Good Strategy/Bad Strategy

Think of the last time you saw a company's 'strategic plan.' It was likely a glossy document filled with ambitious goals, feel-good mission statements, and a laundry list of initiatives. Everyone nodded along in the meeting, and the document was celebrated as a roadmap to success. Yet, this entire ritual, common from the Fortune 500 boardroom to the local nonprofit, is a sophisticated form of make-believe. The very documents we create to guide us are often the primary reason we get lost. We mistake a list of desirable outcomes for a coherent plan of action, confusing the destination with the directions. This is a fundamental misunderstanding that allows poor performance to hide in plain sight, disguised as ambitious thinking.

This widespread confusion is what drove Richard Rumelt to diagnose the problem. A seasoned consultant and professor at UCLA's Anderson School of Management, Rumelt spent decades observing this pattern firsthand. He saw brilliant leaders present what they called 'strategy' but which was, in reality, a collection of disconnected goals, slogans, and buzzwords. He realized that the business world lacked a clear, shared language for what strategy actually is. His work was born from the urgent need to expose the pervasive and damaging fluff that passes for strategy, and to replace it with a clear, powerful framework for creating genuine competitive advantage.

Module 1: The Hallmarks of Bad Strategy

Before we build good strategy, we have to learn to spot the bad. Bad strategy is a specific kind of intellectual laziness. And it has four clear tells.

First, bad strategy is full of fluff. It uses inflated, abstract language to create the illusion of expertise. Think of phrases like "customer-centric intermediation" from a bank. That just means "being a bank." Or a vision "to be the most respected and successful company." These are empty platitudes. They sound impressive but offer zero guidance on what to do. Fluff is a red flag. It signals that the author either doesn't know what to do or is trying to hide that fact.

Next, bad strategy fails to face the real challenge. A strategy is a response to a problem. If you haven't defined the problem, you can't create a solution. In 1979, International Harvester was in deep trouble. Its strategic plan talked about market share and cost cuts. But it completely ignored the elephant in the room: terrible labor relations and inefficient factories. The company collapsed because its strategy avoided the one challenge that truly mattered.

This leads to the third hallmark. Bad strategy mistakes goals for strategy. A CEO might announce a "20/20 plan" for 20% growth and 20% margins. That's a wish list. It says what you want, but not how you will get there. Strategy is the "how." It’s the coherent plan for overcoming obstacles to achieve a goal. Simply stating the goal and telling people to "reach for the impossible" is an abdication of leadership.

Finally, bad strategy has bad strategic objectives. This comes in two flavors. The first is the "dog's dinner." It's a long, messy list of everything the organization could possibly do. One school district's plan had 47 strategies and 178 action items. One of those action items was "create a strategic plan." This is a scattergun approach that guarantees nothing important gets done. The second flavor is the "blue-sky objective." This is a goal so lofty and disconnected from reality that it's just a restatement of the challenge. A plan to "build transformational leadership" without diagnosing why leadership is weak is just blue-sky thinking. It’s an unactionable objective.