Spotting Bad Strategy
Four tells that a 'strategy' is actually empty: no diagnosis, goals-as-strategy, fluff, and incoherent actions.
- Difficulty
- Easy
- Time to result
- ~days to results
- Steps
- 4
- Confidence
- 92%
Rumelt's diagnostic for recognizing when a document or plan calling itself a strategy is hollow. The two major sources are a missing diagnosis and mistaking a set of goals for strategy; two lesser ones are fluff (word salad) and self-contradicting actions. Learning to detect these prevents wasted effort and the sense of sitting through meaningless 'strategy' meetings.
Origin
Richard Rumelt, from the 'bad strategy' chapters of 'Good Strategy Bad Strategy' (2011), which many readers said finally named what they were experiencing in corporate strategy meetings.
Core principles
- 01A set of profit or performance goals is not a strategy, it is the engineering of how a company runs
- 02Ambitions and a list of everything you wish would happen are not strategy
- 03Fluff uses fancy, abstract words to seem more strategic while saying nothing
- 04Incoherent actions pursue A and B when the two obviously fight each other
- 05Lacking a diagnosis is the single biggest reason strategies are bad
How to run it
- 1
Check for a real diagnosis
Ask whether the document explains WHY the situation is the way it is, or just states a fact. 'The US is falling behind in education' is a fact; a diagnosis would explain the cause.
Pro tip If the plan jumps straight from a symptom to a solution (falling test scores to 'send more people to college'), the diagnosis is missing.
Watch out A correct factual statement can masquerade as a diagnosis; demand the causal 'why.'
- 2
Check whether goals are standing in for strategy
See if the 'strategy' is really a set of abstract high-level profit or performance goals. Goals are necessary but leave out diagnosis, policy, and action.
Pro tip 'We're going to grow faster' is a statement of values, not a strategy.
- 3
Scan for fluff
Look for word salad: abstract, fancy language used to make an ordinary situation sound more strategic than it is.
Pro tip If removing the buzzwords leaves nothing concrete, it was fluff.
- 4
Test actions for coherence
Check that the proposed actions do not contradict each other or the diagnosis.
Pro tip List each action next to the others and ask if any pair works against another.
Watch out Rumelt notes fluff and incoherent actions are fun to describe but less common than the first two failures.
In the wild
Asked to help part of the US Department of Defense craft a strategy across 17 intelligence agencies, Rumelt found the written strategy was simply that the agencies 'should work together more effectively' — an office of coordination with a coordinator, but no analysis of why coordination had been hard for 34 years.
→ The 'strategy' merely restated the problem as its solution, with no diagnosis of the barriers, so nothing changed.
Rumelt cites a President who correctly observed US 15-year-olds ranked low on PISA math scores, then jumped immediately to sending more people to college.
→ More college does not fix 15-year-olds who cannot do elementary math; the missing diagnosis produced a non sequitur action.
Common mistakes
Restating the problem as the solution
Saying 'we will coordinate better' when the problem is poor coordination adds no strategy; it names the gap without diagnosing or closing it.
Confusing ambition with strategy
'We want to grow faster' expresses a desire; it says nothing about what is holding you back or what you will do.
Is it for you?
Best for
Anyone reviewing or auditing a strategy document who needs a fast checklist to tell substance from theater
Not ideal for
Early brainstorming where premature critique would shut down exploration of options
From the transcript
“the standard bad strategy for a corporation is a set of profit goals or performance goals”
“bad strategy also is fluff people will use fancy words to describe their situation”
“lacking diagnosis is one of the key reasons for bad”
“mistaken goals for strategy”
From the episode
Good Strategy, Bad Strategy
Richard Rumelt