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What makes good business strategy?

The world of company strategy development is fertile ground for those of us who like management models.  The options range from simple – nay simplistic, to byzantine complexity.

However, I would argue that few of these strategic tools can ever determine a strategy for your business – what the best tools can do is give you insights into the strategic context, or help you explore the potential consequences of a possible strategic decision.

Good Strategy / Bad Strategy

In a new book, Professor Richard Rumelt of the UCLA Anderson School of Management, describes what he terms ‘bad strategy’.  He has been articulating his ideas for several years now, and you can get a five minute introduction to his ideas from the short video interview from 2008, below.


Professor Rumelt’s ideas are simple and compelling – indeed, one of his key points is that a good strategy is, itself, simple and compelling.

A Good Strategy

In Good Strategy/Bad Strategy: The difference and why it matters, Rumelt argues that a good strategy:

  • is based on a robust diagnosis of the situation and the problem to be solved
  • offers a simple solution to a problem – ‘simple’ meaning no more complex than it needs to be: not simplistic
  • follows a clear policy framework that provides constraints for the strategy
  • allows participants to co-ordinate their actions and to create a focused outcome

A Bad Strategy

A bad strategy, on the other hand,

  • fails to address the real problem
  • sets goals but makes no attempt to articulate how to achieve them
  • has a vast array of objectives with little prioritisation
  • hides poor analysis inside jargon, buzzwords and superficial analysis

You can hear Professor Rumelt for yourself or read his article ‘The Perils of Bad Strategy’.


Good Tools

With Professor Rumelt’s warnings ringing in our ears, we need to understand some of the tools we can use to inform our robust diagnosis and clear solutions.  We’ll start taking a look at these next week…

In the meantime,

Some Management Pocketbooks you might like.

The Strategy Pocketbook

Neil Russell-Jones’ Strategy Pocketbook is stuffed full of handy tips and strategy planning tools.

Also take a look at:

The Business Planning Pocketbook

The Nurturing Innovation Pocketbook

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One thought on “What makes good business strategy?

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