Richard Rumelt, author of Good Strategy/Bad Strategy: The Difference and Why it Matters, opened CEO/Executive Team Network in Nashville this week with a discussion of strategy—and what it is not.
Bad strategy is not simply a strategy that doesn’t work, he said. It’s not a miscalculation.
You will know something is bad strategy if:
- It’s just fluff, like “we will strive for customer-centric intermediation.” (What does that even mean?)
- It’s just a bunch of financial targets;
- The actions are incoherent; or
- It’s an aspiration without a diagnosis of a problem. “If you don’t know what the problem is you can’t solve it,” said Rumelt, the Harry and Elsa Kunin Professor of Business & Society at UCLA Anderson.
“Another sign of a bad strategy is what I call a dog’s dinner”—a cooking mishap best left to your pet—he said. He shared an example of the “strategy” for a city in the Pacific Northwest. This city had 47 strategies and 178 action items. Action item number 122 was “develop a strategy plan.”
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