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đź“š Summary: 'Good Strategy Bad Strategy', by Richard Rumelt


Hi friend – Rob here.

Today in Salmon Theory+: a summary of 'Good Strategy Bad Strategy', by Richard Rumelt.

This book changed things for me when i read it in *checks notes* 2013.

Not because it was so clever. But because it was extremely clear.

A lot of what i write and think today i still owe to it.

Let's get into it.


đź“ť TL;DR:

  1. Scope dictates strategy as much as strategy dictates scope
  2. Strategy is what comes after "by", followed by "because"
  3. Give your teams freedom within a framework
  4. If you can't go to the field, bring the field to you
  5. Be an alchemist by turning a problem you can't solve into a problem you can
  6. Do they need a revolution, or do they just need clarity?
  7. Everything's a hypothesis until it faces the acid test of the market

1. Scope dictates strategy as much as strategy dictates scope

"Performance is the joint outcome of capability and clever design."

I love a one liner.

And i love alliteration.

This has both.

But, it's also extremely practical.

We often assume the job of strategy is to dictate the scope.

And at its best, it can and should.

We have this ambition, how do we fund it?

But 90% of the times, especially if you're downstream, the scope dictates the strategy.

We have this amount of resources, what can we do?

This is nothing to be ashamed of.

It's just reality.

You can't do things you're not resourced to do.

And if you try, you will end up with frustration.

So rather than embarking on a "i wish" narrative for a perfect world, focus on adapting to the world right in front of you.

What do you have?

What can you do with it?

Then do a helluva job with that.


2. Strategy is what comes after "by", followed by "because"

"Many bad strategies are just statements of desire rather than plans for overcoming obstacles."

This one took me a long time to internalise.

It's a common mistake.

We all do it on occasion.

Stop me if you've heard this one:

  • Our strategy is to grow market penetration
  • Our strategy is to win with hard to reach younger audiences
  • Our strategy is to build meaningful brand equity

All valid statements.

None of them a strategy.

Why?

They tell you what you want to do.

But that alone is not what a strategy statement is.

How i see it: strategy is what comes after "by" (your point of difference), followed by "because" (why you have the right to do it).

So, using the examples above:

  • Our objective is to grow market penetration by building equity around generosity because as a business we were born out of small everyday gestures for everyday people (this is the Cadbury IPA award-winning strategy)
  • Our objective is to win with hard to reach younger audiences by behaving like a punk entertainer not just a professional advertiser because we were born to challenge the 'cleaner than clean' codes of the water category (this is what Liquid Death does)
  • Our objective is to build meaningful brand equity by growing associations with valuing and rewarding our customers because historically we have the lowest churn rates in the category (this was the origin story of O2 in the UK that got them to #1)

They're not perfect.

We can discuss the semantics.

But they're far more directional.

See the difference?

We will do X (objective) by (strategy) because (proof).

Simple.

Grounded in truth.

Forces unconventional thinking.

But also clarity.

It ain't more complicated than that.

Doesn't mean it's easy.

But it's a daily practice, and the more you do it, the better you get at it.


3. Give your teams freedom within a framework

"Good strategy lies in specialising on the right activities and imposing only the essential amount of coordination."

That last bit is the golden bit.

Only the essential amount of coordination.

There are two parts to it:

  • Coordination: because strategy is the north star filter to act
  • Essential amount: because we love to overcomplicate things

Some strategic models that are so tightly defined they become a straightjacket.

And yes, they drive creative teams insane.

The most useful models don't worry about what's the most they can get away with.

They worry about what's the least they can get away with.

What's fixed?

What's flexible?

What's fundamental?

Three questions.

They're simple, but force choices.

And strategy is all about choices.

Thing is, if you make all the choices for your creative team, they got nothing.

So only make the essential amount of choices.

They fill the blanks.

A former planning director of mine talked a lot about freedom within a framework.

Chill on the frameworks.

Obsess with freedom instead.


4. If you can't go to the field, bring the field to you

"Our instincts can produce amazingly good judgments. But our instincts also tell us that our instincts are always right. "

One of the very best things we can do as strategists is to offer perspective.

Not just our own.

Of people who are not like us.

Marketing operates in a bubble.

It's a cost of doing business.

But that doesn't mean you can't challenge it.

You should.

Thing is, you can't always go out in the field.

Or do ethnographic studies for every single brief you do.

I wish we could.

But we can't.

So, let's go back to reality.

What can we do?

Can we bring the field to us?

Especially when it's either that or having fuck all to work with?

Two approaches that help me:

  1. Building your own customer panel (something i'm helping build at VCCP)
  2. Using Gen AI to simulate a conversation between you and your target audience (stay with me)

Having a panel of non-marketers gives you blunt reality.

You're arguing about the meaning of a word.

People say it's all a bit boring.

Good to know.

Using Gen AI gives you a next best thing.

You can prime the tool to think like an audience.

Then ask it loads of questions.

It's surprisingly useful.

None of these are perfect.

They are not a replacement for more rigorous research.

But they give you perspective.

And perspective is more scarce than provocative thinking.

Anyone can bring a radical take.

Very few bring raw views from outside the building.


5. Be an alchemist by turning a problem you can't solve into a problem you can

"The duty of any leader is to absorb a large part of complexity and ambiguity, and pass on a simpler problem that is solvable."

There are still views out there that the role of a boss is to boss around.

This is misguided.

And screams insecurity.

The world of management and leadership has moved on.

Because the market conditions are different than what they used to be.

More complex.

So when you have complexity, the answer isn't to tell people exactly what to do.

It's to prime them on what needs to be solved.

There's a difference.

Telling them what to do is just the 'how'.

What needs to be solved gives them the 'why' and 'what'.

We should let teams know of the wider context.

Maybe even give them clues of how we'd solve it.

But it's not a mandate.

It's just another input.

That's your role as a leader.

Not to boss people around.

Not to lecture them.

But to turn an insanely complex situation into a deeply solvable one.

And then holding space for people to solve it.

Their own way.


6. Do they need a revolution, or do they just need clarity?

"Every consultant’s business is undoing entropy—cleaning up the weeds that grow in every organisational garden."

It's naive to think that once you've written the strategy, the job's done.

Or that if you give them the strategy, they don't need you anymore.

These things are not true because strategy is nothing without execution.

And execution eventually calcifies.

Or worse, gets diluted by politics.

So strategy is a full body contact sport where repeat exposure gives you points.

The job isn't to write the thing.

It's to sell it, over and over again.

And sometimes, the sell isn't about creating a revolution, or sparking a new idea.

Tons of businesses have tons of ideas.

What they need is focus.

In those cases, your job isn't to produce more options.

It's to reduce their options to the most impactful one.

Not a revolution.

Just clarity.


7. Everything's a hypothesis until it faces the acid test of the market

"Without a diagnosis, one cannot evaluate alternative guiding policies. Without working through the first round of action one cannot be sure that the guiding policy can be implemented. Good strategy is not just “what” you do. It's also “why” and “how” you do it."

I had to finish with this one.

It's the lesson from the book.

Diagnosis, guiding policy, coherent actions.

Always.

In.

That.

Order.

Thing is, lots of us focus on the diagnosis part.

And that is correct.

But these days i am more interested in the coherent actions part.

Not because tactics rule over strategy.

But because tactics are much closer to the market.

And the market's response dictates a lot of your work.

You gotta work through the action to know if your guiding policy is correct.

So don't worry about over-analysing.

Worry about under-executing.

Unless you're in a literal battlefield, the cost of small scale executions is low.

But the potential upside is huge.

This is how you accelerate the work.

We often say a strategy is just a hypothesis.

Then again, so is a tactic or an idea.

It's all hypothetical, until the market response dictates otherwise.

That's the real nature of what an effectiveness culture is.

It's not what you do.

But what the market response to that thing is.

So lead with that.


đź“ť TL;DR:

  1. Scope dictates strategy as much as strategy dictates scope
  2. Strategy is what comes after "by", followed by "because"
  3. Give your teams freedom within a framework
  4. If you can't go to the field, bring the field to you
  5. Be an alchemist by turning a problem you can't solve into a problem you can
  6. Do they need a revolution, or do they just need clarity?
  7. Everything's a hypothesis until it faces the acid test of the market

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