Good Strategy, Bad Strategy | Richard Rumelt

Rumelt distinguishes familiar analytical tools from the work of choosing how to deal with a challenge. Tools can help you understand the situation, but a diagram is not an action. Ask what decision the analysis supports and what the team will do differently.

He describes diagnosis as deciding what to pay attention to and forming an explanation of how the situation works. Reality is more complex than a simple matrix. Make the working hypothesis explicit so others can test whether it explains the problem.

In his strategy kernel, a guiding policy says how to address the diagnosis, and coherent actions put it into practice. A long list of wishes is not that policy. Check that the actions support the chosen approach and do not work against one another.

His magnifying-glass example connects a source of power, focus and a target that can actually be affected. Spreading effort across too many different ambitions weakens that focus. Choose an important problem where the resources you have can make a difference.

Rumelt says an advantage often comes from something different about your knowledge, timing, relationships or assets. Being first to recognize a change can matter. Name a real strength relative to the situation instead of relying on confidence or a broad ambition.

He describes reputation and customer relationships as sources of power, while noting that an established identity can limit what people expect of you. His IBM example is his account, unverified here. Review whether an inherited strength still fits the problem you now face.

Borrowing from climbing, Rumelt calls the hardest part of a business problem its crux. Focusing there can reveal a way through the competing constraints. If that part cannot be addressed, reconsider the approach instead of adding more easy activities around it.