Good Strategy Bad Strategy

Welcome, Fellow Travelers

Todays Book

Good Strategy Bad Strategy
By Richard Rumelt

Summary Snapshot

Good Strategy Bad Strategy reveals why most organizations fail at strategy and how leaders can do better. Real strategy is not about buzzwords or vague goals but about diagnosing core challenges, setting guiding policies, and aligning coherent actions. By focusing on leverage points and making hard choices, a good strategy creates power, builds momentum, and delivers real results, while a bad strategy leaves teams scattered and progress stalled.

• Good Strategy Focuses on the Problem
  An effective strategy starts with identifying the critical challenge that stands between the current reality and the desired outcome. Without this diagnosis, goals remain unfocused and efforts scatter. By defining the core obstacle, leaders can concentrate energy where it matters most, ensuring that every action taken directly contributes to solving the real problem.

• Bad Strategy is Vague and Empty
  Bad strategy often hides behind slogans, buzzwords, or lofty statements that sound inspiring but lack substance. It avoids confronting obstacles and pretends that aspirations alone are enough. Without linking goals to practical steps, such strategies waste resources and confuse teams. Real strategy requires hard choices, clarity, and a path that connects vision to execution.

• Leverage Beats Raw Strength
  Success doesn’t come from doing everything; it comes from focusing resources where they’ll have the biggest impact. A good strategy identifies leverage points, critical areas where limited effort can create outsized results. By concentrating energy on these key points instead of spreading thin, organizations achieve powerful breakthroughs with fewer resources.

• Diagnosis is the Foundation
  The first step of the strategy is diagnosing the situation. This means cutting through complexity to define the true challenge. Without diagnosis, plans lack direction and unity. A clear diagnosis gives everyone a shared understanding of the problem and allows leadership to align resources and actions toward a common, meaningful solution.

• Guiding Policy Sets Direction
  After diagnosing the problem, the next step is defining a guiding policy. This policy provides an overall approach to solving the challenge. It doesn’t prescribe every detail but sets boundaries and priorities. With this framework, decisions become consistent, and people know how to act in alignment with the larger purpose.

• Coherent Actions Multiply Impact
  Scattered actions weaken strategy. A strong strategy aligns moves so they reinforce one another. Each step supports the guiding policy, creating a compounding effect. When actions are coherent, progress accelerates, and small wins add up. Without coherence, even strong ideas fizzle out because the pieces don’t work together toward the same end.

• Bad Strategy Ignores Obstacles
  One clear sign of bad strategy is pretending problems don’t exist. Leaders may set bold goals, but they often fail to identify the obstacles that stand in the way. This avoidance leaves organizations unprepared and teams frustrated when they encounter reality. A good strategy, in contrast, acknowledges barriers openly and builds specific plans to overcome them.

• Vision Alone is Not Strategy
  Ambitious visions can inspire, but they aren’t strategies by themselves. A vision without diagnosis and action is like a destination without a map. Good strategy ties vision to reality by outlining the problems, setting guiding principles, and executing coordinated actions. Without this bridge, vision remains just wishful thinking.

• Hard Choices Define Strategy
  A good strategy requires trade-offs, choosing what not to do. Leaders often fail because they want to please everyone or pursue every opportunity. This spreads energy too thin and dilutes progress. Making tough calls about priorities ensures resources flow where they matter most, creating focus, strength, and measurable results over time.

• Goals Are Not Strategy
  Ambitious targets are important, but not the same as strategy. Saying “we’ll double sales” without explaining how is meaningless. Strategy connects goals to realistic action. It considers constraints and opportunities, then defines how to move forward. Without this link, goals become empty promises that leave teams lost and ineffective.

• Leverage Points Drive Change
  Good strategy finds pressure points within a system where a small shift can create large effects. These leverage points allow limited resources to produce powerful outcomes. By identifying the key areas where effort will unlock momentum, leaders magnify their impact and move organizations further with fewer wasted actions.

• Surprise as a Strategic Tool
  Being smaller or weaker doesn’t mean losing. Surprise and asymmetry can outmaneuver larger players. By acting unexpectedly or innovating quickly, organizations can disrupt established competitors. Good strategy embraces creative positioning, turning disadvantages into opportunities. When applied wisely, the element of surprise shifts the balance of power dramatically.

• Blind Copying is Bad Strategy
  Copying another company’s playbook without context is dangerous. What worked in one situation may fail in another. Good strategy studies principles and adapts them to unique circumstances. Bad strategy imitates superficially, chasing trends without understanding deeper dynamics. Successful strategy comes from tailoring approaches to the specific challenge you face.

• Focus Creates Strength
  Trying to do everything weakens organizations. Strategy is about narrowing priorities and concentrating energy on the most critical issues. This focus allows teams to build momentum, avoid distractions, and achieve breakthroughs. Dilution leads to mediocrity, while focus channels resources into decisive actions that deliver meaningful progress and competitive advantage.

• Uncover Hidden Strengths
  A good strategy doesn’t just address weaknesses; it discovers overlooked strengths. These could be underused assets, unique skills, or untapped relationships. By recognizing and mobilizing hidden advantages, organizations find leverage that competitors miss. Often, success comes not from creating something new but from strategically redeploying what was already within reach.

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• All Talk, No Action is Bad Strategy
  Many leaders confuse communication with strategy. Inspiring speeches, slogans, and value statements may motivate briefly, but solve nothing if not linked to action. Real strategy is substance, not surface. It defines the challenge, sets a policy, and aligns actions. Without these, words remain empty and progress stalls quickly.

• Simplicity Builds Power
  Good strategy is rarely complicated. It cuts through noise and explains the challenge and response in clear, simple terms. Complexity often hides a lack of clarity. Simple strategies help everyone understand the goal and act in unison. Power grows when people can quickly grasp and align around the plan.

• Momentum Through Coherence
  When actions reinforce one another, they build momentum. Success in one area fuels progress in others, creating a virtuous cycle. Coherence makes progress feel natural and energizing, while scattered initiatives fizzle. Good strategy designs moves that fit together, ensuring that effort compounds and builds unstoppable forward motion over time.

• Wishful Thinking Weakens Strategy
  Plans built on unrealistic assumptions or ignoring resource limits are fragile. Bad strategy relies on hope rather than facts. A good strategy is grounded in reality, facing constraints honestly and finding creative ways to work within them. Realism, not fantasy, is the foundation of strategies that endure and succeed.

• Courage is Essential
  A good strategy demands courage to face challenges directly, make tough choices, and stick to priorities. Many leaders avoid this because it risks unpopularity. But avoiding reality weakens organizations. Courageous leadership addresses obstacles honestly, commits to a focused path, and inspires confidence by showing willingness to do the hard work.

• Adaptability Keeps Strategy Alive
  A good strategy is not rigid. Conditions change, and plans must evolve. Adaptive strategies provide a framework while allowing room to adjust as new information arises. Flexibility ensures strategies remain relevant and effective in shifting environments. Rigidity, by contrast, risks becoming outdated and ineffective when the world changes.

• Strategy is Action-Oriented
  Strategy is meaningless unless it leads to action. Too many plans remain theoretical, with impressive documents but no execution. A good strategy connects ideas to coordinated action, making vision practical. The measure of strategy is not how clever it sounds but whether it mobilizes people to achieve real results.

• Avoidance Creates Bad Strategy
  Leaders sometimes avoid making strategic decisions to escape accountability. They produce vague goals and endless discussions instead of concrete plans. This avoidance paralyzes organizations, leaving them directionless. A good strategy confronts choices directly, sets a course, and accepts responsibility for results. Avoidance only delays failure and wastes resources.

• Alignment Unifies Effort
  A strong strategy aligns the energy of the entire organization toward one critical objective. Alignment eliminates wasted work, prevents conflicts between departments, and creates synergy across teams. When everyone understands the diagnosis, guiding policy, and key actions, progress becomes coordinated, and the organization moves forward with shared purpose.

• See the System, Not Just Parts
  Strategy requires looking beyond surface issues to see the larger system at play. Problems often arise from patterns and interactions, not isolated events. By stepping back to see the whole picture, leaders can identify leverage points and anticipate ripple effects, creating strategies that address root causes, not symptoms.

• Execution Proves Strategy
  The test of a strategy is whether it works in practice. A plan that sounds brilliant but fails to deliver results is worthless. Execution reveals the strength of diagnosis, policy, and action. A good strategy proves itself by producing measurable progress, not just inspiring confidence on paper.

• Spreading Effort Too Thin is Weakness
  Trying to tackle too many priorities at once dilutes impact. Leaders often mistake activity for progress. Real progress comes from focusing on a few decisive moves that matter most. Concentrating resources creates breakthroughs, while spreading effort too widely leads to mediocrity, wasted energy, and frustrated teams that achieve little.

• Strategy is About Power
  At its core, strategy is about concentrating and creating power to overcome obstacles. Power doesn’t just come from resources but from focus, leverage, and coherent actions that multiply strength. An effective strategy transforms limited means into a decisive advantage, creating outcomes far greater than the sum of individual actions.

• Failure Offers Strategic Lessons
  Failure isn’t the end, but it’s valuable feedback. A good strategist studies setbacks to refine diagnosis, adjust policies, and sharpen actions. Each failure reveals what didn’t work and why. By learning from these signals, leaders avoid repeating mistakes and build stronger, more resilient strategies that improve over time.

• The Goal is Lasting Advantage
  The ultimate purpose of strategy is to create advantage. A good strategy provides clarity, focus, and leverage to produce results that competitors struggle to match. By consistently diagnosing challenges, aligning actions, and adapting intelligently, organizations build durable advantages that outlast short-term wins and establish a foundation for long-term success.

What’s Next?

Strategy is only powerful when it is clear, focused, and actionable. Diagnose real challenges, create guiding policies, and align coherent actions that reinforce one another. Avoid the traps of vague goals and empty slogans. Apply these principles consistently to build lasting advantages that drive meaningful, measurable progress in your work.