A book by Richard Rummelt.

1. by Richard Rumelt
Most people give up very close to the
finish line - Ross Perot
Book Review
Good Strategy Bad Strategy

2. What is strategy
Must define many plausible and immediate
actions
What an organization does + does not do
Heart of strategy = Advantage

3. Identifying bad strategy
●Skipping over problem details
●Ignoring the power of choice and focus
●Conflicting goals
● Laundry list of desirable outcomes
● Ignoring genuine competence
● unfocused resources

4. Identifying bad strategy - 2
●High sounding sentiments
●Plan to spend more to get better
●Template style strategy with mission, vision
& objectives
●Belief that only positive attitude is enough
●Pursuit of unrelated challenges

5. Identifying bad strategy - 3
●Non coherent strategies - conflict with one
another + pursuit of unrelated challenges

6. Good strategy
●Existing strength + strength through coherence
●Power of Steve Jobs strategy
●Power of Walmart strategy
● No ambitious revenue & profit goals
● Redesign of whole business logic around a
simplified product line
● Large store + low inventories
● Barcode + integrated logistics + frequent just-
in-time deliveries

7. Good strategy - 2
●Focus energy & resources on one or a very
few pivotal objectives whose
accomplishment will lead to cascade of
favorable outcomes
●Find the theory of failure to create a better
strategy
●Push resource to some end away from
something else

8. Good strategy - 3
●Good strategy + Good organization =
Specialization at the right activities +
Essential amount of coordination
●Strategic leverage = Insight into what is
pivotal + Concentrated application of effort
●Pivotal points magnify the effect of focussed
energy & resources
●Concentration = focus on limited objectives

9. Good strategy - 4
●Threshold effect (critical level of effort
required to affect the system) - limit
objectives to those that can be affected
●Better to turn around small objectives than
incrementally affect many big objectives
●Find proximate objectives - close enough at
hand to be feasible - to achieve or
overwhelm target

10. Good strategy - 5
●What is the one single objective, when
accomplished, would make a big difference?
●Very successful = Special skill or insight at
removing limiting factors
●Going step by step and refocus on one goal
at a time
●Concentration - invest in resources where it
will make the large visible difference

11. Good Strategy - 6
●Action is needed. Impediment to action =
Hope that painful choices can be avoided +
long list of priorities that can be achieved
●Going step by step and focus on one goal at
a time
●Press where you have advantage. Side step
where you don't
●Extensions based on proprietary know how

12. Good Strategy - 7
●Ride the wave of change to get to high
ground. Needs intimate feel for its dynamics.
●Competitive advantage - If you can see 10%
more in the fog than other can see
●Introduce simplification to break inertia
●Check coherence daily, monthly or yearly to
avoid being lost

13. Good Strategy - 8
●Power of NVIDIA strategy
o Sharp change in focus after first failure, from multimedia to 3D
graphics, adoption of SGI triangle
o Limitless demand was anticipated in 3D graphics
●Creating strategy - Take viewpoint of others
(rival, customers etc.), not your own thinking!
●Intense attention to data and what works!
●Analyze Insights (ideas that pop in the head)

14. Roadblocks to Good Strategy
●Easy to take the first idea that comes to your
mind, full analysis of every issue needs time
& energy.
●Complex situation: too many variables, ill
structured > makes people uncomfortable
●Beyond the edge of our vision there may be
better ideas!

15. Removing Roadblocks
●Have tools to fight your own myopia
●Question your own judgement
●Make recorded judgements to improve in
future
●Welcome different ideas rather than
tweaking the initial one slightly
●Try hard to destroy existing alternatives

16. Removing Roadblocks - 2
●Have a panel of experts in mind that you are
familiar with. Use internal mental dialog
●Identify substitution of popular slogan for
insight
●Carefully and independently assess the
situation

17. Good Strategy Kernel
Diagnosis Guiding Policy Coherent Action
Signpost for
approach to deal with
obstacles
But
Not defined details of
the trip
Coordinated policy
Resource commitments
Actions to carry out
guiding policy
Judgement about the
meaning of facts:
● Classify situation
● Link facts to
patterns
● Find issues to put
more attention to

18. Leader's responsibility
1.Decide which pathways will be most fruitful
2.Design a way to marshal the organization's
knowledge, resources and energy to that
end
3.Overcome ambiguities about specific
obstacles