Many modern leaders have problems with identifying challenges experienced in the organization and with addressing them with the help of effective strategies. The problem is in the fact that leaders often misunderstand the meanings of such a concept as ‘strategy’. This idea is stated and developed in Richard Rumelt’s book Good Strategy, Bad Strategy: The Difference and Why It Matters published in 2011.
In his book, the author describes what strategies can be discussed as good or bad, what signs are characteristic for these strategies, what driving forces influence the leaders’ success, and what examples of good and bad strategies are presented in the modern business world (Rumelt 10).
Following Rumelt’s main ideas presented in the book, it is important to state that good strategies always have the ‘kernel’ that is the strategy’s structure including such components as a diagnosis, a guiding policy, and actions; and good strategies are always the result of identifying the power to overcome the problem in the organization.
Rumelt’s book consists of three parts in which an author discusses differences between bad and good strategies, describes sources of the power to support the advantage, and analyses the aspects of strategists’ thinking. Rumelt starts the book with defining the concept of ‘strategy’ that is usually used by leaders inappropriately. According to Rumelt, leaders often discuss their goals as strategies, but this approach is not right.
Rumelt explains this idea in his book: “Unlike a stand-alone decision or a goal, a strategy is a coherent set of analyses, concepts, policies, arguments, and actions that respond to a high-stakes challenge” (Rumelt 6). As a result, misconceptions lead to developing poor strategies in order to overcome challenges. Thus, a strategy is a plan of actions to address the challenge in the organization. Having defined a strategy, Rumelt proposes signs to identify bad and good strategies.
From this point, bad strategies grow out of ‘leadership dysfunctions’ and have characteristic marks. The first feature is the fluff as the use of ‘abstruse’ words. The second feature is a failure to face the problem or the challenge. The third feature is the focus on goals and leaders’ desires rather than on strategies.
The final sign is the focus on bad strategic objectives that are ineffective to address critical issues related to the organizational challenge (Rumelt 32). The mentioned hallmarks are discussed by Rumelt as the critical aspects to influence the effectiveness of leaders’ actions while developing and implementing a strategy.
Having analyzed the signs of the bad strategy, Rumelt introduces the notion of the strategy’s ‘kernel’ as the basic in the book. The author provides a discussion of important steps necessary to be taken by leaders to develop a good strategy. The first element of the ‘kernel’ is a diagnosis that is based on determining the aspects of the business challenge. The second element or step is the development of the guiding policy as a complex of rules and guidelines effective to address the identified challenge.
The final significant step is the development of coordinated actions to make necessary changes. These actions should be specific to overcome a certain challenge (Rumelt 78). It is important to state that discussing these elements, Rumelt pays attention to the necessity to avoid the traditional discussion of issues while developing the really effective plan of actions for the concrete situation regardless the conventional thought.
The next important idea discussed by the author in the book is the notion of ‘power.’ According to Rumelt, a good strategy “works by harnessing the power and applying it where it will have the greatest effect” (Rumelt 95). The author discusses the sources of the power in detail while supporting the whole third part of the book with numerous cases and examples. To discover the power, it is necessary to focus on “new sources of strength and weakness” (Rumelt 21).
While focusing on these new sources, a leader can discover a successful power that can be associated with leverage, design, dynamics, advantage, growth, chain-link systems, focus, inertia and entropy, and proximate objectives (Rumelt 97). It is possible to state that the most interesting source of power identified by Rumelt is proximate objectives.
According to the author, “a proximate objective names a target that the organization can reasonably be expected to hit, even overwhelm” (Rumelt 106). Rumelt proposes leaders to revise their approach to setting goals to respond to the requirements of good strategies. Thus, the final part of the book provides recommendations on how to develop the strategist’s way of thinking to be able to contribute to the organization’s advantage.
In his book Good Strategy, Bad Strategy, Richard Rumelt provides effective guidelines for modern leaders to implement successful strategies in their organizations. The strength of the book is the focus on the most important concepts in the discussion of strategies in order to avoid misconceptions.
Rumelt’s arguments are supported with many case studies that provide the necessary insight in the discussion of the problem of leaders’ strategic thinking. The author’s guidelines are written in a friendly tone. As a result, the book can be discussed as helpful to be used by leaders oriented to developing effective strategies.
Works Cited
Rumelt, Richard. Good Strategy, Bad Strategy: The Difference and Why It Matters. New York: Crown Business, 2011. Print.