Good Strategy, Bad Strategy | Richard Rumelt

Begin to try to identify the one or two key challenges that can actually be addressed and what are we going to do about it?

In a complex organization, it's hard to focus energy because of all the different interests

Strategy is about focus, not trying to do too many different things

Focus is...when I was nine years old, I was at summer camp and had my parents send me a magnifying glass...Focus is the fundamental source of power in strategy

Each time you say yes, you risk turning a nascent good strategy into a bad strategy

If you have any chance of succeeding, you have a target market and a solution to the target market's problem in mind

We need a hierarchy of power, because there has to be some mechanism for deciding what we're going to do

Strategy is not mysterious. It's about solving problems, the most important problem you're facing that you actually can do something about

If you want to get better at strategy, spend a lot more time diagnosing the problem and finding the biggest challenge that is keeping you from what you're trying to achieve

The biggest economic fact of the last 150 years, you don't know why it happened

Strategy isn't picking a strategy out of a list of common strategies; it's looking at the problem, what makes that problem hard, and seeing a way to solve it

Call it an action agenda. Here's what we're going to do—not here's all the things we wish would happen

You need a source of power. I say power, I don't say advantage or efficiency, because there are different ways in which power is exhibited

To undertake a strategy that you think will work, you've got to have a reason that it makes sense, and that reason is derived from some source of power, some source of advantage

Strategy tends to be surprising when we see it work because we don't expect it

The action agenda has to be quick adaptation to changing conditions

Part of the problem is that the concept of strategy has been so beaten up by thousands, hundreds of books, and thousands of more websites that people have a hard time trying to figure out how to create a strategy, because they're drawn up, down, left, right. So my two pieces of advice, anybody that's actually trying to do this is, A, state the problem, and, B, don't call it a strategy, call it an action agenda, that you're not creating a strategy, you're creating an action agenda. What are we going to do about this problem? That's essence of what you're doing.

A strategy is a design for overcoming a high-stakes challenge

Strategy is always about dealing with an issue, a challenge, a problem

All strategy is problem-solving. It's a form of dealing with challenges

The guiding policy is sort of the strategy. It's the core of it. It's, here's how we're dealing with the situation

Focus, it's the fundamental source of power and strategy

For a strategy, you need to exploit an asymmetry of some kind

A list of all the different things you wish would happen is not strategy

Ambitions are not a strategy

One of the problems in doing strategy is that it's somehow been displaced by this literary form about mission

Organizational dynamics are often the biggest hindrance to winning strategies

Insight is critical. Insight is not magical; it comes from immersing yourself in the nature of the problem

A skilled designer focuses on what makes the problem hard, and then by focusing on the difficulty, they see a way around it

If you can't do the crux, don't do the climb

So part of what a diagnosis is, is a decision of what you're going to pay attention to. And, and, and the hypothesis, or several hypothesis, hypothesis, about what's going on, how do things connect together? And that's beginning of the diagnosis

The guiding policy is, is, what are we going to do? Now, it's a simple thing to say, a guiding policy. And then the guiding policy is sort of the strategy. It's the core of it. It's, here's how we're dealing with the situation

You can't say our strategy is to do everything that everybody wants to do. That's what happens when you form a committee in a city. And you say, what's our city strategy? They say, oh, we're going to paint the park benches. We're going to clean up the grass. We're going to build on this. We're going to have a little of that. And anybody can raise their hand and says, well, what about the birds? Can we hold that in too?

And so having a coherent actions that are that don't nullify one another is an important part of strategy. There's all three of them have to be there. You have to be an understanding of the situation. There has to be a guiding policy. How are we going to deal with it? And then the coherence and action is critical

The bad strategy, the standard bad strategy for a corporation is a set of profit goals or performance goals. A set of goals. Now, goals are the engineering of how companies work to some extent, but abstract high level goals. They're not a strategy

It's not mysterious. It's about solving problems. It's about solving the most important problem you're facing that you actually do something about. You don't have to be some guru to call it strategy, but you need to be focused on something doable and be consistent with it

That's the exercise. It's from time to time. After the foundry, it's all say to me, well, where's the strategy? Where's the document with the mission vision, all that? Nothing—that's not what we do. We're doing an action agenda

You're recognizing the problem and you have an action agenda to do it. It's not five years out, ten years out. It's not your general mission to build a better world. None of that. All of that is a different literature form