Distinguishing good strategy from fluff

We have become so accustomed to strategy as exhortation that we hardly blink an eye when a leader spouts slogans and announced high-sounding goals, calling the mixture a “strategy”, according to Richard Rumelt in his book Good Strategy/Bad Strategy: the Difference and Why it Matters. A mere exhortation is a very poor strategy; a good strategy is something which honestly acknowledges the challenges being faced and provides an approach to overcoming them.

A good strategy has a kernel consisting of three elements: a diagnosis of the problems being faced, a guiding policy for dealing with the obstacles identified in the diagnosis, and coherent actions designed to carry out the guiding policy. Bad strategy often consists of goal-setting without solving any problems or creating a method of achieving the goals other than by exhorting people to try harder.

In chapter 4 the author makes it plain that he is not an enthusiast when it comes to the “softer” aspects of leadership such as vision, charisma and motivational techniques. The New Thought movement and the idea that thinking positive thoughts can create success are particularly criticised. In my view the criticisms are valid but overstated; an organisation can be vastly more productive if its leaders create an environment in which employees are happy and motivated.

The book is filled with interesting anecdotes about strategy, including numerous stories about clients to whom the author gave strategy advice. The most common outcome seems to be that the client rejected the advice and went on to suffer for it. I was left with the impression that the author is able to offer considerable insight into an organisation’s strategy, but the long-term viability of your business is better served by arranging for the author to provide advice to your competitors.

I thoroughly enjoyed the book. I found the author’s arguments about the prevalence of bad strategy highly persuasive, and I strongly recommend that any business or organisational leader thinking of undertaking another round of strategic planning read this book first.

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