Rumelt, Richard P. Good Strategy, Bad Strategy: The Difference and Why It Matters. London: Profile Books, 2017.

In discussions of strategic leadership, particularly in the world of business, there are few names as well-respected as Richard Rumelt and few texts as widely praised as Good Strategy, Bad Strategy. Currently a long-standing professor at UCLA, Rumelt has experience not only as a teacher of management strategy at Harvard and INSEAD in France, but also years of experience as a strategy consultant for companies around the world (inside cover).

Rumelt writes the book to give his readers an understanding of the difference between good strategy and bad strategy and to help them to start with some basic tools for how to form good strategy (7). He laments the broad proliferation of statements that organizations put forward as strategy, noting not that they are poor strategy but rather that most of them fail to qualify as strategy at all (2,5). His thesis is that strategy consists of clearly defining challenges for the organization’s progress and devising a cohesive and practical plan to leverage strategic resources to meet and surpass those challenges to the benefit of the organization (2, 6-7). Good strategy should include a diagnosis of the situation, a guiding policy (or policies) that give direction toward a solution, and then coherent actions that are defined well and work together to achieve the guiding policies (7, 77).

Good Strategy, Bad Strategy is divided into three parts: defining good and bad strategy, providing a partial list of strategic considerations and tools, and giving guidance on beginning to think strategically. Each chapter within these parts also contains examples and case studies to illustrate the author’s point.

The first part of the text breaks down the differences between good strategy and bad strategy (9). The author begins by noting that good strategy often seems obvious in hindsight, but due to competing personal or organizational agendas it is so rarely developed that it can often take people by surprise when they encounter it (11, 20). Good strategy relies on a thoughtful approach that gathers information and creatively views problems and opportunities. The strategist then assesses the potential strengths and resources of the organization to address these challenges and considers the unrecognized weaknesses or threats that may be waiting (21, 31). Bad strategy, in contrast, can be identified by a series of common traits: “fluff” language that lacks concrete applicability, an unwillingness or inability to recognize the real challenges facing the organization, a substitution of broad goals for practical strategy, or strategic objectives that lack practicality (32). Bad strategy is most common because good strategy requires making difficult choices or because the strategists confuse high level leadership with practical strategy (66). A repetitive key theme in this part of the text is Rumelt’s derision for vision, values, and mission statements or for strategy templates that try to drive organizational goals from a process of refining vision to initiatives. He notes that these substitutions for strategy fail to adequately discover, explore, or define the problems and opportunities that face the organization and fall short in drawing detailed, practical, and coherent steps to take in addressing these obstacles (43, 47, 68-70).

In contrast, Rumelt develops his three elements of a good strategy. The diagnosis is the comprehensively analyzed recognition of a challenge facing the organization, whether it is an obstacle, and change in environment, or an opportunity to be seized (79-80). Guiding policies are initial directional decisions for how to address these challenges with organizational resources (84-85). Finally, coherent actions are specific, coordinated, and practical actions that build on one another to accomplish the goals of the guiding policies (87, 92).

Part Two of the text examines a selected (and admittedly partial) list of different “sources of power” that organizations can utilize as elements of strategy (95). Leverage is discerning and implementing a key effort at just the right time and in just the right way to multiply its effects for the benefit of the organization (97-98). “Proximate objectives” are practical and reasonably reachable goals that further the strategy, even if some must be made as an in-between step (106, 109, 111). Organizations that have interdependent systems can analyze and address the weakest part of the system for making the most effective changes (116-117). In chapter nine, Rumelt discusses the consideration that must go into strategy at each point, whether gathering information and analyzing it from various perspectives, anticipating coming challenges, or deliberately designing coordinated action steps for the organization (128-129). He continues his list of strategic considerations with notes on the value, determination, or development of competitive advantage (150, 160, 169), the danger of growth as a strategy (159), the power of recognizing and quickly adapting to coming cultural, market, or technological changes (193-198), and the dangers of organizational stagnation due to inertia or entropy (203, 214).

The final part of the text discusses how to think strategically, presenting techniques to help the reader begin analyzing organizational strategy more systematically (239-240). He begins by drawing an analogy between strategy formation and the scientific method, in which the strategy is a hypothesis which must be tested in implementation and adjusted according to results (241). He reinforces again the importance of research and knowledge in developing strategy, pointing in particular to knowledge that is not readily accessible to competing organizations—but notes that formulating strategy also requires a systematic approach that analyzes multiple perspectives and generates ideas (241, 268). Rumelt also directs the reader back to his “kernel” of strategy, instructing the reader to find where a particular insight fits into the diagnosis, guiding policy, or coherent action of a strategy and then work from there to develop the other two parts (268). Finally, the strategist should return to the why of action, examining the problems and obstacles a strategy is meant to address, as well as considering other potential approaches (269-270).

Rumelt effectively proves his thesis in just the first portion of the book, establishing that the term strategy is frequently misapplied to impractical or overly broad organizational goals. Instead, he demonstrates that “good” effective strategy operates at practical business levels by analyzing in detail the situation of the organization, choosing a method or methods of addressing that situation, and formulating concrete steps that work together to accomplish the plan. He also excellently describes the temptation of bad strategy, which allows organizational leaders to present attractional goals without having to dig deep into actual analysis or make the difficult decisions that are a part of good strategy.

Rumelt’s distaste for vision, mission, values, and goals—and the strategy “templates” that use them—is both understandable and, ultimately, misplaced. He is correct that these can result in “fluff,” platitudes that do not suffice for strategy nor lead an organization through effective change. However, these elements of leadership have a valuable place in distinguishing the goals of the organization that strategy is supposed to accomplish, motivating and unifying teams in working towards those goals through strategy, and identifying directions and guiding principles that either aid or distract from these goals. This is particularly important in organizations that operate outside of the typical business environment, where profit or competitive dominance cannot be assumed to be the primary purposes of the organization. An organization cannot properly examine obstacles and opportunities if its goals are unclear. Rumelt is correct, though, that strategy must continue to analyze concrete organizational situations and practical cohesive steps to address those situations, rather than be satisfied with broad generalizations of organizational purpose.

Good Strategy, Bad Strategy is written from a secular business perspective, with strategic advice that assumes a profit motive and a competitive environment. Just as in the case of vision and mission, the distinction between business strategy and non-profit strategy makes some of Rumelt’s advice less applicable, particularly in discussions of utilizing competitive advantage to beat other organizations in the same market. However, many insights are still applicable and helpful. For example, non-profit organizations can be very prone to incomplete strategy that is satisfied with general principles and goals, that fails to adequately research the context and challenges for the organization, or that is unwilling to make the hard decisions that good strategy demands. In his discussion of deliberate design, he notes that organizations that have sustained abundant resources can become complacent and blinded to the need for change. “The peril of a potent resource position is that success then arrives without careful ongoing strategy work,” which can lead to stagnation (136). This can easily become a problem for churches which have maintained their position due to early success and fail to see and implement needed strategic changes.

In ministry strategy, this book can be helpful in several ways. Rumelt’s admonitions of bad strategy are as effective a warning for the church as they are for businesses. Churches and the ministries they shepherd must avoid high-level platitudes and goals without street-level application. Instead, they should do the hard work of examining the situation clearly, determining challenges and potential opportunities, making decisions for methods to address these challenges, and formulating detailed and practical step-by-step plans to execute these methods. In addition, ministries must resist the inertia and reliance on past success that can so easily blind them to the need for change and, instead, consider and anticipate what challenges and opportunities are forming and how to address them. Finally, while some of the tools that Rumelt describes in part two of the book are less applicable to the church context, churches can still use several tools such as anticipating opportunities arising from changing culture and technology (97-98, 193-198), building “proximate goals” that are practical and reachable towards larger objectives (106, 109, 111), or recognizing and focusing on the weakest part of interconnected ministries (116-117).