Lenny's Podcast: Product | Growth | Career

Good Strategy, Bad Strategy | Richard Rumelt

Jan 21, 2024

In a captivating discussion, Richard Rumelt, a strategic guru and author, reveals the hallmarks of effective strategy versus the common pitfalls that lead to failure. He emphasizes the importance of coherence, diagnosis, and decisive leadership in crafting actionable plans. Rumelt explores how power dynamics can shape competitive advantages and draws on historical examples, showing that understanding critical challenges can drive innovation. He even redefines strategy as an 'action agenda,' making the complex world of strategic planning accessible for all.

01:49:17

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Richard Rumelt

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Quick takeaways

To create an effective strategy, understand the specific challenge and focus on the most important and achievable aspect.

Insight plays a crucial role in strategy development, gained through deep understanding and analysis of the problem.

Establishing a hierarchy of power and decision-making is important to prioritize and make choices in executing a strategy, avoiding the inclusion of every request or priority.

Deep dives

Understanding the Challenge and Creating an Action Agenda

To create an effective strategy, it starts with understanding the specific challenge or problem that needs to be addressed. This involves identifying what makes it difficult and choosing the most important and achievable challenge to focus on. Instead of calling it a strategy, think of it as an action agenda that outlines the steps and actions that will be taken to tackle the challenge.

Sources of bad strategy

00:42

Diagnosis: The Beginning of Strategy

00:38

Finding your power asymmetry

00:52

Choosing and Focusing on Achievable Challenges for Action Agenda

03:29

Intro

5min

Navigating Strategic Complexity

23min

Power Dynamics in Strategy

26min

Crafting Effective Strategies: Essential Components and Challenges

4min

Focusing on the Crux: Actionable Approaches to Challenges

12min

Navigating Strategic Dynamics

28min

Comfort, Cosmos, and Creative Tension

5min

Navigating Organizational Challenges and Strategic Focus

6min

Richard Rumelt is a legend in the world of strategy. He’s the author of Good Strategy/Bad Strategy and The Crux: How Leaders Become Strategists, both of which are often recommended by guests on this podcast. From his early days teaching in Iran at a Harvard-sponsored business school to teaching at Harvard Business School itself to over four decades teaching at UCLA’s Anderson School of Management, Richard’s impact resonates globally. His strategic insights are sought after by major corporations including Microsoft, Shell, Apple, AT&T, Intel, and Commonwealth Bank and by governmental organizations such as the U.S. Army Special Operations Command. In this episode, we discuss:

• The essential components of a good strategy

• The importance of coherence in strategy

• Common pitfalls that create a bad strategy

• How “power” plays into strategy, and common sources of power

• The value of knowing history when developing effective strategies

• Why a strategy should simply be called an “action agenda”

• The need for one decider in an organization

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