Good Strategy, Bad Strategy

About the book

Good Strategy, Bad Strategy examines how organizations describe their plans and why so many of those descriptions fail to guide decisions. Rumelt, a longtime strategy scholar, treats strategy as a structured problem-solving discipline. Sound strategy, in his account, rests on a diagnosis of the situation, a guiding policy for dealing with it, and a set of coherent actions that follow from that policy.

Much of the book works by contrast. Rumelt collects examples of what he calls bad strategy, including vague goals, fluff, and lists of desirable outcomes that never address obstacles. Against these he sets cases from business, military history, and public institutions where a clear diagnosis led to focused action. The argument amounts to a standard for judging whether a plan says anything specific about what to do and why.

The book also addresses how leaders reach strategic insight, treating it as a matter of noticing the crux of a problem and concentrating effort there. Rumelt writes as a critic of planning rituals and of the assumption that growth targets or mission statements constitute strategy.

How to read it

Read the early chapters on bad strategy first, since they establish the vocabulary the rest of the book relies on. The examples carry much of the argument, so pause on them and ask what diagnosis each one implies. Rumelt's prose is direct and occasionally blunt. The difficulty lies in applying his tests to a real situation.

The middle sections on sources of insight and on coherence reward slower reading. Some readers will want to skim the extended case material and return to it later. Keep a current plan or proposal nearby and test it against the diagnosis-policy-action structure as you go. The book offers judgment criteria, not templates to fill in.

Who it suits

Managers, founders, and analysts who write or review strategy documents will find a useful vocabulary for spotting vague goals and unfocused effort. Consultants and students of business policy get a critical counterweight to planning frameworks built around targets and mission statements. Readers interested in how organizations decide what to do will get the most from it.

Reading considerations

The examples lean heavily on well-known corporate and military cases, and some readers will find the treatment of failed strategies more persuasive than the prescriptions. The book is better at diagnosing weak strategy than at supplying a repeatable process for producing strong strategy.