There are two types of organizations that struggle to be successful in the long term. According to Richard P Rumelt’s book “Good Strategy Bad.”
The first type has an advantage because they know what their winning game plan looks like. It keeps them energized on how they can win the next quarter or a year. While struggling companies may experience burnout over time through lacklustre strategies.
Due not only to poor leadership but also confusion about one anothers’ goals preventing cohesive movements forward together at all times. The following are lessons from Good Strategy, Bad Strategy by Richard P. Rumelt.
1. The essence of strategy is choice.
According to Rumelt, a strategy has three parts: choosing what not to do is as important as choosing what to do.
This may seem counterintuitive at first glance, but think about it, if you know what you can ignore throughout your quest for success, then you make your journey less complicated.
For example, if you want to run a marathon, the goal is to win, not run it in under two hours. By choosing what not to do, runners can make their journey simpler because they must focus on speed and endurance to succeed. If a runner decides to forget about strength training or distance running, their chances of winning are slim.
2. Strategy is about winning, not making plans or doing research or analysis.
Rumelt explains that strategy means picking goals. The one who sets the most appropriate goals will win because of their focus on a result rather than spending time with analysis paralysis, allowing themselves to be distracted by too many options available for consideration.
So, the person with the most accurate plan for success will always beat out competitors who are busy playing politics at work or focusing on their perfect single-page plan instead of starting it and seeing how their strategies take shape later on.
3. The essence of strategy is leverage, not strength.
According to Rumelt, if you have a pointy rock in your hand, it is just a rock, but if you have an effective strategy in your hands, then it is leverage.
Strategy doesn’t rely on size, strength, or resources to be successful because creativity can triumph over fate or bad luck any day of the week. We can create a better future by using our resources and rejecting box-thinking.
4. Strategy is paradoxical because effective strategic planning requires thinking both offensively and defensively at once.
By thinking strategically, you must be willing to take on risks that might not necessarily pay off in the short term but will make an impact long-term if executed successfully.
We can’t always think about what other teams are doing because we could get caught up in their momentum and lose focus, or we can work together to create innovative strategies that will push everyone forward if executed successfully.
5. The enemy is the status quo, not other people.
Rumelt says that often we blame our competition for our problems because we can see them. Still, it is a smokescreen that hides poorly defined strategies from being executed successfully.
To avoid this, organizations must regularly communicate their goals and progress towards them. So everyone involved has a clear picture of what is working well and opportunities for improvement.
6. The goal of strategy is to win, not prove you are right.
Rumelt says that too often, people use arguments to show how much they know rather than using them to actually solve problems or come up with new solutions/ideas together towards winning.
So, even if the argument won, the outcome is a loss because you made no effort towards victory.
7. Strategy requires deep, accurate understanding of the forces at play in the situation and the power to influence them.
Rumelt explains that strategy is not just about planning and attacking your opponent’s weaknesses. Instead, it should also include studying and influencing factors within yourself and your environment to make you a better team.
To be successful, one must have a deep understanding of all the factors at play and know how to influence them to create a positive outcome for everyone involved.
8. Strategy is not about choosing some abstract good like creativity or growth but rather what your competitor fears.
According to Rumelt, he who can make their competitor fear the worst will win because of their advantage over them.
It is important to know your competition and what drives them, not just as a thought exercise but also as a way of influencing their fears and creating more opportunities for yourself.
9. Strategy is about making choices, trade-offs, and winning the battle that you are fighting.
Using examples from wars and business strategies, Rumelt explains that even if a plan is perfect, it will not work. Rather, there must be an element of flexibility for strategy to succeed because this allows us to do what we need to do without overcommitting ourselves or becoming too narrow-minded.
It is important to keep the big picture in mind while also having a plan of action to adjust as new challenges are presented. Of course, sometimes what you think will work doesn’t always pan out, but that shouldn’t deter you from trying something else if needed.
10. A good strategy has an anchor, in reality, not just theory.
Rumelt discusses the importance of using facts and data to create a strategy that will be successful in reality rather than one that sounds good on paper but won’t work out when it is time to implement.
For teams to succeed, they must have a plan that makes sense from all angles and has been tested in various situations before being implemented.
11. A strategy makes a major contribution when it changes what people believe is possible.
In business, sports, and other competitive environments, there are so many things that could happen. Still, often we don’t see them because we have already written off the possibilities without even trying them out for ourselves in different situations.
To win an argument, have a better idea, or just generally see the possibilities, you need to understand that there are events that might not seem likely, but could happen and therefore should be prepared for and tested out before they happen.
12. Strategy is about making a coherent plan for the employment of capabilities.
Rumelt also points out that a strategy is not just about having one tool or skill but rather about knowing how to use all of the resources at your disposal.
Just because you have one great idea/skill/idea does not mean it will guarantee victory. Instead, what matters is being able to put everything together in a cohesive manner that works.
13. A strategy is about winning an uncertain future, not just the current set of circumstances.
When it comes to creating a strategy it’s important to see what you want for your life and business long-term, not just focusing on the moment or present situation because no one can predict what will happen in the future.
So, it is important to think and plan for that long-term goal, yet sometimes you might not see the fruits of your labour until much later.
Conclusion
The book, Good Strategy Bad Strategy by Richard Rumelt is a must-read for anyone who wants to get better at strategic thinking. In the nine key lessons he shares in this book, you’ll learn how to shape your future and create strategies that are resilient against uncertainty.
You’ll also find practical advice on crafting coherent stories that link ends, ways, and means together with examples from companies like Apple or Netflix. This one’s worth reading cover to cover—and may even change what you think about strategy forever!