Good Strategy / Bad Strategy

The Difference and Why It Matters

Richard Rumelt

Publisher: Profile, 2011, 322 pages

ISBN: 978-1-84668-480-7

Keywords: Strategy

Last modified: March 20, 2016, 10:28 p.m.

Developing and implementing a strategy is the central task of any leader, whether a CEO at a leading global company or head of a school. But there has been a growing and unfortunate tendency to equate buzz words, motivational slogans and financial goals with "strategy". Richard Rumelt debunks these elements of "bad strategy" and awakens an understanding of the power of "good strategy."

A good strategy is a specific and coherent response to the obstacles to progress. It works by harnessing and applying power where it will have the greatest effect, whether putting a man on the moon, fighting a war or launching a new product. Rumelt argues that the heart of good strategy is insight into the hidden power in a situation, and into an appropriate response and he shows how this insight can be cultivated.

Good Strategy/Bad Strategy draws on business, non-profit and military affairs to bring Rumelt"s original and pragmatic ideas to life. His fascinating examples range from Apple to General Motors; from the two Iraq wars to Afghanistan; from a small local market to Walmart and from Global Crossing to the 2007-08 financial crisis.

Demonstrating an astonishing grasp and deft integration of economics, finance, technology, history, and the brilliance and foibles of the human character, Good Strategy/Bad Strategy is the culmination of Rumelt"s decades of striving beyond the superficial to address hard questions with honesty, clarity and integrity.

  • Introduction: Overwhelming Obstacles
  • Part I: Good and Bad Strategy
    1. Good Strategy is Unexpected
      • How Steve Jobs saved Apple
      • Business 101 is surprising
      • General Schwarzkopf's strategy in Desert Storm
      • Why "Plan A" remains a surprise
    2. Discovering Power
      • David and Goliath is a basic strategy story
      • Discovering Wal-Mart's secret
      • Marshall and Roche's strategy for competing with the Soviet Union
    3. Bad Strategy
      • Is U.S. national security strategy just slogans?
      • How to recognize fluff
      • Why not facing the problem creates bad strategy
      • Chad Logan's 20/20 plan mistakes goals for strategy
      • What's wrong with a dog's dinner of objectives?
      • How blue-sky objectives miss the mark
    4. Why So Much Bad Strategy?
      • Strategy involves choice, and DEC's managers can't choose
      • The path from charisma to transformational leadership to fill-in-the-blanks template-style strategy
      • New Thought from Emerson to today and how it makes strategy seem superfluous
    5. The Kernel of Good Strategy
      • The mixture of argument and action lying behind any good strategy
      • Diagnosing Starbucks, K-12 schools, the Soviet challenge, and IBM
      • Guiding policies at Wells Fargo, IBM, and Stephanie's market
      • The president of the European Business Group hesitates to act
      • Incoherent action at Ford
      • Centralization, decentralization, and Roosevelt's strategy in WWII
  • Part II: Sources of Power
    1. Using Leverage
      • Anticipation by Toyota and insurgents in Iraq
      • How Pierre Wack anticipated the oil crisis and oil prices
      • Pivot points at 7-Eleven and the Brandenburg Gate
      • Harold Williams uses concentration to make the Getty a world presence in art
    2. Proximate Objectives
      • Why Kennedy's goal of landing on the moon was a proximate and strategic objective
      • Phyllis Buwalda resolves the ambiguity about the surface of the moon
      • A regional business school generates proximate objectives
      • A helicopter pilot explains hierarchies of skills
      • Why what is proximate for one organization is distant for another
    3. Chain-Link Systems
      • Challenger's O-ring and chain-link systems
      • Stuck systems at GM and underdeveloped countries
      • Marco Tinelli explains how to get a chain-link system unstuck
      • IKEA shows how excellence is the flip side of being stuck
    4. Using Design
      • Hannibal defeats the Roman army in 216 B.C. using anticipation and a coordinated design of action in time and space
      • How a design-type strategy is like a BMW
      • Designing the Voyager spacecraft at JPL
      • The trade-off between resources and tight configuration
      • How success leads to potent resources that, in turn, induce laxity and decline
      • Design shows itself as order imposed on chaos-the example of Paccar's heavy-truck business
    5. Focus
      • A class struggles to identify Crown Cork & Seal's strategy
      • Working back from policies to strategy
      • The particular pattern of policy and segmentation called "focus"
      • Why the strategy worked
    6. Growth
      • The all-out pursuit of size almost sinks Crown
      • A noxious adviser at Telecom Italia
      • Healthy growth
    7. Using Advantage
      • Advantage in Afghanistan and in business
      • Stewart and Lynda Resnick serial entrepreneurship
      • What makes a business "interesting"
      • The puzzle of the silver machine
      • Why you cannot get richer by simply owning a competitive advantage
      • What bricklaying teaches us about deepening advantage
      • Broadening the Disney brand
      • The red tide of pomegranate juice
      • Oil fields, isolating mechanisms, and being a moving target
    8. Using Dynamics
      • Capturing the high ground by riding a wave of change
      • Jean-Bernard Lévy opens my eyes to tectonic shifts
      • The microprocessor changes everything
      • Why software is king and the rise of Cisco Systems
      • How Cisco rode three interlinked waves of change
      • Guideposts to strategy in transitions
      • Attractor states and the future of the New York Times
    9. Inertia and Entropy
      • The smothering effect of obsolete routine at Continental Airlines
      • Inertia at AT&T and the process of renewal
      • Inertia by proxy at PSFS and the DSL business
      • Applying hump charts to reveal entropy at Denton's
      • Entropy at GM
    10. Putting it Together
      • Nvidia jumps from nowhere to dominance by riding a wave of change using a design-type strategy
      • How a game called Quake derailed the expected march of 3-D graphics
      • Nvidia's first product fails, and it devises a new strategy
      • How a faster release cycle made a difference
      • Why a powerful buyer like Dell can sometimes be an advantage
      • Intel fails twice in 3-D graphics and SGI goes bankrupt
  • Part III: Thinking Like a Strategist
    1. The Science of Strategy
      • Hughes engineers start to guess at strategies
      • Deduction is enough only if you already know everything worth knowing
      • Galileo heresy trial triggers the Enlightenment
      • Plypotheses, anomalies, and Italian espresso bars
      • Why Americans drank weak coffee
      • Howard Schultz as a scientist
      • Learning and vertical integration
    2. Using Your Head
      • A baffling comment is resolved fifteen years later
      • Frederick Taylor tells Andrew Carnegie to make a list
      • Being "strategic" largely means being less myopic than your undeliberative self
      • TiVo and quick closure
      • Thinking about thinking
      • Using mind tools: the kernel, problem-solution, create-destroy, and the panel of experts
    3. Keeping Your Head
      • Can one be independent without being eccentric, doubting without being a curmudgeon?
      • Global Crossing builds a transatlantic cable
      • Build it for $1.5 and sell it for $8
      • The worst industry structure imaginable
      • Kurt Gödel and stock prices
      • Why the 2008 financial crisis was almost certain to occur
      • The parallels among 2008, the Johnstown Flood, the Hindenburg, the Hurricane Katrina aftermath, and the gulf oil spill
      • How the inside view and social herding blinded people to the coming financial storm
      • The common cause of the panics and depressions of 1819, 1837, 1873, 1893, and 2008


Good Strategy / Bad Strategy

Reviewed by Roland Buresund

Mediocre **** (4 out of 10)

Last modified: March 20, 2016, 10:18 p.m.

A book with mixed reviews from other sources. I started reading it with a positive overview and encouraged by the ToC and the synopsis. Unfortunately, the case studies the author starts with (Apple and the first Gulf War) are so badly presented that his conclusions can't be taken serious. He continues by mixed wild conclusions with valid theory and some common sense.

It is not a complete waste of time reading this, but there are a lot of other, and much better, books on the market.


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