Good Strategy Bad Strategy: The Difference and Why It Matters

by Richard P. Rumelt

It is a good point. Malcolm Gladwell’s Blink is a great read, a fascinating book. He argues that we all have the ability to process certain kinds of complex information quickly and come up with a judgment and yet not know how we got there. We all know this is true, especially with regard to making decisions about other people and social settings, and about matching patterns—seeing that one thing has characteristics that remind us of another. These are lightning-quick computations. Gladwell makes the case that we should trust these judgments made in the blink of an eye, especially when they are made by people with good experience. Our instincts can often produce amazingly good judgments. But our instincts also tell us, incorrectly, that our instincts are always right. You should recognize which situations require deeper reflection. Are competitors or nature leading us into a trap? Can we set a trap for less-wary adversaries? I explain that Blink judgments may work for people situations and certain kinds of pattern matching. Unfortunately, there is also a good deal of research revealing that most people are poor at making many kinds of judgments, whether done in a blink or in a month. Of special concern are judgments about the likelihoods of events, about one’s own competence relative to others’, and about cause-and-effect relationships. In estimating the likelihood of an event, even experienced professionals exhibit predictable biases. For example, people tend to place more...