Talha Mumtaz ✔️'s Key Ideas from Good Strategy Bad Strategy
by Richard Rumelt

Good strategy boils down to three essential components: a clear diagnosis of the situation, a guiding policy to address the challenges, and coherent actions to implement the policy. These form what Rumelt calls the “kernel” of good strategy.

“A good strategy begins with diagnosing the problem and designing a solution that moves the needle.”

A strategy is only as good as the diagnosis behind it. Understanding the problem clearly is essential for crafting a strategy that effectively addresses it. Without a solid diagnosis, a strategy is merely guesswork.

“Diagnosis is the first step—without it, you’re solving the wrong problem.”

A guiding policy provides a framework for how to approach the problem. It is the central idea that shapes and directs all efforts. This policy should align with the company’s goals and take the diagnosis into account.

“The guiding policy sets the course, helping to align actions toward a common objective.”

Good strategy is about translating a guiding policy into a set of coordinated and coherent actions. These actions must be practical and work together to move the organization toward its goals.

“Coherent actions are what bring strategy to life—without them, a strategy remains theoretical.”

Bad strategy often disguises itself with buzzwords, vague goals, and wishful thinking. It lacks focus, avoids confronting challenges, and offers little direction. Recognizing bad strategy helps avoid wasted effort and resources.

“Bad strategy is not the absence of strategy, but the presence of fluff, confusion, and unclear priorities.”

Good strategy focuses on the most critical issues that need to be addressed. It involves making tough choices about what to prioritize and what to ignore. Focus brings clarity and increases the chances of success.

“A good strategy is laser-focused on what matters most—it doesn’t try to solve everything at once.”

Leverage refers to focusing your efforts on areas where the most impact can be made. Good strategy identifies where small, focused actions can lead to big results, maximizing available resources.

“Leverage is about finding the high points where small efforts lead to disproportionate gains.”

Fluff in strategy is the use of vague language and empty slogans that sound good but say little. Avoiding fluff means being precise, clear, and actionable in defining goals and policies.

“Fluff is the enemy of good strategy—it obscures clarity and distracts from meaningful action.”

Strategy is ultimately about solving problems. Good strategists approach challenges with a problem-solving mindset, breaking down complex issues into manageable parts and addressing them systematically.

“Good strategy is about finding and solving the core problems that block success.”

In a rapidly changing environment, even the best strategy needs to be adaptable. Being flexible and willing to adjust the strategy as new information comes in is key to long-term success.

“Adaptability is critical—strategy isn’t static; it evolves with changing circumstances.”