Good Strategy Bad Strategy - Richard Rumelt

Good strategy

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strategy is primarily about deciding what is truly important and focusing resources and action onto that objective. it is a hard discipline to follow because focusing on one thing slights another.

The Kernel

Diagnosis: defines or explains the nature of the challenge: what's going on here?

Guiding Policy: (a) overall approach for dealing with the obstacles identified in the diagnosis; (b) define a method of dealing with challenge and rule out array of approaches

Create advantage by anticipating actions and reactions of others; reduces complexity and ambiguity in the situation; exploits leverage by concentrating effort on pivotal or decisive point; establishes coherence in approach and policy

Coherent actions: coordinated steps designed to accomplish the guiding policy

define goals

set limited number of good objectives for each goal

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a leader's most important job is creating and constantly adjusting the strategic bridge between goals and objectives

Achieve strategic coordination or coherence must be imposed on a system by policy and design; use proximate (near enough) objectives

Strategy is visible as coordinated action imposed on a system. good strategy and good organisation lie is specialising on the right activities and imposing only the essential amount of coordination.

Key strength

Window(s) of opportunity, internal & external

Leverage: power from focusing minds, energy and action

Anticipation

Pivot points to magnify the effects of focused energy and resources

Concentration and the balance between flows threshold effects

Leadership. (a) An important duty of any leader is to absorb a large part of the complexity and ambiguity, passing on to the organisation a simpler problem - one that is solvable. (b) The more uncertain and dynamic the situation, the more proximate a strategic objectives must be. (c) Take a strong position and create options, not looking far ahead.

FOCUS. (a) the coordination of policies that produce Ezra power through their interacting and overlapping effects. (b) the application of that power to the right target

Key weaknesses. Internal and external

Breaking organisational culture

Simplification

Fragment operating units then triage

Change norms and work related norms, usually replacing alpha individuals

Reverse some of earlier fragmentation with new coordinating mechanism

Bad Strategy

FLUFF superficial restatement of the obvious combined with s generous sprinkling of buzzword

FAILURE TO FACE THE PROBLEM: define the problem and the way through it in response to the challenge. Anticipate the real world problems that need to be overcome.

MISTAKING GOALS FOR STRATEGY.

BAD STRATEGIC OBJECTIVES.