Skip to main content

Review: Good Strategy/Bad Strategy - the difference and why it matters

"Damn!  Here's the book I've been meaning to write."  That was my reaction just a few pages into "Good Strategy/Bad Strategy - the difference and why it matters" by Richard Rumelt, but he's got far more credibility than me, so maybe it's just as well he beat me to it. Rumelt, a professor at UCLA's Anderson Business School, is rated by The Economist as one of the world's most influential thinkers on business strategy, and his latest book was shortlisted for the Financial Times 2011 Business Book of the Year.

Good Strategy/Bad Strategy is divided into three parts.  Part I opens with some examples of good strategy which, Rumelt explains, typically demonstrate:
  • a fundamental insight to the strategic situation (what I term "a blinding flash" of what can seem obvious - in retrospect - and usually simple rather than complex);
  • a guiding principle or policy of what to do and how (I ask people to define their “offer to the world and how to make and fulfill it”); and
  • a coherent plan of action, with the resources and commitment to make it happen (exactly what I always say).
It's the combination of all 3 elements that makes for good strategy.  Sadly, many readers will recognise their own organisation's failings reflected in Rumelt's examples of bad strategy (sometimes disguised to protect the guilty).  Again, Rumelt and I see similar problems:
  • fluff:  blue-sky goals without a convincing strategic rationale, and few, if any, decisive actions to achieve them;
  • self-delusion: ignoring the real issues;
  • avoiding hard choices and trying to please all constituencies; (my oft repeated mantra is that good strategy is about making hard choices and meaning them);
  • wishful New Age thinking.
In Part II, Rumelt explores various "sources of power", identifying them and applying them  to greatest effect.  This part is slightly heavier going, but it's worth it for the insights to different situations.  In Part III, Rumelt gives some advice on thinking like a strategist, which might be summarised as being open-minded, self-critical and cool-headed.

The book's final chapter looks at the Global Financial Crisis.  Although insightful, it seems like a last minute add-on and would probably have been better placed in Part I.  However, that is a minor quibble.  Rumelt's book is well worth the purchase price (and a very reasonable price too, now the paperback is out). 

Disclosure: Isambard receives commissions from Amazon for purchases made through links from this site, but that doesn't influence my comments.