Separating good strategy from bad

A lot of things in business get labelled ‘strategic’ that aren’t. Instead they are either goals dressed up as strategy or worse, high-sounding language that doesn’t mean anything to anyone. Richard Rumelt dubs this ‘bad strategy’. It’s dangerous because it deludes companies into thinking they have a plan when they don’t. Being fluffy is not strategy. Simply being ambitious is not a strategy.

Good strategy on the other hand looks deeply at the current situation, diagnoses the challenge or problem and provides guidance on how to address it.

Remelt calls this the “kernel of good strategy” and details it thus:

  1. A diagnosis that defines or explains the nature of the challenge. A good diagnosis simplifies the often overwhelming complexity of reality by identifying certain aspects of the situation as critical.
  2. A guiding policy for dealing with the challenge. This is an overall approach chosen to cope with the obstacles identified in the diagnosis.
  3. A set of coherent actions that are designed to carry out the guiding policy. These are steps that are coordinated with one another to work together in accomplishing the guiding policy.

Here’s to more good strategy in 2012.

Ref: Good Strategy Bad Strategy, Prof. Richard Remelt

Posted January 5th, 2012 in strategy by Ben Claxton

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