Rumelt brings over 45 years of academic and strategy consulting experience to his book.  He uses interesting problems?  We reviewed Richard Rumelt’s book back in July 2011 when it was first released, and this seems stories and firsthand experiences to explain the logic of good strategy, while highlighting the pitfalls and fallacies you must avoid in bad strategy.  Rumelt states, “Bad strategy ignores the power of choice and focus, trying instead to accommodate a multitude of conflicting demands and interests. Like a quarterback whose only advice to his teammates is ‘let’s win,’ bad strategy covers up its failure to guide by embracing the language of broad goals, ambition, vision, and values.”

Let’s start with four pitfalls Rumelt tells us to consider to avoid bad strategy:

1.    Failure to Face the Problem: A strategy is an approach to overcoming obstacles. If you fail to identify and analyze the obstacles, you don’t have a strategy.  This is why it is important to prepare an assessment that seeks to identify both internal and external critical issues that are obstacles to achieving the strategic objectives. 

2.    Mistaking goals for strategy: Setting metrics (KPIs) without a supporting strategy can mislead the organization. Rumelt cites a military general who may justly ask his troupes for “one last push,” but the goal still needs to be supported by a clearly defined strategy that will lead to winning.  A good strategy will create the conditions that will make the “push” effective and worthy of the effort required.  Strive to make strategy explicitly clear to everyone in the organization so that the effort by employees is supported by good strategic thinking.

3.    Bad strategic objectives: A long list of projects cobbled together at a planning session, or a set of ideas that no one has a clue about what to do or how to get there, are signs of bad strategy. Good strategy, in contrast, focuses energy on a very few high impact objectives. And they build a bridge between the opportunities and obstacles and the needed action. This is a logical and practical approach to strategy development. Telling the story and connecting the dots so that everyone understands will help make strategy a part of everyone responsibility.

4.    Fluff: Rumelt defines Fluff as a “restatement of the obvious, combined with generous sprinkling of buzzwords that masquerade as expertise designed to mask the absence of thought.”  An example of “Fluff” from a retail bank states: “Our fundamental strategy is one of customer-centric intermediation.” Sounds good, but leaves one guessing what to do next.  The clarity of the strategic message aides in communication.

As you might imagine, there are many reasons for bad strategy.  Rumelt suggests that the underlying factor contributing to bad strategy is lack of commitment to the hard work.   Good strategy, results from investing the time to make the hard choices to gain focus, and identifying obstacles and working out how to deal with them. Rumelt states that there are three key elements that make up good strategy.  At Albu Consulting, these key elements follow our Strategy Management Framework:
1.    A diagnosis: An explanation of the nature of the opportunities and challenges.
2.    A guiding policy: The approach chosen to cope with or overcome the obstacles identified in the diagnosis and the chosen approach to taking advantage of opportunities identified.
3.    Coherent action: Steps that coordinate with one another to support the accomplishment of the strategy.

We believe you cannot underestimate the value a good strategy can have on an organization’s performance.  As Rumelt argues, “A coherent strategy can be, by itself, a significant source of competitive advantage.  If you haven’t yet read Rumelt’s book, we would recommend you do, and feel free to contact us directly if you would like to learn more about how good strategy can make a difference in your company’s performance. 

“When organizations are unable to make new strategies—when people evade the work of choosing among different paths into the future—then you get vague mom-and-apple-pie goals that everyone can agree on. Such goals are direct evidence of leadership’s insufficient will or political power to make or enforce hard choices. Put differently, universal buy-in usually signals the absence of choice.”
― Richard P. Rumelt, Good Strategy Bad Strategy: The Difference and Why It Matters

About Albu Consulting
Dick Albu is the founder and president of Albu consulting LLC, a strategy management consulting firm focused on engaging and energizing leadership teams of middle market private and family businesses. With offices in Stamford, CT, the firm is dedicated to making a positive difference in the lives of Owners, Families and Employees.  For 23 years, Albu Consulting has helped its clients formulate robust business strategies and follow through on execution of key strategic initiatives. Please visit Albu Consulting’s website for more information at www.albuconsulting.com. 

Dick Albu, President & Founder, can be reached at 203-321-2147 or RAlbu@albuconsulting.com.
Rob Krist, Managing Director, can be reached at RKrist@albuconsulting.com.

About Albu Consulting

Dick Albu is the founder and president of Albu consulting LLC, a strategy management consulting firm focused on engaging and energizing leadership teams of middle market private and family businesses. With offices in Stamford, CT, the firm is dedicated to making a positive difference in the lives of Owners, Families and Employees.  For 23 years, Albu Consulting has helped its clients formulate robust business strategies and follow through on execution of key strategic initiatives. Please visit Albu Consulting’s website for more information at www.albuconsulting.com. 

Dick Albu, President & Founder, can be reached at 203-321-2147 or RAlbu@albuconsulting.com.

Rob Krist, Managing Director, can be reached at RKrist@albuconsulting.com.