1.	The Kernel: Good strategy includes a clear diagnosis, guiding policy, and coherent actions.	2.	Diagnosis: Understanding the problem is the first step.	3.	Guiding Policy: Defines how to approach and solve the problem.	4.	Coherent Actions: Translate the policy into practical steps.	5.	Bad Strategy: Avoid vague goals and fluffy language.

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.”

The Power of Focus In Strategy

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.”

Strategy as Problem Solving

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.”

The Kernel of Good Strategy

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.”

The Role of Leverage

Good strategy works by focusing energy and resources on one, or a very few, pivotal objectives whose accomplishment will lead to a cascade of favorable outcomes.

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.”

The Importance of Adaptability

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.”

The Importance of Diagnosis

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.”

Defining a Clear Guiding Policy

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.”

Crafting Coherent Actions

6.	Focus: Prioritize the most critical issues to address.	7.	Leverage: Focus efforts where they will have the greatest impact.	8.	Avoid Fluff: Be precise and clear in your strategy.	9.	Problem Solving: Approach strategy with a problem-solving mindset.	10.	Adaptability: Be willing to adjust the strategy as conditions change.

1.	The Kernel of Good Strategy	2.	The Importance of Diagnosis	3.	Defining a Clear Guiding Policy	4.	Crafting Coherent Actions	5.	Identifying Bad Strategy	6.	The Power of Focus in Strategy	7.	The Role of Leverage	8.	Avoiding the Pitfalls of Fluff	9.	Strategy as Problem Solving	10.	The Importance of Adaptability

Topics That Will Make You A Better Strategist Today

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.”

Identifying Bad Strategy

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.”

Avoiding the Pitfalls of Fluff

Learn the secrets to crafting effective strategies and avoiding common pitfalls with *Good Strategy Bad Strategy*.

Good Strategy/Bad Strategy clarifies the muddled thinking underlying too many strategies and provides a clear way to create and implement a powerful action-oriented strategy for the real world.   Developing and implementing a strategy is the central task of a leader. A good strategy is a specific and coherent response to—and approach for—overcoming the obstacles to progress. A good strategy works by harnessing and applying power where it will have the greatest effect. Yet, Rumelt shows that there has been a growing and unfortunate tendency to equate Mom-and-apple-pie values, fluffy packages of buzzwords, motivational slogans, and financial goals with “strategy.” In Good Strategy/Bad Strategy, he debunks these elements of “bad strategy” and awakens an understanding of the power of a “good strategy.” He introduces nine sources of power—ranging from using leverage to effectively focusing on growth—that are eye-opening yet pragmatic tools that can easily be put to work on Monday morning, and uses fascinating examples from business, nonprofit, and military affairs to bring its original and pragmatic ideas to life. The detailed examples range from Apple to General Motors, from the two Iraq wars to Afghanistan, from a small local market to Wal-Mart, from Nvidia to Silicon Graphics, from the Getty Trust to the Los Angeles Unified School District, from Cisco Systems to Paccar, and from Global Crossing to the 2007–08 financial crisis. Reflecting an astonishing grasp and integration of economics, finance, technology, history, and the brilliance and foibles of the human character, Good Strategy/Bad Strategy stems from Rumelt’s decades of digging beyond the superficial to address hard questions with honesty and integrity.

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Richard Rumelt is an accomplished writer whose work has resonated with readers around the world. Richard Rumelt has published several books that explore a range of topics, from fiction to nonfiction, and has received critical acclaim for the ability to weave compelling narratives. Richard Rumelt's writing style is known for its depth and authenticity, and has earned quite a loyal following of readers.

RICHARD RUMELT

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Sources of Power

ROY BAUMEISTER

Good and Bad Strategy