Strategy is the identification of core problems and how those problems are to be resolved. In the book Good Strategy / Bad Strategy: The Difference and Why it Matters, Richard Rumelt claims “bad strategy” is the norm and “good strategy” (or strategy) is the exception and hard to come by.
Whether someone is an entrepreneur or a corporate lackey, to understand the difference between good strategy and bad strategy is crucial to the performance and survival of your business. In fact, Mr. Rumelt’s teachings bare meaningful insight that can be translated and used throughout an individual’s personal life and across industries, including government, foreign policy, and nonprofit work.
A common sign of a bad strategy is boisterous language about what is going to be achieved and a lack of information as to how it is going to happen. Mr. Rumelt provides many examples of leaders espousing “strategies” that are really just goals, and not providing a plan to attain them. On any given day, it is hard to disagree with Mr. Rumelt when reviewing many CEO’s comments regarding their companies’ strategy.
By providing numerous case studies, Mr. Rumelt clearly shows that a strategy is the identification of core problems and how those problems are to be resolved. A leader must identify the true, underlying problems facing their organization and then devise a plan to solve those problems. The end results will be survival of the organization and better performance metrics. Only having a goal of better performance metrics, or being highly respected, or superb growth is not a strategy.
Furthermore, having a good strategy is not enough to ensure success. Most companies do not have a coherent and focused strategy, but multiple targets and not enough resources applied to any of them to make any sort of breakthrough. Even if the organization had a good strategy, focus in the execution phase is paramount. Mr. Rumelt goes to great lengths to describe the level of focus necessary. The leaders in an organization should identify the core problems facing them, devise a plan as to how these problems will be solved, and focus all resources in the organization towards executing the strategy. Any faltering in the execution or minimally applied resources will result in failure.
Richard Rumelt’s book is supremely beneficial and deeply insightful. Any entrepreneur would benefit from following Mr. Rumelt’s guidance. Strategy isn’t just a rallying cry of “let’s win”, but a fiercely executed and coherent plan to solve problems.