Book Review: Good Strategy Bad Strategy
Author: Richard Rumelt
Strategy Consultant and Business School Professor
UCLA Anderson School of Business
Why you should read this book: This book demystifies strategy.
For example, just setting an ambitious goal is not a strategy.
This simple truth explained my confusion listening to leaders present their “strategies” over the years.
Without a plan, a goal stands alone and is likely unattainable.
A good strategy thinks through a plan to achieve that goal and gives a motivation for pursuing that goal.
The author, Richard Rumelt, illustrates this and many other points with real stories presented in quick, easily consumable chunks.
The 7 page story about Howard Schultz and the origin story of Starbucks was so well written that I shared it with my 15 year old. She said she’d never think about Starbucks the same again. Now that’s approachable writing.
(I love the iterative and discovery oriented approach that Schultz used to morph his original Italian themed cafe into what is now the Starbucks we know.)
To Rumelt, real strategy is flexible, not rigid. He calls strategy a hypothesis that needs testing, testing, testing. The parallels to Product Discovery come through again and again in this book.
The author structures a good strategy with:
a diagnosis (akin to a “problem”)
a guiding policy (a “solution”)
coherent action (a series of “steps to achieve the solution”)
A bad strategy lacks one or more of those items. A bad strategy is often just “positive thinking.” A bad strategy has a lack of focus and tries to please everyone. A bad strategy is full of “fluff” (a Rumelt formal term). Bad strategy just sets goals or makes a simple statement of direction for the company and stops there.
This book will help you analyze existing strategy and create your own.
Richard Rumelt
What’s unique about this book: The juxtaposition of good and bad strategy examples makes the author’s points much better than just advocating for good strategy.
The heavy use anecdotes and stories sets it above the average business book.
It’s also unique because it breaks down one of the largest, most mysterious business concepts (strategy) into something any of us can do.
My Advice: Try to reflect on one way you can influence your strategy for each of the techniques he covers in Part II: Sources of Power.
Audience: Anybody who manages people, a budget or both. If you need to make decisions and set goals, this book will help you separate the fluffy thinkers in the room from the serious thinkers.
Style: The book often starts with a snippet of theory and then supports it with real stories from companies that the author has worked with. Then to mix it up, the author will start with a story and then work in the theory as he goes. The latter style is intriguing since it keeps the reader engaged by making you guess which direction the advice will go.
Thanks to Marty Cagan and others who kept referring to this book as a must read. I agree.
Jim Morris, Product Discovery Group
Jim coaches Product teams to collaborate with each other and seek customer input early and often during the design and ideation phase.
