Good Strategy Bad Strategy: The Difference and Why It Matters

by Richard P. Rumelt

Virtually drowning in a twenty-four-hour barrage of superficial news and commentary, the students are surprised that the real world can sometimes have an inner logic that is not secret but that nevertheless remains unremarked. “Is it always this way?” a student asks me. “If you do the work, can you find the real strategic logic of every business?” “No,” I reply, “not of every business. If the business is really successful, then there is usually a good strategic logic behind that success, be it hidden or not. But the truth is that many companies, especially large complex companies, don’t really have strategies. At the core, strategy is about focus, and most complex organizations don’t focus their resources. Instead, they pursue multiple goals at once, not concentrating enough resources to achieve a breakthrough in any of them.”