Good Strategy Bad Strategy: The Difference and Why It Matters

by Richard P. Rumelt

Today, we are offered a bewildering variety of tools and concepts to aid in analysis and the construction of strategies. Each of these tools envisions the challenge slightly differently. For some it is recognizing advantage; for others it is understanding industry structure. For some it is identifying important trends; for others it is erecting barriers to imitation. Yet, there is a more fundamental challenge common to all contexts. That is the challenge of working around one’s own cognitive limitations and biases—one’s own myopia. Our own myopia is the obstacle common to all strategic situations. Being strategic is being less myopic—less shortsighted—than others. You must perceive and take into account what others do not, be they colleagues or rivals. Being less myopic is not the same as pretending you can see the future. You must work with the facts on the ground, not the vague outlines of the distant future. Whether it is insight into industry structures and trends, anticipating the actions and reactions of competitors, insight into your own competencies and resources, or stretching your own thinking to cover more of the bases and resist your own biases, being “strategic” largely means being less myopic than your undeliberative self.