Having recently listened to Good Strategy, Bad Strategy by Richard Rumelt on Audible I am reminded by why it is considered one of the best books on thinking strategically. Stepen Eloph who has shifted Nokia from independence to being reliant on Microsoft and its operating software for smartphones. - Good Strategy Bad Strategy, page 7. I guess everybody who has ever come up with a good (or for that matter poor) diagnosis has always thought it provided genuine insight. Creative Commons Attribution-NonCommercial-ShareAlike 3.0 Unported License, “does more than explain a situation, it also defines a domain of action” that is to say. Oct 4, 2016 - This Pin was discovered by Emilios Rotsides. If any of these elements are absent, it should raise warning signs about the validity a… Failure to face the challenge The professed strategy fails to recognize or define the challenge facing the enterprise. As you state, this all rests on the assumption that the business diagnosis is accurate. The kernel of a strategy contains three elements: a diagnosis, a guiding policy, and coherent action." 'height': '57px', 3, “Bad Strategy”] Good strategy has a basic underlying logic: coherent action backed up by an argument, an effective mixture of thought and action. For example, I believe that terms like “seamless” or multi-channel have become so overused that they have lost a lot of meaning. Why is it that our sales folks are so much less effective in selling to our business customers? It continued to hurt for several days and we could not figure out why it was hurting. Instead, a talented leader identifies the one or two critical issues in the situation — and then focuses and concentrates action and resources on them. Hall of Shame: SwissAir -The Service Sucks!! He summarizes that a good strategy has three crucial elements: a diagnosis, a guiding policy and coherent action. It contains three elements: 1. }); It also means the a diagnosis is a decision – a decision of substantial importance. Five Criteria: Good Strategy vs. Bad Strategy ~ Future of CIO Good Strategy, Bad Strategy pinpoints the polar difference: The diagnosis and actions that constitute good strategy, the fluff and failures that cause the bad. A graphics company contacted the author and strategic management consultant Richard Rumelt for his help in defining its strategy. your own Pins on Pinterest Let me close by trying to give you a leg up in crafting good strategies, which have a basic underlying structure: 1. (Part III, Guiding Policy), Do you know the difference between a good strategy and a bad strategy? Customer Experience: Is Amazon Going Downhill? Some very good tips that you've pulled out from the book. According to Richard Rumelt in Good Strategy/Bad Strategy: “An especially insightful diagnosis can transform one’s view of the situation, bringing a radically different perspective to bear. Article Type: Suggested reading From: Strategic Direction, Volume 28, Issue 8 Richard P. Rumelt,Crown Business, New York, NY, 2011, 336 pp.. for dealing with the challenge. Then I draw your attention to: I will continue the conversation in the next post and explore the second element within the kernel of a strategy: the Guiding Policy. So I was grappling with the question “What is going on here?”. And because you should know the difference between what passes for strategy (‘bad strategy’) and real strategy (‘good strategy’). 'overflow': 'hidden', I think “Good Strategy – Bad Strategy” by Richard Rumelt is one of the best books on strategy I have come across. 'left': '80px' You will find them (Apple, IBM) towards/at the end of this post. Allow me to share a personal example, again. The concept of a kernel is important, as it serves as the core of any good strategy. Speaker(s): Professor Richard Rumelt Chair: Professor Gordon Barrass Recorded on 20 October 2011 in Sheikh Zayed Theatre, New Academic Building. 3. View CMA's Blogging Policy. Bad strategies are often wishful thoughts of business owners and managers. Bad objectives A strategic objective is a means to an end. To wrap up, the parts to good strategy: Diagnosis; Choice (Author calls this guiding principles) Action (Author calls this coherent action) Learn more about good strategy: Good Strategy Bad Strategy: The Difference and Why it Matters, by Richard P. Rumelt. In the final analysis, the future is simply not predictable though we are bewitched with the notion that we can predict the future. “Bad strategy” occurs when there is bad doctrine, when hard choices are avoided, and/or when leaders are unwilling or unable to define and explain the nature of the challenge. provocative conversations: questioning conventional wisdom / stimulating original thinking. Why are we doing this (diagnosis), what is the plan (guiding policy), and how will we accomplish this strategy (coherent actions). Invaluable Customer-Centricity Lessons From Tesco. So they are blind to the point you make. Rumelt's `Good Strategy Bad Strategy' provides a refreshing, straight-forward take on business strategy basics. His 2011 book (Good Strategy/Bad Strategy) redefined strategy as a form of problem solving. Transform Your Business with Dr.Deming’s 14 Points, by Andrew Stotz, PhD, CFA Good Strategy, Bad Strategy pinpoints the polar difference: The diagnosis and actions that constitute good strategy, the fluff and failures that cause the bad. As Rumelt says: “In business, most deep strategic changes are brought about by a change in diagnosis – a change in the definition of a company’s situation.”. Strategy comprises… A diagnosis that defines the nature of the challenge. In my consulting work(as a strategist) a great deal of my time is spent in the following: creating a ‘map of the territory’; and coming up with a diagnosis. “A good strategy doesn’t just draw on existing strength; it creates strength through the coherence of its design. $(function() { And the grea… (Part I), 9 observations on the retail shopping experience. A set of coherent actions. Because the diagnosis shapes the future: the guiding policy, the set of coherent actions, and the outcomes that result. I was one of the first to read it, and once I picked it up I had trouble putting it down. var rotate = false; for dealing with the challenge. Often what passes for strategy is really a goal or, at best, a tactic. I think “Good Strategy – Bad Strategy” by Richard Rumelt is one of the best books on strategy I have come across. With a topic such as strategy that is somewhat intangible, defining a parameter of what not do do can be very instructive. From “Good Strategy, Bad Strategy… By Richard Rumelt According to Richard Rumelt, a good strategy rests on three components; Diagnosis Guiding Policy Coherent Actions A clear identification of the problem. Title: Good Strategy/Bad Strategy: The Difference and Why It Matters Author: Richard Rumelt Published: 2011 by Crown What It Teaches: The first thing the book teaches is a … It offers a picture of what good strategy looks like. Is this the most serious misunderstanding plaguing customer-centricity? Close. Rather, they pursue multiple objectives that are unconnected to one another or, worse, that conflict with one another,” he observes. $("#fooHomepage").carouFredSel({ Customer Experience Lessons From The Cafe Hotel Greinwald, Customer Experience Lessons From Leitner’s Hotel Garni. I came up with various answers: he eats too much junk food and that is affecting his mood/behaviour; he is bored; we are not being strong/consistent enough in enforcing discipline ……  When I discussed this with my wife she replied: “What is missing is a relationship between you and him!”  It immediately struck me that this was a game changing diagnosis: it opened up avenues that had simply not been present. Written in an informal tone, the reader can immediately connect with the author. Hi Patricia - great post! i.e., Framing. As a result I ended up with a completely different guiding policy and this triggered a radically different set of coherent actions. Good Strategy Bad Strategy The Difference and Why It Matters Issuu company logo. } Good Strategy Needs a Kernel "A good strategy has an essential logical structure that I call the kernel. What I like most about this book is the different lens which it applies to the complex topic of strategy with clarity provided through what to avoid with business strategy development. As the following diagram shows the kernel is composed of three strands: Diagnosis; Guiding Policy; and a Set of Coherent Actions. As the following diagram shows the kernel is composed of three strands: Diagnosis; Guiding Policy; and a Set of Coherent Actions. The classic is a scrambled mess of objectives – everyone’s wishes and dreams gathered together into an unworkable plan. Like good medicine, having experts participate in the diagnosis and providing solutions can make all the difference. In Good Strategy/Bad Strategy, Richard Rumelt makes a two-fold contribution to the strategy literature – first he clearly distinguishes bad strategy from good and, secondly, he makes … 'float': 'none', Bad Strategy •Diagnosis: Failure to face the challenge •If you fail to identify and analyse the obstacles, you don't have a strategy. A sound strategy consists of three key interdependent (and equally important) aspects. I was one of the first to read it, and once I picked it up I had trouble putting it down. Strategic objectives are “bad” when they fail to address critical issues or when they are impractical. Maz, I enjoyed the article, and take the point about diagnosis providing insight, but how do you know when a diagnosis is good or provides genuine insight? A good strategy "may consist of more than the kernel," Rumelt says, but it must include one: "once you apprehend this kernel, it is much easier to create, describe, and evaluate a strategy… And because you should know the difference between what passes for strategy (‘bad strategy’) and real strategy (‘good strategy’). His central thesis is that good strategy has good structure, a "kernel" consisting of a diagnosis, a guiding policy, and a coherent action." Steve Jobs who changed the diagnosis and thus did the opposite of what the experts advised – sell Apple, license the software – when he took the helm at the almost bankrupt Apple; Lou Gerstner who changed the diagnosed and how he did the opposite of what experts were advising – break IBM up into seperate/distinct businesses; and. “It is like a signpost, marking the direction forward but not defining the details of the trip,” he says. Now that is quite a compliment for a management book, especially one on Strategy. Good Strategy and Bad Strategy: What is the kernel of a strategy? Bad strategy mistakes goals, ambition, vision, values, and effort for strategy (these things are important, but on their own are not strategy).

good strategy bad strategy diagnosis

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