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Takeaways: Good Strategy / Bad Strategy (Rumelt), Part 2
Dense is the wrong word. Nutritious 🍗? Packed with insight 🧠? The book is good going on great. I’m starting to think this may be my best read of 2021 🏆.
In this read, Rumelt revealed a deeper well of military-inspired strategic storytelling. I expected it to be dry and complicated, but each example was edited into a short and specific lesson. It’s really rare to see this kind of discipline in a business book.
Enough navel-gazing. Let’s get into some takeaways.
I jumped back in with the strategic analysis of Schwarzkopf’s strategy during Operation: Desert Storm. The chapter was still warming us to the idea that “good strategy is unexpected”. In this case, we should be surprised there was a focused strategy for defeating the entrenched Iraqi invaders of Kuwait.
Takeaway #1: “Most complex organizations spread rather than concentrate resources”
The real insight here from Rumelt is that a large part of Schwarzkopf’s success came from his work across military and government entities who each had their own “ambitions and desires”. “Conflicting goals,…accommodating incompatible interests…make for a Bad Strategy.” With crystal clarity, Rumelt reinforces the basic idea that saying “no” and what you say “no” to is as important as what you do.
Takeaway #2: “Strategy brings relative strength to bear against relative weakness”
The story of David & Goliath is presented in a new light here. Rumelt uses it to show the fallibility of our preconceived ideas about strengths and weaknesses. He’s framing the chapter ahead (literally titled “Discovering Power”), and asks “how can we discover a pivotal objective or create an advantage, the way David did?”
Takeaway #3: “Wal-Mart beat out Kmart because its policies complemented one another, forming a hard-to-imitate design that broke conventional wisdom”
Instead of thinking in individual stores, Walton thought in regions, and was able to beat out Kmart by creating complementary policies (what you’d call supply chain management today, was novel in the 1980s) instead of letting local store managers run supply/data on a local level.
He was able to create regional economic leverage by serving populations of a million instead of one hundred thousand. He made a network of stores into a business unit. A small shift in thinking which took the wind out of Kmart.
This was a doozy, and you gotta read it to truly appreciate the storytelling here. I’ll just say that Sam Walton’s story (Made in America) is fascinating as hell.
Takeaway #4: “Bad Strategy is not simply the absence of good strategy. It grows out of specific misconceptions and leadership dysfunctions”
Takeaway #5: “Bad Strategy is long on goals and short on policy or action. It assumes that goals are all you need”
This was a takeaway mostly because of the way he’s articulated this. Most of the chapter supports his four “signs of a bad strategy” because books need short lists.
Failure to face the challenge
Mistaking goals for strategy
Bad strategic objectives
🤷♂️ good list.
Takeaway #5: “Bad Strategy fails to identify and come to grips the fundamental obstacles and problems that stand in a company’s way.”
What we usually get instead are a set of high-sounding sentiment like “better together”. This one struck deeply in me. Have you ever heard a strategic plan and thought, but what about company dysfunction X? There’s your sign that leadership needs to call a spade a spade (or that you need to recalibrate on dysfunction X)
Rumelt says “[Real policy changes and action] are a far cry from vague aspirations such as "retain the best talent" and "maintain culture of innovation"”. Eschew fluff by anticipating real-world difficulties to overcome. Is hiring laborious and run by the wrong business unit? How do new hires learn about your company (by the two 2.5 star reviews on Glassdoor?)? I try to skip the positive affirmations and dive right into real-world thinking. Maybe too far, but we’ll see if he’s got a chapter on cynicism. 😅
Takeaway #6: “Juicy questions for questionable strategies: What has to happen for X to be realized? What specific process or accomplishment will lead to these outcomes? What point(s) of leverage does (this company) have to achieve X?”
Questions are powerful, and these aren’t rocket science, but they’re focused on a common goal. Lead people to the hard work of planning for an outcome instead of just writing it down and hoping it will manifest through “motivation”.
Takeaway #7: “The job of the leader is to…create the conditions that will make “one last push” effective, to have a strategy worthy of the effort being called upon”
Takeaway #8: “Performance goals…are not a pathway to substantially higher performance”
⭐ As I read this, I’m having conversations in my head with my boss, and I’m reworking plans to help my team be more successful than before. For example, we’re planning a small re-org. We’re splitting all customer implementation work (read: customer onboarding/integrations/site builds/logo uploads/etc.) away from the product team so they can focus on …product. This book has me thinking, is taking away distracting/reactive work going to lead to a wildly successful product team? Alone, I wouldn’t say so! Now I’ve got a decent question locked and loaded for next week.
Takeaway #9: “…management had skillfully designed a “way forward” that concentrated corporate attention on one or two important objectives”
Takeaway #10: “Good strategy works by focusing energy…on very few…pivotal objectives whose accomplishment will lead to a cascade of favorable outcomes”
I could see this book being called Good Leadership / Bad Leadership and probably not selling as well. Many of his points seem to come back to one or more dysfunctional, cowardly, or lazy leaders.
He wraps the chapter here with what he calls the “dog’s dinner” strategy, where a whole bunch of stakeholders come together, they draw up a list of “messily-connected” goals, and end up with dozens (if not hundreds) of goals, sub-goals, steps, action items, tactics, etc. which fails to concentrate the work in any meaningful way.
Takeaway #11: “The strategy should not be as difficult to overcome as the original challenge”
Recall from Part 1, a leader’s responsibility is about identifying challenges. If the treatment is as bad as the disease, then what value are you creating?
🔖 Bookmark! next chapter, “Why so Much Bad Strategy?”
The book again is Good Strategy / Bad Strategy: The Difference and Why it Matters by Richard Rumelt, and Thank you for reading Takeaways!
I’ve been writing for almost a month now, and I appreciate your support 🙌. This is a fun project to capture my love of reading business books. So far so good!
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