3 Essentials of Great Strategy
Strategy is often hard to define, which makes it all the more difficult to distinguish what actually constitutes a good strategy.
Fortunately, Richard Rumelt’s classic book Good Strategy/Bad Strategy expertly articulates the building blocks of what constitutes a good strategy and a bad one.
Like most things, the fastest way to understand something is to go to the essence — what Rumelt calls the kernel of strategy.
Because understanding what lies at the heart of good strategy empowers you to create more of them.
The Kernels of Good Strategy
A sound strategy consists of three key interdependent (and equally important) aspects.
1. Diagnosis — A clear definition of the nature of the challenge. A diagnosis simplifies a complex situation and identifies certain aspects as critical.
2. Guiding Policy — An overall policy or approach for overcoming the obstacles identified in the diagnosis.
3. Set of Coherent Actions — The coordinated actions set out to accomplish the guiding policy.
If any of these elements are absent, it should raise warning signs about the validity and efficacy of the strategy.