Good Strategy-Bad Strategy: Post #6 The Kernel

The Kernel of a Good Strategy: “Good strategy is coherent action backed by argument, an effective mixture of thought and action with a basic understanding of what I call the kernel.” For Rumelt, the kernel consists of three key elements: 1) A diagnosis—a simplified explanation of the issue or challenge being faced; 2) a guiding policy—an overall approach to face the obstacles identified; and 3) a set of coherent actions—focused actions to implement the guiding policy.

Good Strategy-Bad Strategy: Post #5--Why?

Why So Much Bad Strategy? To answer this question the author points to three problems. 1) The unwillingness or inability to choose. To create a coherent plan to execute a strategy, you have to say yes to some things, but just as often you must say “no” to others. This gets very hard when executives have pet projects and/or resources they are loathe to give up in service of a new strategy. Unless it’s a dire state, the status quo wins every time. The “If it ain’t broke don’t fix it” philosophy compelled people in Detroit to keep making big cars long after things changed, but no one could see it or wanted to react to it. 2) Template-Style Strategy: Here Rumelt does a frontal assault on the typical vision-mission-values-strategy templates used by so many consultants with companies, churches, government agencies and nonprofits. One example he uses to show the futility of this approach is Enron’s values: “Respect, Integrity, Communication and Excellence!” He says: “…template-style strategy frees them from the onerous work of analyzing the true challenges faced by the client.” Thus, by couching issues in the more positive terms of this model, people can avoid the very difficult issues so no feelings are hurt. 3) New Thought: For ages, people have subscribed to the notion that you get what you think about. Rumelt beats up on this idea by offering the fact that we also have to think about not-so-happy thoughts if we want to vet a workable strategy.

Good Strategy-Bad Strategy: Post #4--Bad Strategy

Bad Strategy. Rumelt uses the Iraq invasion under the leadership of George W. Bush as an example of bad strategy. Note that Rumelt could have just as easily used Lyndon Johnson’s entrance into Vietnam as an example. Thus, this is not a disease of any one political party. But having followed faulty, under-vetted intelligence in both cases (Iraq and Vietnam), the U.S. ran headlong into two wars without a coherent policy. The results of such a lack of coherence cost both physical and psychological wounds, as well as a king’s fortune to wage two unnecessary wars. The costs of both wars in terms of death, pain, suffering, loss of national stature and economics have been staggering. Rumelt discusses a number of factors that can lead to such short sightedness and misdirection: Fluff, using indefinite language and strategic buzzwords; failure to face the challenge by not properly identifying real obstacles; mistaking goals for strategy by focusing on numbers, not real challenges; bad strategic objectives based on a disconnect between goals and strategies. On the other hand, a good strategy leverages a company’s strengths to overcome an obstacle to get to its vision.