Saturday, 16 November 2013

Good Strategy Bad Strategy – Richard P. Rumelt 2011

 “bad strategy covers up its failure to guide by embracing the language of broad goals, ambition, vision and values.” (Rumelt, 2011, p.5).

 “A good strategy does more than urge us forward toward a goal or a vision. A good strategy honestly acknowledges the challenges being faced and provides an approach to overcoming them.” (Rumelt, 2011, p.4).

“The most basic idea of strategy is the application of strength against weakness. Or, if you prefer, strength applied to the most promising opportunity.” (Rumelt, 2011, p.9).

During the first Iraq war: the cost to invade Kuwait and face the Iraqi troops head on they estimated 2000 dead and 8000 wounded. “Schwarzkopf rejected this approach in favour of a two-pronged plan. Air attacks would be used to reduce the Iraqi capabilities by 50 percent. Then he planned a massive secret “left hook”. While the world’s attention was focused on CNN’s 24/7 coverage of troops just south of Kuwait, the coalition would secretly shift a force of 250,000 soldiers well west of Kuwait. (…) The U.S. Marines ground forces were ordered to move slowly northward into Kuwait, a ploy to entice the entrenched Iraqis southward and out of their fortifications, where they would be hit from the side by part of the massive left hook.” (Rumelt, 2011, p.17).

“The best answer to this puzzle is that the real surprise was that such a pure and focused strategy was actually implemented. Most complex organizations spread rather than concentrate resources, acting to placate and pay off internal and external interests.” (Rumelt, 2011, p.19).

“”Our defense planning,” he said, “had become driven by the annual budgeting process.” (…) “This process of justifying expenditures as counters to Soviet expenditures conditioned U.S. actions on Soviet strength, expressed as threats, not on Soviet weaknesses and constraints.” (Rumelt, 2011, p.28).

 “The basic problem is confusion between strategy and strategic goals.” (Rumelt, 2011, p.34).

“Bad strategy, I explained, is not the same as no strategy or strategy that fails rather than succeeds. (…) Bad strategy is long on goals and short on policy or action.” (Rumelt, 2011, p.36).

“Motivation is an essential part of life and success, and a leader may justly ask for “one last push”, but the leader’s job is more than that. The job of the leader is also to create the conditions that will make that push effective, to have a strategy worthy of the effort called upon.” (Rumelt, 2011, p.49).

“channeling energy into what seem to be one or two of the most attractive opportunities.” (Rumelt, 2011, p.49).

“The second form of bad strategic objectives is one that is “blue sky”. A good strategy defines a critical challenge. What is more, it builds a bridge between that challenge and action.” (Rumelt, 2011, p.54).

“Good strategy is coherent action backed up by an argument.” (Rumelt, 2011, p.76).

 “There was no way to establish that this particular guiding policy was the only good one, or the best one. But, absent a good guiding policy, there is no principle of action to follow.” (Rumelt, 2011, p.87).

“In very general terms, a good strategy works by harnessing power and applying it where it will have the greatest effect.” (Rumelt, 2011, p.95).

“A pivot poin magnifies the effect of effort.” (Rumelt, 2011, p.102).

 “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.” (Rumelt, 2011, p.111).

“Chain-link systems can be changed and made excellent. It takes insights into the key bottlenecks.” (Rumelt, 2011, p.121).

“A fundamental ingredient in a strategy is a judgement or anticipation concerning the thoughts and/or behaviour of others.” (Rumelt, 2011, p.128).

“You must press where you have advantages and side step situations in which you do not.” (Rumelt, 2011, p.161).

“The silver machine’s advantage gives it value, but the advantage isn’t interesting because there is no way for an owner to engineer an increase in value.” (Rumelt, 2011, p.168). “a competitive advantage is interesting when one has insights into ways to increase its value.” (Rumelt, 2011, p.168).

Brand/Product “Extensions based on proprietary know-how benefit from the fact that knowledge is not “used up” when it is applied; it may even be enhanced. By contrast, extensions based on customer belief, such as brand names, relationships, and reputation, may be diluted or damaged by careless extension.” (Rumelt, 2011, p.172).

Walt Disney: “To appreciate the magnitude of this advantage, note that no other film company is able to pull viewers to its movies by its brand name alone.” (Rumelt, 2011, p.172).

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