The Perils of Bad Strategy

Extracted 29JUN2011 from at

Bad strategy abounds, says UCLA management professor Richard Rumelt. Senior executives who can spot it stand a much better chance of creating good strategies. [p. 1]

Bad strategy ignores the power of choice and focus, trying instead to accommodate a multitude of conflicting demands and interests... I have condensed my list of its key hallmarks to four points: [p. 2]

  • the failure to face the challenge
  • mistaking goals for strategy
  • bad strategic objectives
  • fluff

Bad strategy has many roots, but I’ll focus on two here: the inability to choose and template-style planning—filling in the blanks with “vision, mission, values, strategies.” [p. 6]

The kernel of good strategy [p. 9]...

  1. A diagnosis: an explanation of the nature of the challenge. A good diagnosis simplifies the often overwhelming complexity of reality by identifying certain aspects of the situation as being the critical ones.
  2. A guiding policy: an overall approach chosen to cope with or overcome the obstacles identified in the diagnosis.
  3. Coherent actions: steps that are coordinated with one another to support the accomplishment of the guiding policy.

Despite the roar of voices equating strategy with ambition, leadership, vision, or planning, strategy is none of these. Rather, it is coherent action backed by an argument. And the core of the strategist’s work is always the same: discover the crucial factors in a situation and design a way to coordinate and focus actions to deal with them. [p. 10]