Good Strategy Bad Strategy: The Difference and Why it Matters Paperback – 14 Jun 2012
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This is the first book on strategy I have read that I have found difficult to put down. (John Kay, London Business School)
There are precious few books that enable you to not only re-think the way you think but also improve your performance. Richard Rumelt's brilliant Good Strategy/Bad Strategy is one, a milestone in both the theory and practice of strategy. Cutting to the core of what makes the difference between success and being an also-ran, Rumelt uses vivid examples from the contemporary business world and global history that clearly show how to recognize the good, reject the bad, and make good strategy a living force in your organization. Everyone involved in creating and applying strategy and strategic thing must read this book. In a very crowded field like strategy, few books stand out. Richard Rumelt's new work is one of the exceptions. (John Stopford, Emeritus Professor, London Business School)
Good Strategy, Bad Strategy pinpoints the polar difference: The diagnosis and actions that constitute good strategy, the fluff and failures that cause the bad. Richly illustrated and persuasively argued by a researcher, teacher, and consultant, Richard Rumelt has authored the playbook for anybody in a leadership position who must think and act strategically. (Michael Useem, Professor of Management at the Wharton School, University of Pennsylvania, and author of The Leadership Moment)
Rumelt's new book clearly elevates the discussion of strategy. Using compelling examples and penetrating insights, Good Strategy/Bad Strategy provides new and powerful ways for leaders to tackle the obstacles they face. The concepts of "The Kernel" and "The Proximate Objective" are blockbusters. This is the new must-have book for everyone who leads an organization--business, government, or in-between. (Robert Eckert, Chairman and CEO of Mattel)
Rumelt blends a practical focus with powerful conceptual ideas to provide an insightful guide for those wrestling with the challenge of creating strategy that makes a real difference. (Mark Jenkins, Professor of Business Strategy, Cranfield Business School)
In his provocative new book, Richard Rumelt lays bare an uncomfortable truth: Most companies have strategies that are quixotic, muddled and undifferentiated. This is hardly surprising, since in recent years the very idea of "strategy" has been dumbed-down by a deluge of naïve advice and simplistic frameworks. Rumelt cuts through the clutter and reminds managers that the essence of strategy is a clear and differentiated point of view that supports forceful and coherent action. Drawing on a wealth of examples, Rumelt identifies the critical features that distinguish powerful strategies from wimpy ones-and offers a cache of advice on how to build a strategy that is actually worthy of the name. If you're certain your company is already poised to out-perform its rivals and out-run the future, don't buy this book. If, on the other hand, you have a sliver of doubt, pick it up pronto! (Gary Hamel, co-author of Competing for the Future)
Any executive reading this book will be motivated to examine the strategy of his or her firm, come to a judgment about it, and then work to develop or improve it. The many fascinating examples of good strategy provide great insight, but even more valuable are those of the `bad' variety. Rumelt writes with great verve and pulls no punches as he pinpoints such strategy "sins" as fluff, blue sky objectives, and not facing the problem. (James Roche, former Secretary of the Air Force and president of Electronic Sensors & Systems, Northrop Grumman.)
There are many books on strategy but none as good and thought-provoking as Richard Rumelt's Good Strategy/Bad Strategy. Building on solid academic foundations and using fascinating examples from business, politics and history, Rumelt exposes the many fallacies that surround this important concept while providing his own unique and refreshingly-clear approach on how to develop a coherent and successful strategy. This is a wonderful book, full of fresh ideas and practical advice, written in a clear and engaging way. It will change the way we teach and practice strategy. (Professor Costas Markides, Holder of the Robert P Bauman Chair in Strategic Leadership, London Business School)
The long-awaited magnum opus from 'strategy's strategist'See all Product description
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Richard Rumelt attempts and (I think) achieves this not only with a clear concept (what he calls the "kernel") but with very sound and thoroughly researched justifications. But he doesn't stop there.
For example, he shows the effect of varying the "diagnosis" (the first part of the kernel) and how that can radically change the strategy, with detailed analyses of real situations. This goes beyond the normal "statement of the bleeding obvious" (e.g. the success of Gerstner's transformation of IBM into a service organisation being the salvation of the company) into a detailed walk through of how other analysts' conventional wisdom got it wrong.
I'm not going to summarise the book (you can look at the contents and "Look Inside" features for that), but students of strategy will see familiar concepts here: current situation/challenge definition (the "diagnosis"), policy and coherent action plans. True, all of this and perhaps even more is covered in other works, by Porter and others. And of course outlining the bad helps throw the good into stark relief.
But what I think you'll find here is something I've not seen often enough in strategy writing. Beyond the relatively standard and proven methods like Porter's Five Forces (for which he gives full credit), and case studies, what you'll get here is a keen analysis that breaks things down to the common sense fundamentals. This analysis is backed up with solid research, across so many sectors, that you will probably find some parallels to your situation.
So, you don't just get why the IBM's transformation strategy worked, you'll get a critical analysis of their prior situation and all the other so-called leading opinions on the subject at the time, including how they missed the mark by forgetting some simple basics (in this case, knowing the unique strengths). All of this is backed up with good use of analogy, to help you absorb the key points rapidly.
Very usefully - and far more useful than templates - he provides some very simple methods to drill down on specifics. For example, he provides simple methods, with examples, that help you identify sources of power, how to accurately identify a company strategy's when even they don't know (the Crown Cork & Seal case study is very useful here), how to apply Porter's Five Forces model to critically assess a market, even if it is very new to you, and even how to win over hard-nosed cynics on the value of strategy.
I like also that he doesn't pull his punches. The tone is usually respectful and academic, but down to earth. However, he cannot resist a few swipes at poor strategy and, indeed, even individuals he has met and had disagreement with in the past. There is an almost "Office Space" like decrying of template strategy that is only a hair's breadth away from Ron Livingstone's railing against "listening to eight different bosses droning on about mission statements". But I can allow him this indulgence because it is always in the context of describing bad strategy.
He's also unafraid to tell it like it is: recounting his discussion with Steve Jobs shortly after his return to Apple, he reveals not the detail of the strategy that Jobs was later to devise, but the simplicity and confidence of Jobs' approach to strategy as being as much "waiting for the next big thing" as anything else. Some might think Jobs flippant, but Rumelt proceeds to articulate why waiting for the right time or confluence of events (riding the waves of change, as he puts it) can be so important to latching not just onto any strategy, but the right strategy.
He is also fairly expansive in collating and presenting other useful perspectives, such as the school of critical thinking, which whilst not strictly strategy, is nonetheless an essential tool.
On the downside, whilst the conversational nature of this book is likeable, it can be frustrating if you want to get to "the bit that deals with x, y or z". And there are no "templates" or tools to use: he is quite clear that this is often the route to bad strategy, substituting for clear analysis and critical thinking (indeed, I was left agreeing with him that templates are a blocker, not an aide). But I don't think that's how this book is meant to be used.
This is simultaneously a book for the beginner, as well as a book for the experienced practitioner. Whilst it does a consummate job of explaining the fundamentals is a compelling way, it also would be beneficial to those people who know how to do this, but maybe would benefit from a fresh perspective. I certainly found it refreshing to go back through some of my strategy work and see it anew, with perhaps more critical and a clearer understanding of its flaws.
I personally found this book far more valuable read cover-to-cover than as a book to dip into. As such, you might want to try this as an audiobook: I found this a very effective way to consume it, being very much like listening into a really good business radio programme on Radio 4 (or NPR, for our American cousins).