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Learn the key ideas of the book by Richard Rumelt

Good Strategy / Bad Strategy

Distinguish between a good and a bad strategy

Having a bad strategy is even worse than not having any strategy at all. With this conviction as its starting point, “Good Strategy/Bad Strategy” puts great importance not only on finding a strategy that is worthwhile, but also on highlighting any “key indicators” of a bad one. Since planning on the basis of a bad strategy is the equivalent to building a house on the sand, tips for avoiding this mistake can be just as useful to strategists as tips that point to the milestones of success.

Good Strategy / Bad Strategy
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Many useful tips to:

  • Understand what the right conditions necessary for a good strategy are.
  • Get to grips with the structural elements involved.
  • Learn to identify the distinctive elements of a bad strategy.

The author of the book:

Richard Rumelt, is a prominent professor at the University of California, Los Angeles. He worked as a Systems Design Engineer at Jet Propulsion Laboratories before earning his degree from Harvard Business School in 1972 and joining the faculty as an assistant Professor. A founding member of the Strategic Management Society, he is known for his ground-breaking studies on business strategy. With his book Good Strategy / Bad Strategy he redefined strategy as a form of problem solving.


The first ingredient of a good strategy is a good leader, capable of understanding challenges

In 1805, Admiral Nelson won the Battle of Trafalgar setting off on a back foot with his forces outnumbered. Feeling sure that his captains were more skilled than those of his enemies, he bet on a move that turned out to be a winner: he exposed himself to risk, in order to disorientate his adversaries. This is exactly what a good strategy needs: a talented leader capable of identifying two or three key factors and focussing action and resources on them.

The biggest responsibility of a leader is to know how to analyse and understand challenges, and the heart of strategising consists of finding out the critical factors of a solution and organising action to resolve them. However, many people use a bad strategy: they ignore their problems and behave as though the captain of their team was pushing them towards victory without any guidance. Those that just reel off the usual key words such as “objectives, ambition, vision and values” are following a bad strategy, because these are important components but they cannot be a substitute for a real strategy.


The key ideas of "Good Strategy / Bad Strategy"

The first ingredient of a good strategy is a good leader, capable of understanding challenges
Strategy is the rational response to an important challenge
A good strategy has a logical structure made up of three elements: diagnosis, guidelines and coherent actions
Two cases of successful strategy: Steve Jobs and Walmart
A bad strategy is the opposite of a good strategy and is recognisable through specific behaviours
Being able to foresee short term events is a part of the creation of great strategies
Keep an eye on the weak link: it is the element on which your performance should be measured
Anomalies and intuition: the Starbucks case
To sum up: sharp vision is required to add value the present and the immediate future
Take-home message

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