The Book ‘Good Strategy Bad Strategy: The Difference and Why It Matters‘ by Richard Rumelt
The ability to implement a strategy in real life is the most important aspect of a leader in any organization. It does not matter whether it is a local entrepreneur, a CEO at a Fortune 100 company or a pastor in a local church. In his book, Richard Rumelt shows that there has been an increasing tendency of equating some vague elements, such as financial goals or motivational slogans to strategy in organizations. According to the author, he sees these as a “bad strategy.” He goes ahead and creates or awakens an understanding of what he believes to be a “good strategy” (Rumelt 12). He explains why it is important for business readers to focus on good strategies and forget about the bad ones. According to Rumelt, a good strategy should be coherent and specific in overcoming obstacles or challenges of organizational progress. A good strategy should work by applying and harnessing the power in areas where it will have the most effective impact whether it is the launch of new products or putting a man on the moon. Richards’ nine sources of power ranging from using leverage to effectively focusing on growth are great eye openers, yet pragmatic tools that can be put to work in a day.
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Surprisingly, the author says that a good strategy is in most cases unexpected. It is due to the fact that many firms do not have one. Instead of having strategies, most organizations have visions that by mistake consider financial targets as strategies. Most organizations, according to the author, tend to pursue a “dog’s dinner” of conflicting actions and policies. Richard argues that the core of a good strategy is insight into the real state of things or “true nature of the situation, into the hidden power in a situation and into an appropriate response.” He also shows how one can easily generate insight. Good Strategy/Bad Strategy has used some fascinating examples from military affairs, business and nonprofit to bring its real or original and pragmatic ideas to life (Rumelt 23).
How It Fits in Classwork
The book Good Strategy/ Bad Strategy and Why It Matters is very consistent with what we have learned in class. Many organization’s strategies are in trouble. There have been some shortcomings, which were manifested through organizations failure to anticipate the financial crisis, exposed to complacency and inertia. Richard Rumelt’s book on strategy is a good advisor in relation to our classwork. The book and classwork contain much in common; starting from concepts to methodology. The writer of the book uses the same strategy that incorporates real life examples and case studies and explains how they are related to his work. Classwork extensively uses the same features and moves further to ensure that it covers the key points in every chapter. The use of the book will, therefore, assist the student in a clear understanding of the coursework through its easy explanation of ideas. Rumelt uses more of layman’s language, which makes it easy for a starter in the field to comprehend the information and more so, when it comes to strategizing design. He also uses case studies from companies that are known (Microsoft, Apple Inc. and more), which helps the reader to easily make a picture of what the writer is trying to bring forth. It is worth, therefore, to implement the book in class by adding and illustrating the coursework and probably by importing some of its case studies as they closely relate to the areas covered.
The second and third chapters of the book discuss environmental analysis. It includes, but not limited to, strategic analysis. Strategic analysis gives notion on how managers use competitive intelligence, monitoring and scanning to develop a forecast. The book also reveals the roles and application of scenario planning. Richard Rumelt, in his strategy book, discusses how management can effectively make their strategies through the above-mentioned aspects in making better decisions and plans than their competitors (Rumelt 36). Current chapter also covers the intensity of the external environment and competition between various businesses. Richard Rumelt’s book helps in a clear understanding of such values through its vast coverage of the competition between various leaders and outlines how one can work his way so that he could emerge as the best among competing individuals. The book may be of great help in understanding the steps of environmental forecasting and scenario analysis through its vast case studies that relate to strategizing and forecasting. He argues that management should hold the role of similarities and differences at the center of improving their standards so that they could enjoy a clear competitive advantage over their rivals. They should also form a unique kernel to guide them in determining the best course of action to follow in business (Rumelt 43).
The fifth chapter of classwork talks about various strategic plans and their mode of implementation. It discusses on the advantages/disadvantages of each mode over others and how one can make the best considering the various modes. The chapter also covers the various pitfalls of possible paths that a manager can potentially follow and the steps that one may follow in unique implementation of each mode. In his book, Richard covers the various modes that the management can adapt and their projected outcomes. He further recommends the mode that fits various particular cases best and indicates how well they can be implemented to give the best results. Richard explains his ideas in a simplified way and his reasoning on management and strategic methods are distinct and clear to understand. They can, thus, be of much help as a complement to classwork notes in helping us to easily understand the concept (Rumelt 67).
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The book uses a methodical approach in explaining its ideas. It means that it does not solely rely on wishful-thinking approach and, thus, is an important tool for business-oriented students. The book, combined with the notes, is the ultimate tool for students who target the outside market and whose sole goal is to come up with deliverables that fit the society best. It focuses on actionable strategy rather than just teaching and will, therefore, prepare students for the market activities. Its coverage of both the good and bad strategies makes it a good choice, since the reader will have an insight of both what to do and what not to do.
Ways in Which the Book Fails to Fit in Classwork
The book has a few weaknesses when it comes to equating to classwork. It would have been easier if he came up with easily summarized points to his work. Summarizing means that one can have a picture of what he will meet in the coming pages before actually coming to the page. In the coursework the ideas are clearly outlined and if not, they are easy to identify within a certain range. In the book, however, Richard uses more of “all-in-one” approach by covering several ideas at once. It makes the book hard to understand (and a bit confusing to some extent). So it could be a problem if it was adopted as a replacement or supplement for coursework.
The coursework integrates case studies and examples the same way as the book. They are essential for easy understanding of the concepts. They should, however, be chosen to correctly fit the context that the area is trying to deliver. Making the wrong choice gives an ultimate wrong idea, since the supportive work should be effective enough to justify the idea, as well as clear enough to bring out the intended meaning. The book, to some extent, fails current test, since the writer makes wrong choices in some areas where the case studies and examples are too weak and somewhat contradicting in aspects of the intended idea. Over-emphasizing some ideas more than others is also prevalent in the book and it creates the illusion that the writer is insisting that the reader should agree with some of his aspects while leaving other areas open in matters of choice.
The book also contains few setbacks when it comes to its coverage. An educational book should come up with backgrounds and explanations on the causes/origin of certain occurrences before the writer can discuss them in-depth. The approach would ensure that one can have some understanding on something and at least some ideas on how to avoid the drawbacks. The course book is clear on its aim, but the book would need to undergo a review to add the missing information so that it could be relevant to the class work. Failure for the book to cover the causes of bad strategy means that one cannot be in a position to understand how to prevent the weakness, despite the vast coverage of how to implement it or how it leads to poor businesses.
Pros of the Book
The book is impressive for a strategist and a business-oriented mind. It, however, consists of few areas that would help perfect it if reviewed. The first section (particularly chapter 5) creates a challenge to various business heads when it comes to creating their strategies. The writer’s argument on strategy calls strategists to come up with a clear and compact strategy kernel, which should guide the rest of strategy definition and implementation. A poor kernel always implies bad strategies in real life and managers should always learn to plan and outline the strategy straight. They should also differentiate their strategies from their mission; their vision should guide the strategic approach in a way that helps attain the goals defined in the vision (Rumelt 87).
The writer uses a simple language that is easy to understand, especially for managers. The author extensively uses examples, case studies and sharing experience in his earlier works. He backs up his work and concepts with real life cases both from class work, military campaigns and corporate world. The case studies and examples, in addition, make the book interesting to many readers.
The book is enlightening and educational and has much relevant information concerning management and business running. The author explains management in a lucid manner through division of strategy into three elements: diagnosis, guiding policy and coherent action. These elements define the steps and plan that a strategist should work on in order to become successful. He also gives a number of hallmarks for a bad strategy and the relationship between charisma and leadership and their application in strategic understanding.
Rumlet’s book brings the best of critical thinking and practical application. He gives varied advices to managers and general readers on handling complex and daunting situations. The book breaks down strategy types, where the writer recommends and gives variants of design-type strategy implementation. Such recommendations make it easy for managers, therefore, to make decisions and arrive at a procedure for creating their strategies. He also evaluates various effects and factors to strategy, including inertia and entropy. The book, therefore, comprises of most basic features that the management and business leaders require in a book (Rumelt 87).
Cons of the Book
Rumelt, however, is not clear about his ideas in some sections. He picks up ideas and bombards them on a single place without evaluating whether they make the desired sense. The over-emphasis about the military strategy makes the idea somewhat confusing. He pays very little attention to the true meaning of leadership not considering the fact that such meaning should be put straight before one clearly understands the meaning of strategy and strategic planning. The way he combines his expertise on strategies and church/philosophical history is a way off. One can easily misjudge the pride that the writer expresses in the book. The phrases “I told you so” and “I called every crash” while explaining about his consulting scope can, to some point, affect the impression that the rest of the ideas create.
The writer does a commendable job while covering the section on bad strategy and how harmful it could be to businesses and management. He, however, loses clarity in section two and three, more so in his examples. He chooses the wrong examples to strengthen his ideas. The discussion on the 2008 financial crisis does not relate effectively to his actual argument. Making good choices of examples makes it easier for the readers to understand the idea that the writer is trying to express. He also fails to effectively use personal anecdotes as the book contains too many detours on the same points.
The author could have improved on the book if he had done a better summarizing of his point. A good book almost certainly contains case studies that give the reader a clear picture on the real life application of a certain idea. The writer of current book should, however, understand that some case studies are better than the others. The education case study is a way too weak in comparison to the idea that he is trying to bring forth. Admiral Nelson, for example, would only rely on his captains to save chaotic situations through their superior experience. These do not, in any way, attribute good strategy for the admiral but, rather, experience of the captains. The author has varied ideas that are equally important. Some cases/ideas, however, receive just a glance while he gives the others an in-depth way. The style he uses in writing is effective as much as a proper understanding would require. It would have been better if he had included a little panache in his work.
In order to have a clearly understanding of the good and bad strategies concept, a writer needs to put forth the origin of the ideas. In this book, the writer fails to clarify why there is much bad strategy. He fails to clearly address his critics, since approaches for a bad strategist and for a leader who does not have any strategy should be a bit different in their scope. The writer criticizes people for lack of strategy in most parts of the book rather than for bad strategy. He should have been clearer on the reasons why bad strategies occur rather than bumping into tackling managers who confuse mission statements for their strategies. The writer argues “there is no formula” to apply when creating good strategies, which is right. He, however, fails to differentiate success against good strategy and failure against strategy. Bad strategy does not mean that there is an absence of good strategy.
How the Book Could Be Helpful in Future Career
Rumelt gives many relevant cases in the book, which makes the book ideal for a manager running a business. They elaborate on the application of the concepts in real life rather than just paperwork. He also shares his extensive experience with various consultant forms and in a number of business strategies that he participated. The openness simulates a model that is easy to apply and that sounds realistic. He goes further to differentiate the intermediate aspects that are mostly confused in the business field: mission statement, vision and strategy. It will, therefore, be easier to apply the correct aspect to the curtain situation. He also guides on the steps for inventing a strategy where one should identify a challenge, describe policies on addressing the challenge and describe desirable coordinated actions that should realize the policy.