Good Strategy Bad Strategy: The Difference and Why It Matters

by Richard P. Rumelt

There are little or no payoffs to incremental improvements in chain-link systems, but Marco avoided this problem by shutting down the normal system of local measurement and reward, refocusing on change itself as the objective. One of the tasks of the interviewer is to listen for what is not said. Marco did not say, “We turned it around by increasing the pressure for profit.” He did not say, “We developed new measures of quality and demanded improvements.” He did not say, “I brought in new, more skilled, managers.” Instead, Marco described a turnaround in which he provided the overall definition of what had to be done and in which he anticipated and absorbed the costs of change. In any organization there is always a managed tension between the need for decentralized autonomous action and the need for centralized direction and coordination. To produce a turnaround of a chain-link system, Marco Tinelli tipped the balance, at least for a while, strongly toward central direction and coordination.