Good strategy bad strategy: the difference and why it matters/ Richard P. Rumelt

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2011 publication.

Richard Rumelt writes about strategy like how Stephen Ambrose conveys American military history. He names the organisations involved (though not shaming individuals). In a literary sense, I thought he rips those organisations with poorly articulated strategies a new proverbial hole behind.

Enough real-world cases to make his points extremely compelling (of good and bad strategy): CISCO; Starbucks, Nvidia; IBM; Ford; TiVo. Not just well-known names but also relatively unheard of individuals.

P2. That strategy is not to be equated with ambition, “vision”, planning, or economic logic of competition.

Sums up leadership’s role in strategy formulation: P2 “a leader’s most important responsibility is to identify the biggest challenges to forward progress and devising a coherent approach to overcoming them”.

P4/5 a good strategy is more than just urging people forward towards a goal or vision. It is about honestly acknowledge the challenges/ problems, provides an approach to overcoming them. Then coordinating efforts in implementing that approach.

Says that good strategy is the exception and not the rule. And is a growing problem.

P6 (what is strategy?) A coherent set of analysis, concepts, policies, arguments and actions to a problem/ challenge.

There is an articulation and framing (involving perspectives) of a problem, expressed as a diagnosis. Then setting guidelines as a way to determine choice (its important to choose; choice implies having to decide on a limited scope). Then a set of specific and ‘coherent’ plans.

P7 strategy involves specifying action on how to resolve a challenge/ problem. a leader can set goals and leave others to achieve it. But that’s not strategy; that’s goal setting.

P7 “kernel” of a strategy contains three elements:
– a diagnosis (defines/ explains the nature of the challenge)
– a guiding policy (an overall approach that is *chosen* to cope or overcome the obstacles identified in the diagnosis)
– coherent action (to carry out the guiding policies; coordinated steps that work with one another rather than in isolation of activities)
Also P77

The guiding policies are signs posts to guide the direction but leaves out details; the coherent action have “feasible coordinated policies”, resource commitments and actions made to carry out the guiding policies.

P8 “a bad strategy tries to cover all the bases rather than focus resources and actions”. Stating multiple goals and initiatives (that seem like progress), but that has no coherent approach, is not strategy.

On Apple; 1991 Gulf War

How executives he once interviewed all tend to say that the competition succeeded because they could react fast and and correctly (not necessarily the first). But when asked of their strategy it was merely a laundry list of initiatives and nothing about being able to identify new opportunities and being able to act fast in response.

David & Goliath analogy of “insights”; Walmart’s success as not on breaking conventional wisdom of the sustainability of a discount store’s customer base but on what is a “store” (the network was the store).

P31 that “insight”. It’s not about doing more. It’s about doing what is purposeful in dealing with a problem.

P32 bad strategy has: fluff, failure to address the challenge, mistakes goals for strategy, bad strategic objectives (I.e. do not address problems or are impractical).

P36 “bad strategy is long on goals and short on policy or action.”

P55 explains why the “strategy” adopted by the Los Angeles Unified School District was ‘bad’.

P58/59 why there is so much bad strategy. Suggests that one issue is that leaders are not willing to choose or make tough internal decisions; formulating strategies by completing templates; “new age” visioning that is pseudo-science.

Strategy involves making choices; focus on some goals and setting aside others. “When this hard work is not done, weak amorphous strategy is the result.”

P64 “universal buy-in usually signals the absence of choice”.

P65 reliance on a “transformational/ charismatic leader”, where a leader develops a vision, inspires people to sacrifice or make change, and then empower people. Author argues that leadership is not the same thing as strategy. A good leader helps people cope better with change. But strategy is figuring out what is worth changing and is worth pursuing.

P67 cites Ghandi has both possessing charismatic leadership and at the same time, implements good strategy (diagnosis, guiding policies, coherent actions).

P68- 70. He rips apart the stated mission, vision and strategies of some real world organisations.

P71 – 74 on “new thought” leadership; evolving from religious doctrines, then to quasi-science (he includes ‘positive thinking’ in this category) and eventually espoused as management concepts.

P85 the heart in a strategy is the organisation (competitive) advantage. ‘Advantage’ acts as the lever/ multiplier.

P94 on when to have high degree of coordination: When gains are very large; coordination and high degree of coupling has high costs.


P108 using proximate objectives to deal with ambiguity; cites 1960s moon landing where designers of the lunar lander had no clue of the moons surface. One director made her best guess and told the engineers what it would look like, and they were able to get to work. It was an educated guess, called for by circumstances.

P111 “take a strong point and create options”

P117 being able to identify “limiting factors” and those that can or cannot be fixed. E.g. Noise from a high way will always affect property prices, no matter how nice the home.

P125 fascinating story of Hannibal defeating the Romans; cites Hannibal as the father of strategy.

P127 strategy in its purest form: premeditation, anticipation of others’ behaviour, purposeful design.

P129 on Hannibal’s strategy akin to a design of the battlefield. Likens strategy formulation as a process as much as a design.

P142-150 chapter 10; on Focus as a straetgy; walks through how he conducted an MBA class using Crown Cork & Steel as a case study to investigate and discover its strategy. The company supplied cans for beer companies. In such an industry beer-can manufacturers are “captive producers” to the beer company (the large scale can suppliers were beholden to the demands of the beer company). CCS was able to change the rules of the industry by being a supplier of much smaller runs for smaller beer companies and was able to negotiate better deals since it had more clout. CCS wasn’t the largest manufacturer but it was the more profitable and had highest ROE.

P156/ 159 on mergers and acquisitions as a “strategy” fir growth; growth of a business is not something that can be engineered. It’s a reward for successful innovation, cleverness, efficiency, creativity.

P169 increasing value of a business requires a strategy for at least one of these fronts: deepening advantages; broadening the extent of the advantages; creating higher demand for advantaged products; strengthening the isolating mechanisms that block easy imitation by competition.

P243 strategy can be likened to science; a set of hypotheses that is refined and aimed to be proven.

Strategic thinking: a nine step approach to strategy for marketeers and managers / Simon Wootten & Terry Horne

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Suggests that one can think strategically if one can think through these 9 steps (involving a combination of thinking, communication, and planning skills):
1. Gather strategic intelligence
2. Make strategic assessment
3. Create strategic knowledge
4. Make strategic predictions
5. Develop strategic vision
6. Create strategic options
7. Take the strategic decisions
8. Create and communicate the market-led strategy
9. Plan and manage projects to implement the changes

Steps 1-3 are to “escape from the past/ create usable knowledge”. Steps 4-6 are to “focus on the present/ Direct present action”. Steps 7-9 are to “invent the future/ improve future performance”.

Cites Charan: strategic thinking involves thinking for yourself as yourself, and as another. Involves thinking clearly and expressing clearly what you think.

That strategic leaders need not necessarily be found at the top of the organization. Leaders have to be prepared to listen.

“Questioning and thinking will feed your thinking… Once you understand, you will need to communicate your understanding.”

Key to comms: 20 minutes max (attention span), 3 things (images, stories, facts etc to reinforce those 3 points).

Comms is one thing; getting ppl to be motivated to move in the same direction is key.

Motivation comes from belief. Belief is based on 2 components: a thought plus a feeling. Left & right brain (I.e. idea with an optimistic emotional image that listener can identify).

Direction of the comms is from the past (story or an experience), via the present (idea or opinion), towards the future (plan or action). Quantify the risk of being wrong; there is always a chance of being wrong. Thinking of the future also requires an imagination of what the future might be; supported by critical thinking to decide if the idea is desirable or feasible.

Five basic thinking skills: memory (use aids; take notes), imagination, empathy and emotion (feeling), numeracy, verbalise (talk it out, think aloud).

That prediction can be aided by talking to experts/ older people, younger/ would-be consumers, broad general knowledge (“luck favours the prepared mind”).

Ethical thinking, use morality as a guide. Quotes Abraham Lincoln: “when I do good things, I feel good. When I do bad things, I feel bad. That is my religion.”

(List of questions that critical thinkers ask)

16 stages for thinking about complex & turbulent situations (see
Horne & Doherty, 2003)


1. Strategic Intelligence – What’s changing out there: TEMPLES

2. Strategic Assessment – Considerations for a self-assessment:
money, management, mental muscle
Morales, mores, market reputation
Materials, movement, machines

3. Strategic knowledge = strategic intelligence + strategic assessment

Strategic Predictions: scenario planning; change nothing (assess impact of this on customers, competition, finance etc); worse case scenario.

4. Strategic Vision. Consider CATSWORLD in developing a strategic vision:
customers, actors, transformation, sub systems, “way we do things here”, owners, resources, limitations/ legal, decisions (how they are made).
Create a optimistic view of the future; determine a hopeful strategic direction; set motivating markers, milestones, review points.
Keywords: optimism, positive future, possibilities.

5. Strategic Options:
identify obstacles, worse fears, worse case scenarios, also best hope. Then identify how those may be removed/ reduced; or how obstacles may be removed to get to “best hope” case.

6. Apply creativity in identifying options (this is where ethics come into play). Suggests speaking to individuals in addition to brainstorming.

7. Strategic decisions. Talks about checklist of areas to consider, aided by intuition.

8. Create & comms the market-led strategy:
A sample of the executive summary provided (which is based on the earlier steps). Talks about how to present.

9. Plan & manage projects to implement the changes.
Managing resistance (suggest at least 70% will resist to some extent). Considerations: has anyone else done this? What is the picture at the end? Who will keep selling the benefits of change? Whose decisions will be crucial? Who owns the change? Who are the main stakeholders of the change?

Resistance to change; sometimes disguised as supportive suggestions., e.g, form working committees.

On project management.

A chart showing a flow diagram. Assessing staff. Delegate to those with high abilities & high motivation. Encourage/ sell/ praise those with high abilities but low motivation. Tell/ direct those with low ability but high motivation. Train those who are low in abilities and motivation.

List of reading references relating to strategic thinking and leadership.

The genius machine: the eleven steps that turns raw ideas into brilliance/ Gary Sindell

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The book stops short of being prescriptive. Ends with a statement that “the world is full of brilliant ideas left or undeveloped noble causes abandoned. To make a difference in the world ultimately requires understanding how to be an advocate for your ideas or causes”.

In short, the author seems to suggest we must advocate and steadfastly refine what we propose. If not, no one will.

Endleofon (old English for ‘eleven’) system.

Stating what we are trying to do. Being able to state the real root reasons (e.g. May not be to stop talent outflow per se, but root causes why people are leaving).

Define time constraints, be able to define what success looks like in a number of time frames.

“creative thought is looking at what everyone is looking at, or has looked at for years, and seeing something new”

“until we’ve discovered the cause, it will be premature to imagine possible solutions”.

“genius thinkers know who they are and what they are driven to contribute”

Know what we stand for.

(what’s my identity? I am a creator who enjoys the process of discovery and connection. I can create by making things or help others create connections)

“a genius thinker knows nothing exists in a vacuum”

Test ideas. But at this stage, find “advocative early responder” rather than critics, naysayers or devil’s advocates. This stage requires people who can help find distinctions in the idea.

Test the idea. Model it. Test for flaws; against original intent. Record “advocacy hooks”, I.e. instances of significance/ success.

Avoid metaphors. Suggests metaphors trap people into thinking it adequately describes the problem and hence solution. Example: if saying we are in the middle of a game and we need to substitute the led player (CEO) but in reality a CEO cannot be replaced just like that.

Recognizing that we may not have a truly original idea, and verifying that assumption. But not let fear of not sounding original hold us back. acknowledge if we are building on other original ideas.

To avoid the trap of thinking we have the best idea, find out the few doing the best work and compare against them (sounds like benchmarking).

Does it benefit more than its primary intended users?

Can the idea/ product stand on its own?

“the Alexandria test” (know your product well enough to teach, others from the ground up)

Ease the learning curve; make it easier for the user.

The responsibility of the core communication lies with the creators.

Concept of “advocacy hooks”; statements of ideas that resonate. Document them, review.

11 Questions (my paraphrasing)
– how is pdt different/ distinct?
– what is the identity? Why are the ideas important?
– where do the ideas lead to? What can be imagined at the end?
– what are my blind spots? What is missing? (test)
– what has preceded us?
– who needs this most?
– what are the underlying principles/ values? Can I make them coherent?
– is it complete enough so that i or others can propagate the idea/ means?
– am I connecting with the audience?
– what if I succeed? How/ where do the identities of the makers, the users, and the product meet?
– am I advocating my own ideas? Am I walking the talk?

Relational intelligence: how leaders can expand their influence through a new way of being smart/ Steve Saccone

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It’s published by a Christian press, so the book tends to be interspersed with Christian beliefs. Though the principles are really universal, in my view. However, as a non-Christian I found the anecdotes and repeated religious references a bit distracting.

Relational Intelligence Quotient – test at


The Michael Scott Syndrome (one office manager in “the office” tv comedy).

Treat and value relationships not as a disposable commodity but (as I understand it) with decency.

Treating others with quality will bring about quantities of influence. not about abandoning quantity, but looking at quality with quantity.

Lack of self-awareness is an obstacle to RI (suggests honesty, vulnerability and courage as parts of the cure).

Habit 1: “accessing the perceptions of those around us”. Ask people you trust (though not not always those whom agree with you) how they view us.

Habit 2: “activate the reflective mind within you”. Review. Make right (e.g. Could be offering an apology to make amends”. May cost time, effort and personal pain but will result in less time, effort and pain later.

Habit 3: “write clarifying statements”. Express with honesty and vulnerability. Be self-aware.

Some examples:
“I struggle with becoming easily envious of others’ accomplishments, so I get uncertain about my ability to succeed with other people in my field — even friends — have success.”

“I get easily insecure about my sense of self-worth, so that when not enough attention is on me from my supervisor or co-workers, I feel devalued and internally

A practical guide to mentoring: How to help others achieve their goals/ David Kay and Roger Hinds

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A Practical Guide to Mentoring: How to Help Others Achieve Their Goals
ISBN: 9781845283704

A “how to” book, with instructive and concise guidelines and principles. In some cases, steps are given (e.g. How to plan the meetings).

– nature and scope of mentoring (mentor should be an independent source of help; should not be a supervisor)
– helping people to progress (understanding the mentee’s needs and expectations)
– mentoring approach; who can do it (provides a definition of mentoring; basic rules, pre-requisites for being a mentor)
– matching mentors and mentees (factors to consider)
– preparing for the mentoring role (clarifying objectives, obtain background info, what to do at first meeting)
– on establishing the mentoring relationship (set boundaries, contact strategies, matching mentor/ mentee learning styles)
– on the mentoring process (planning mentoring meetings, logistics, dealing with issues)
– ending the mentoring relationship (planning the exit strategy, recognising when the relationship is not working, setting an end date)
– benefits and pitfalls (of mentoring process)
– getting started
– mentoring scenarios (examples and suggestions of dealing with the issues)

Corporate agility: A revolutionary new model for competing in a flat world/ Charles Grantham, James P. Ware & Cory Williamson

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Corporate Agility: A Revolutionary New Model for Competing in a Flat World
ISBN: 0814409113
Ebook version | NLBsearchplus

Population trends
Disintermediation via technology (world is flat; )
The new workforce: five sweeping trends that will shape your company’s future/ harriet hankin (longevity, more varied households, generations – boomers and Echoes and Nexters), diversity, and “trust, respect and ethics”: seeking higher purpose in the workplace
From decentralised to mobile

P 241, 245. Table – corporate agility.
Corporate agility.
P22 diagram

103. Difference in next gen. (as customers, as library-workers)

P104. case study: Herman Miller

129/ 130. History of work.

Communication & new media. From shared typing pool to telephone to shared computers to mobile devices to email to social media sites (?)

113/135 IBM On Demand Workplace.
119, 201.
P205 workplace design.
P73. Costs/ energy efficiency

P241. Concept of Time has changed.

Work goes mobile: Nokia’s lessons from the leading edge/ Michael Lattanzi, Antti Korhonen & Vishy Gopalakrishnan

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“I don’t believe you.” Stunned silence followed this comment, made by the CIO in a conference room at Nokia’s headquarters in Espoo, Finland. “We are Nokia, the mobility company. Yet you tell me that connecting people is not something we can do internally, even though we tell millions of people every day that we can and do?”
P4. “An Unhappy CIO”

Work Goes Mobile: Nokia's Lessons from the Leading Edge
ISBN: 9780470027523

Reading this opening paragraph already suggested to me this was no run-of-the-mill book that merely theorises and presents motherhood statements of how an organisation can ‘mobilise’ its business.

Useful book for any organisation considering implementing a “mobile workplace”.

A case study — descriptions of methods, approach, struggles and insights — of Nokia’s experience in implementing a mobile work culture (years 2001 – 2005). Doesn’t paint an overly romantic picture of going mobile. Early on in the book the authors were quick to point out the difficulties and issues in implementing a mobile workplace. Even Nokia employees were initially skeptics about the idea of conducting business in a “mobile” way.

Their message is that “business mobility” will work (Nokia is proof), if certain aspects are addressed: social/ culture, technology, business processes, people management, security, facilities, IT architecture, applications and tools, information systems. (P19.)

What I like is how the book addresses the social/ human aspects of work and of dealing with change.

P xi. “the authors emphasize Nokia’s most successful approach to achieving this vision began by understanding user needs and by examining business processes.”

The content pages would give readers an overview of what else should be considered, other than technology alone. The specific examples of how things are done, drawn from Nokia’s actual implementation, provides credibility.

I think those who have experienced some form of “working mobile” would find some of the concepts and principles self-evident. But I think therein lies the fallacy. What is self-evident tends to be upon hindsight. This book would be a useful reference at the planning stages.

p15. How mobility changes business.
– the way we work (e.g. From spending hours at work to keeping business running efficiently; increased reliance on collaborative infrastructures)
– the way we value work (e.g. Shift from place of work to knowledge of the worker)
– the way we manage work (less direct supervision; greater need for work objectives to be articulated; increased emphasis on trust)

P19. “not just a matter of providing a handheld device”. Components of a mobilized business: info Systems, Ppl mgt, business processes, security, facilities, IT architecture, applications and tools.

P25. Why many Nokia employees were skeptical of the concept of mobility: “the underlying issue was change. Generally people resist change because of the perception that it requires extra effort, that it is difficult, or that they have to unlearned a familiar or comfortable way of doing things. This perception makes the greatest challenge associated with mobility.”

P35. Intro of mobility creates short-term instability, bec it reveals more inadequacies (systs, process, ppl)/ ripple effect. e.g. sales ppl asking for devices to receive customer info on the fly. then discovered customer info was not regularly kept up to date. More changes needed.

P145. Social aspects of mobility. “If you are serious about mobilizing your business, start looking now for ways to remotely create the social interaction that occurs naturally in a corporate office.”

P146. “going mobile does not reduce the need for social interaction”

“if businesses do not establish and maintain a balance between work and personal life, their workers will — possibly in ways that are not mutually beneficial.”

– taking into account cultural and regional differences.
– “privacy must be ensured before adoption increases”

Guard against too much isolation and independence. P148. “if some mobile workers seem to have forgotten this, they may need a gentle reminder to come to their corporate office occasionally to maintain that connection.”

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