can't survive: how exactly is this going to work?

The bank whose strategy was to be a bank

Rumelt quotes a line from an internal memo of a large retail bank: "Our fundamental strategy is to be a customer-centric intermediary." It sounds weighty. But intermediation is exactly what every bank does: take deposits and make loans. Strip off the wrapping and you're left with the sentence "Our bank's strategy is to be a bank."

Rumelt calls this move fluff. Fluff is the obvious, dressed up in fashionable words, passing itself off as deep thought. The word "customer-centric" cost nothing: not a single decision stood behind it that would make the bank more attentive to customers than the one next door.

Fluff is dangerous not because it's dull. It creates the feeling that the work is already done. Management reads the fine words and believes there is a strategy, though nobody has decided what exactly to do differently. Rumelt takes the thought further: a hallmark of mediocrity is unnecessary complexity, a flood of words with no content behind it. The foggier the document, the more likely it is empty.

The test is simple. Translate the sentence into plain language and ask what will change on Monday morning. If there's no answer, what you have isn't a strategy but words about one.

Read in Livria

About the author

Richard Rumelt is an American strategy scholar and professor emeritus at the Anderson School of Management at the University of California, Los Angeles. He started out as an engineer at a NASA space laboratory.

All books by this author: Richard Rumelt

Terms from the book

  • New Thought
  • General Motors
  • Jobs
  • Walmart
  • IBM
  • Challenger
  • Kennedy
  • Asymmetry
  • Starbucks
  • Schultz
  • Marshall
  • Schwarzkopf: Norman Schwarzkopf (1934–2012), an American general who commanded the coalition forces in the 1991 Gulf War.
  • Desert Storm: The 1991 operation by a US-led coalition to free Kuwait from Iraqi forces. Its ground phase lasted about a hundred hours.
  • Fluff: Rumelt's word for an obvious thought dressed up in fashionable words and passed off as deep analysis.
  • Logan: Chad Logan, head of a graphic design company and a client of Rumelt's, whose "20/20" plan is examined in the book.
  • Dog's dinner: Rumelt's expression for a plan into which everyone's wishes have been thrown without any selection.
  • Gerstner: Lou Gerstner, an American executive who ran IBM from 1993 to 2002 and led the company out of crisis.
  • Kernel: The kernel of a strategy, Rumelt's concept: a diagnosis of the situation, a guiding policy and coherent actions.
  • Guiding policy: The second part of Rumelt's kernel of strategy: the overall approach to overcoming the difficulty, chosen after the diagnosis.
  • Jet Propulsion Laboratory: A research centre in California (JPL) that builds robotic spacecraft for NASA.
  • Surveyor: A NASA programme that sent robotic craft to the Moon between 1966 and 1968 for soft landings and photography.
  • Buwalda: Phyllis Buwalda, a Jet Propulsion Laboratory staff member who wrote the working description of the lunar surface for Surveyor.
  • Proximate objective: Rumelt's concept: an objective close and clear enough for the team to actually achieve it.
  • Office of Net Assessment: A Pentagon office that compares the long-term military capabilities of the US and its rivals.
  • Roche: James Roche, an American naval officer and executive, co-author of the 1976 memo and later US Secretary of the Air Force.
  • O-ring: A rubber ring that seals a joint between parts and stops gas or liquid from escaping.
  • Chain-link system: Rumelt's image: a system whose performance is set by its weakest link.
  • IKEA: A Swedish company that sells furniture and home goods in large stores, often flat-packed for self-assembly.
  • Discounter: A store that sells goods at low prices thanks to large volumes and savings on everything else.
  • Walton: Sam Walton (1918–1992), an American entrepreneur who founded Walmart in 1962.
  • Nvidia: An American company founded in 1993 that makes graphics processors.
  • Huang: Jensen Huang, co-founder and longtime head of Nvidia.

All terms

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