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The Central Lesson In Rumelt’s Book
Any successful business organization, government, army or sports’ team needs a strategy to survive the competition in its field. In business, the success of a company depends on the strategy it uses in its operations. Therefore, managers responsible for designing strategies must have good plans for implementing their strategies. According to Rumelt, many people still have conventional thoughts about strategies (8).
For example, some people believe they must describe strategies using big terminologies to make them sound appropriate. He refers to such strategies as tactics by CEOs to hide their inability to solve problems in their organizations. He also argues that a good strategy must have three stages: diagnosis, goal setting, and the implementation plan. He criticizes most CEOs for developing strategies that cannot achieve the goals of their organizations (Rumelt 9).
According to him, such strategies lack implementation formulas. Hence, they are not strategies but mere objectives. He says, “… the term strategy should mean a cohesive response to an important challenge…Unlike a stand-alone decision or goal” (Rumelt 9). Rumelt believes that a good strategy comes up when no one expects it (15).
Managers design it when there is a crisis. He advises strategists to diagnose problems, set objectives and develop steps that can appropriately solve their problems. This process will help them develop good strategies for their companies.
Central pillars in the discussion
There are several lessons from Rumelt’s argument. He teaches managers that strategies do not have to be complex. Rumelt criticizes the common practice of using big terms in describing strategies. He condemns leaders who describe their strategies using very big words yet they lack other crucial aspects of strategy. He says, “…yet we have become so accustomed to strategy as exhortation that we hardly blink an eye when a leader spouts slogans and announces high-sounding goals a strategy” (Rumelt 6).
Some leaders make the process of launching a strategy look difficult. For example, they take their employees out for strategy retreats. According to Rumelt, big words and retreats are unnecessary in strategizing (8). He believes that a strategy does not have to be complex. The most important element of the strategy is its ability to devise the best way to achieve the goals of the organization. Therefore, the framing of a strategy is not as important as its ability to achieve the objectives of the organization.
The second lesson from Rumelt’s discussion is that strategies must have goals and the steps for attaining them. Rumelt argues that many organizations state their strategies as abstract statements with no specific actions for attaining them (Rumelt 10). According to him, such statements are “high-sounding goals” and not strategies (Rumelt 6). The organization should carry out a diagnosis whenever there is a crisis to determine the cause of the problem.
The diagnosis should then help the managers in designing the objectives. The objectives should help the managers in designing the steps for accomplishing their objectives. Haphazard formulation of objectives and action-plans may worsen the problem instead of dealing with it. Rumelt also argues that managers should participate in the implementation of the steps they design for the achievement of their objectives. He criticizes CEOs who delegate the implementation of their strategies (Rumelt 9).
Managers also learn from Rumelt’s discussion that strategies involve creativity. Decision-makers in an organization must be creative whenever crises occur. According to Rumelt, good strategies are unexpected (9). Managers create strategies when they realize they need them. The examples Rumelt gives clearly demonstrate the unexpectedness of strategy. One of the examples shows how Steve Jobs revived the Apple Company by accepting to make it smaller than it was. In the next example, General Norman Schwarzkopf defeated the Iraqi army when everybody was expecting him to lose (Rumelt 11).
Knowing the strengths and weaknesses of the organization can also help the managers in developing good strategies. The example of David and Goliath in Rumelt’s book teaches people that they can turn their weaknesses into strengths. It also warns people against having preconceptions about their strengths and weaknesses. They should test their strengths and weaknesses against their competitors before drawing conclusions.
The book’s impact on the future manager
This book will have a great impact on future managers. It will teach them the correct meaning of strategy. Many managers still have conventional ideas about strategy. They believe that strategy must be difficult to understand.
Rumelt’s ideas will help improve managerial skills. Managers will be able to diagnose problems, formulate objectives and develop good plans for their companies. They will understand that strategy is not only about state policies. They will also be able to analyze the problems their organizations face before developing objectives that can help them solve the problems. They will then easily design step-by-step plans to handle the problems.
The managers will also participate in the implementation of the steps they design. Rumelt warns managers against delegating the implementation of their strategies to their junior officers. The managers who will read this book will be part of the implementation team from the first step to the last one.
Therefore, they will be ready to take all the risks that come with the strategies they have. Rumelt demonstrates the risks that managers face when implementing their strategies using the Battle of Trafalgar. Nelson Viscount died while fighting Napoleon’s army.
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Future managers will also learn to use their weaknesses and strengths in designing good strategies for their companies. They will not form opinions about their strengths and weaknesses before testing them against their competitors. Rumelt’s discussion teaches managers that they can turn their weaknesses into strengths.
Therefore, they will be able to work on their weaknesses and turn them into strengths. They will also know how to take advantage of their competitors’ weaknesses in beating them just as David realized that Goliath’s helmet could not cover his entire face. In addition, the managers will know how to overcome crises by coming up with creative ways of dealing with them. According to Rumelt, managers should take advantage of crises in designing working strategies for their companies. He insists that good strategies are unexpected.
A good strategy does not need to use sophisticated terminologies. It only needs to be practical. Therefore, it must have steps that show how to achieve set objectives. Many strategies that use an elevated language are inappropriate since they evade solving problems. They hide their weaknesses in the language they use. Most of the time, they only impress rather than solve the problems the organization faces.
Rumelt proposes three important steps that managers should follow when coming up with strategies. They need to carry out a diagnosis and state their objectives depending on the results of the diagnosis. They should then come up with plans for attaining their objectives. They must also know their strengths and weaknesses before formulating good strategies. The strength and weaknesses help in the formulation of appropriate objectives. The strategists should also take part in the entire process of implementing their strategies. They should not delegate the implementation to their juniors.
Rumelt, Richard P. Good Strategy, Bad Strategy. New York: Crown Business, 2011. Print.