In a world flooded with mission statements, bold visions, and endless buzzwords, few leaders can clearly explain what their strategy actually is.
In Good Strategy Bad Strategy, Richard Rumelt delivers a refreshing, and at times brutal, truth: most so-called strategies are little more than wishful thinking. What separates successful companies, teams, and leaders isn’t ambition or charisma; it’s clarity, focus, and the courage to make hard choices.
First published in 2011, the book has become a modern classic in business and management circles because it cuts through the noise and redefines what strategy really means. Rumelt doesn’t just describe good strategy; he dissects bad ones with precision, showing how vague goals, empty slogans, and poor diagnosis can derail even the most promising ventures.
Whether you’re a founder, CEO, or team leader, Good Strategy Bad Strategy will challenge how you think about competition, growth, and execution.
Overview
At its core, Good Strategy Bad Strategy is a call to return to the fundamentals of strategic thinking. Richard Rumelt argues that true strategy is not about setting lofty goals or chasing every opportunity; it’s about identifying the critical challenges your organization faces and designing a coherent plan to overcome them.
Rumelt introduces what he calls the kernel of good strategy, made up of three essential components:
- Diagnosis: Defining the nature of the challenge. This step requires clarity and honesty about what’s really holding the organization back.
- Guiding Policy: Creating an overall approach to deal with the challenge. It’s not a list of tasks; it’s the logic behind your actions.
- Coherent Actions: Laying out a set of coordinated steps that align with the guiding policy and directly address the diagnosed problem.
What makes Rumelt’s perspective so powerful is his insistence that good strategy is as much about what you don’t do as what you do. He highlights that bad strategy often arises from a failure to make choices when leaders try to please everyone, pursue every opportunity, or mask problems with inspirational language.
The book blends real-world examples from companies, militaries, and governments to show how good strategy looks in action. From Apple’s turnaround under Steve Jobs to the military maneuvers of WWII, Rumelt illustrates how focus and insight, rather than resources or rhetoric, create meaningful advantage.
Ultimately, Good Strategy Bad Strategy reminds us that strategy isn’t about predicting the future; it’s about creating a path through uncertainty. It’s a discipline of thinking clearly, choosing deliberately, and aligning every effort around what truly matters.
Key Takeaways From “Good Strategy Bad Strategy”
Good Strategy Starts with Diagnosis
A good strategy begins by clearly defining the problem. Rumelt emphasizes that leaders must confront reality and identify the key obstacles standing in the way of success.
Without a solid diagnosis, every decision becomes guesswork. The best strategies stem from a deep understanding of what’s really going on inside the business and the environment around it.
Focus Is Power
Good strategy is not about doing more; it’s about doing less, better. Rumelt argues that real strategic power comes from focus: concentrating resources and energy on a few critical objectives rather than spreading efforts thin. This discipline allows teams to create leverage and build momentum in areas that truly matter.
The Kernel of Good Strategy
The “kernel” is Rumelt’s framework for building effective strategy:
- Diagnosis – Understanding the challenge.
- Guiding Policy – Crafting a clear approach to address it.
- Coherent Actions – Implementing steps that align and reinforce one another.
This structure transforms strategy from abstract vision into practical action.
Bad Strategy Is Everywhere
Rumelt pulls no punches when describing what makes a bad strategy. It’s vague, filled with motivational fluff, or tries to be everything to everyone. Bad strategies often hide the absence of real choices behind buzzwords like “synergy,” “innovation,” or “excellence.”
According to Rumelt, a bad strategy is easy to spot: it confuses goals with strategy and avoids the tough questions.
Good Strategy Is About Choice
Good strategy requires making trade-offs. It’s not about pleasing everyone; it’s about choosing a direction and committing to it fully. Great leaders have the courage to prioritize, cut unnecessary initiatives, and focus on the areas where they can achieve real advantage.
Leverage Creates Momentum
Rumelt introduces the idea of leverage as the secret ingredient of powerful strategy. Leverage means finding ways to achieve a big result with limited resources, identifying points where a small, well-placed effort produces a disproportionate impact.
Instead of trying to fix everything at once, great strategists pinpoint the pressure points that move the system.
Competitive Advantage Comes From Insight
Good strategy doesn’t come from copying competitors; it comes from seeing what others don’t. Rumelt argues that true competitive advantage is built on insight, not imitation.
Leaders who analyze patterns, anticipate shifts, and exploit asymmetries in the market are the ones who build lasting advantage.
A Guiding Policy Brings Clarity
Once you understand the problem, the guiding policy becomes your North Star. It directs decision-making and prevents distraction. A good guiding policy doesn’t list every possible action; it provides a clear logic that helps teams make consistent, aligned choices under pressure.
Coherent Action Turns Plans into Progress
A brilliant idea means nothing without execution. Coherent actions are the coordinated steps that make the guiding policy real. Rumelt stresses that strategy must align actions across all departments, marketing, operations, product, and leadership, so that every move reinforces the same goal.
Leadership Is Strategic Work
Ultimately, Rumelt positions strategy as a core responsibility of leadership. It’s not about forecasting the future or managing day-to-day tasks; it’s about defining the challenge, creating focus, and motivating people to act coherently toward a shared goal. Great leaders don’t delegate strategy; they own it.
About the Author
Richard P. Rumelt is widely recognized as one of the world’s leading thinkers on strategy and management. He’s a professor emeritus at the UCLA Anderson School of Management and has also taught at INSEAD in France. Known for his no-nonsense approach to strategy, Rumelt has spent decades studying what truly separates successful organizations from the rest.
Before entering academia, Rumelt worked as an engineer at NASA’s Jet Propulsion Laboratory, which helped shape his analytical, systems-oriented approach. Later, he earned his doctorate from Harvard Business School and began a lifelong exploration of strategic problem-solving, spanning industries from technology and energy to defense and global policy.
In addition to Good Strategy Bad Strategy, Rumelt is also the author of The Crux: How Leaders Become Strategists, a follow-up book that deepens his practical framework for strategic thinking in complex environments. His work continues to influence executives, entrepreneurs, and policymakers around the world who are seeking not just to plan, but to think strategically.
Final Thoughts
Good Strategy Bad Strategy is a reminder of how rare and valuable clear thinking really is. In a world obsessed with speed, growth, and slogans, Rumelt challenges leaders to slow down and confront reality.
A good strategy doesn’t emerge from optimism or ambition; it comes from understanding the problem, making tough choices, and committing to a coherent plan of action.
For founders and executives, Rumelt’s lessons are both humbling and empowering. Strategy isn’t something to outsource or dress up in PowerPoint slides; it’s the core of leadership itself. The leaders who define the right challenges, focus on leverage, and align their teams around a few powerful actions are the ones who consistently win.
If you’re building or scaling your business, these lessons apply directly to how you grow your team. A good strategy needs the right people to make it real, and that’s where South can be a valuable asset. We help U.S. companies hire full-time, pre-vetted talent from Latin America, giving you the focus, cost efficiency, and execution power to turn smart strategy into real results.
Book a call with us today to start building your next strategic advantage!
