Good Strategy, Bad Strategy | Richard Rumelt

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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In this episode, we cover:
(00:00) Richard’s background
(04:29) What is a strategy?
(06:23) The essential components of a good strategy (the “kernel”)
(15:04) An example of good strategy
(16:55) Bad strategy
(25:17) The importance of focus and power
(28:19) Identifying and utilizing power
(34:38) Types of power
(41:13) Implementing power
(48:15) The importance of historical knowledge
(55:23) How to write an action agenda
(01:02:47) The crux
(01:10:40) Challenges to executing a strategy
(01:15:44) The need for a decider
(01:20:39) Strategy for startups
(01:26:04) Richard’s “value denials” exercise
(01:31:01) Closing thoughts
(01:33:57) Lightning round

Lenny may be an investor in the companies discussed.

[lkostova]

OMG, he verbalized what I often think when I try to read strategic documents. I go "that's a word salad, there's nothing here, it's abstract fancy-sounding statement that makes the author look smart. But what does it mean?" Thanks Lenny for inviting Prof. Rumelt!

[ghanemzadeh]

Great! Prof. Rumelt rocks. I've read the Good Strategy/Bad Strategy and it's one of the best Stratgey books.

[salim]

An amazing time we live in, I can watch this for free from my place and with earphone so I can hear them clearly, colours are close to reality, with ability to stop and go back if I didn't understand something!

Truly blessed!

[aneez]

One of the best episodes, largely because it is distilled down to what matters and how to think about a problem. Have taken down a lot of notes. Hope to continue this thought exercise at my workplace. Thanks for bringing Richard onto the pod.

[bazejkazmierczak]

It was my first encounter with Richard Rumelt interview. He's delivering great insights, sharing extensive knowledge, wisdom, experience. I was impressed how Richard is able to connect recent LLM revolution back to other revolutions of the past.
Lenny, I'm looking forward for similar caliber profiles on your channel. Well done!

[ryanabshire]

This was an outstanding and insightful interview. You did a good job of facilitating him through his most notable findings from his books and experience, and he did a great job of staying very consistent with his message. This is quite a lot of food for thought; thank you for hosting this interview!

[marcmenzel]

Richard, chapeau. It helps me to support others with finding in themselves their answers to build a strategy. All this in organizational business context. So, many thanks, great chat, cool stories and keep on igniting thinking! The world would become a better place to live. Cheers for now, Marc

[everyreadthis]

I've listened to this podcast several times. I continue to learn something new I missed.

[pbheda]

Best explantion of what stragey is, it is an action plan to solve the hardest problem but its impacted when interests are not aligned, if he writes a "don't do that" book, i think it will be a great book

[blackmansaduuri]

This is worth watching a thousand times ❤❤

[mulderbm]

So many gems from experience in here. Listen with intent and you may recognize them from your own practice. I also like the hint on history books that is key to understanding the context even in todays tech driven world.

[fabuhaimed]

The interview with Richard Rumelt was truly insightful. Having read his books, "Good Strategy, Bad Strategy" and "The Crux, " I'm inspired to conduct a webinar on strategy to explain that it goes beyond mere vision and mission statements. The term "Action Agenda" resonates with me as a fitting substitute for the conventional strategy plan. I appreciate the concise summaries presented in the Takeaways throughout the interview. Both the interviewee and interviewer were exceptional, and I look forward to similar engaging discussions in the future.

[Drackomass]

This was a really slow burner episode, it's very different from Lenny's other episodes, this is probably my Lenny of the Year Episode (I know to early to tell).

[telebiopic]

This is such an amazingly simple exposition. 🎉

[pablolis]

It was an excellent episode, Lenny and Richard Rumelt! Thank you so much. It's been a huge pleasure to watch it in its entirely.
Full of insights and clarification on strategy and other subjects.
Be sure to check it out!

[vale-yi]

Thanks for this. There's some really good ideas here. As a strategic approach/framework, Roger Martin's and AG Lafley's "Playing to win" is a much clearer way to create a winning strategy.

[Lossengwath]

I cringe every time a leader talks about "strategy", and they just state a desired goal or objective with no plan to get there whatsoever.

[KlaasVictor]

Great interview! Immediately bought the book Good strategy Bad strategy 🎉

[cesareborgia]

I've just discovered your podcasts (thanks to Roger Martin). There are really, really great, largely above the competition

[ConanSpartacus]

Great episode! Only wish the microphone on Prof. Rummelt side was a little bit better