Five Criteria: Good Strategy vs. Bad Strategy

Saturday, March 24, 2012 | comments

The book: Good Strategy/Bad Strategy: The Difference and Why It Matters, by Richard P. Rumelt well articulated the most basic idea of strategy which is the application of strength against weakness. Focus on one or two critical issues in the situation—the pivot points that can multiply the effectiveness of effort—and then focuses and concentrates action; from leadership perspective, an important duty of any leader is to absorb a large part of that complexity and ambiguity, passing on to the organization a simpler problem—one that is solvable.

What are the kernel of good strategy, why are so many bad strategy? Here are five criteria:

1.      The Three Essential Elements of Strategy:

A good strategy has an essential logical structure that being called the kernel, The kernel of a strategy contains three elements:
1) A diagnosis of the situation
2) The choice of an overall guiding policy
3) The design of coherent action

2. The Core of Strategy:

Discover the critical factors in a situation and design a way of coordinating and focusing actions to deal with those factors. a bad strategy that tries to cover all the bases rather than focus resources and actions. A strategy that fails to define a variety of plausible and feasible immediate actions is missing a critical component

3.   Key Difference between Good Strategy & Bad Strategy:

 A good strategy honestly acknowledges the challenges being faced and provides an approach to overcoming them,  a bad strategy tends to skip over pesky details such as problems, also ignores the power of choice and focus. Strategy must contain action.

4.      A good strategy is unexpected.

An insightful reframing of a competitive situation can create whole new patterns of advantage and weakness. The most powerful strategies arise from such game-changing insights.  Good strategy requires leaders who are willing and able to say no to a wide variety of actions and interests. Strategy is at least as much about what an organization does not do as it is about what it does.


5.      Three-Step Strategy Making:

1) Figuring out the nature of the business challenge
2) Designing a guiding policy that produces an advantage
3) Creating a set of coordinated actions to carry out that policy.

The contemporary business world and global history that clearly show how to recognize the good, reject the bad, and make good strategy a living force in your organization

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