Good Strategy / Bad Strategy 📗
Summary and review of the most influential work by Richard Rumelt.
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Hey there! Today I am re-publishing our take on one of the best books we have ever read in our Community Book Club, which is Good Strategy / Bad Strategy, by Richard Rumelt.
I am doing so because 1) this is a timeless book, which can help people from any kind of job, and 2) because the first edition of our review came out before I started working on Hybrid Hacker, so readers here have likely missed it!
This article should work on two levels:
📋 Summary — explain the main themes, frameworks, and ideas included in the book. So if you are low on time, you can just read this instead of the whole thing.
🌟 Review — illustrate our take on such ideas, how they relate to our work, and what we liked and disliked.
Let’s go!
⚖️ Good and Bad
At the very beginning of the book, Richard Rumelt says that strategy seems to be everywhere these days.
It was 2011 when he wrote this, and, I swear, it is even more true today. Every day we are bombarded with threads, LinkedIn posts, presentations, and ebooks by people who seem to have strategies about pretty much anything.
But then, Rumelt argues, truly good strategy is rare. This is a core theme of the book, which, as the name implies, spends almost the same time talking about good strategy, as it does talking about bad strategy.
And that’s what caught my attention — as a fellow writer.
Whenever I read something, I can’t help but think about how I would have written about that topic, in terms of structure, tone of voice, and actual content. It’s like a process that runs all the time in the back of my mind.
So, what struck me is that this book is not called “How to create a good strategy” — or some catchy variation on that. It is called Good Strategy / Bad Strategy.
In fact, the book hits you with a one-two punch:
First, it hits you with inversion — it shows you what’s bad. Since bad strategy is incredibly common, chances are this is going to hit you hard: “been there, done that”.
Second, it shows you what good strategy looks like. And at this point your mind has been primed to hear what the author has to say.
This is so effective that we will follow the same pattern for this review. Here is what we will cover:
❌ Bad Strategy — what it looks like, and why it happens.
🔮 Good Strategy — what strategy is really about, and how to create it by following Rumelt’s three-step framework.
💪 Sources of Power — the key elements to consider from which you can draw good strategy.
⚔️ Competition — putting the book’s key lessons in context with digital products.
📣 How to be heard — how you can contribute to your company strategy and communicate effectively.
📌 Bottom line — final thoughts and takeaways.
Let’s dive in!
❌ Bad Strategy
Early in the book, Rumelt says that good strategy is about two things:
Recognizing the true nature of your challenges
Designing a way to overcome them
This is straightforward. If you asked any leader for a definition of strategy, most would probably come up with something similar.
The problem, though, is that doing these two steps is hard. So, people take shortcuts and often call strategy what strategy is not.
Bad strategy has four characteristics:
☁️ Fluff — true expertise is replaced by grandiose phrasing/vocabulary.
👓 Not facing the problem — the specific challenges that the company faces are not defined or addressed.
🔀 Mistaking goals for strategy — goals are set without including methods to achieve them. E.g. “our strategy is to grow 10% MoM”.
🫖 Boiling the ocean — focus on too many objectives.
Why does this happen? Reasons are many—as Rumelt explains—but personally I like to focus on one, which is commitment.
I am an amateur chess player and in chess there is this notion of committal and non-commital moves.
Non-committal moves — are about improving your position while retaining optionality on what to do next, like what attacking strategy you may want to pursue.
Committal moves — are when you set a direction you cannot (easily) withdraw from.
Non-committal moves keep you in the game, but committal moves are how you win.
You can draw parallels to this with almost any domain. Retaining optionality is important as long as you are not sure about what your strengths are, or how to leverage them. But then, success comes down to finding a way to narrow your options and make some irreversible bet on what makes you special.
And that’s where many companies get lost.
Leaders don’t want to choose among the various interests within their operations, each backed by stakeholders with legitimate theses, and end up with an unfocused strategy.
To compensate for this, you may witness two different types of drifts, based on your company culture:
🔥 Positive thinking — focus on hustling, heroics culture, and the idea that you can win through intensity.
👔 Bureaucracy — focus on rules, template-style plans (e.g. vision → mission → values → strategy), and the idea that you can win through process.
But both styles are not a substitute for good strategy. You can’t brute-force your way to success in the first case, just like you can’t expect your unique strategy to come out of fill-in-the-blanks templates in the second.