Richard Rumelt describes the differences between good and bad strategies. He also expands on the ways good strategies can be supported by an organization.


Good strategy has 3 key elements

  • A diagnosis of the situation and the challenges
  • A guiding policy to deal with the challenge
  • A coherent set of actions to carry out the policy

Bad strategies are not just the opposite of a good strategy, but they disguise themselves in language that seems like they could be strategies. Bad Strategies:

  • Are goals that are presented as strategies. ie. Growth for the sake of growth. Growing any metric is a desired outcome. It defines the what, it doesn't get at the how that's needed with a strategy.
  • Are wrapped in motivation and hyperbole. Trying harder, working faster, caring more about the customer aren't complete strategies. At best, they are part of a strategy, but are missing the diagnosis of the situation, and actions that highlight how these principles will make it successful.
  • Values aren't strategies. Being honest, transparent, innovative are ways of behaving.


  • Given the situation with x
  • We will do y
  • We will start with z1, z2, and z3


  • Look at how resource is allocated to determine what the strategy is currently.
  • Miscalculations aren't bad strategy.
  • To have a strategy, you have to be willing to choose. A segment to focus on, and clear opportunities to ignore. The opportunities should be valid for someone else to pick as a viable option.

Do not compete on superlatives and adjectives. Compete on choices:

  • We’ll spend more, we’ll have more features, we’ll move faster, we’ll have happier customers vs. we’ll do x, but not Y to make our customers happy; a set of valid trade offs would be reasonable for another company
  • ie. In a battle, different fighters have different styles because of their skills, shape; what shape is the company? What skills does it have? How is it an advantage? How do the advantages compound?