Playing To Win
Good Strategy/Bad Strategy & Playing to Win
Compatibility and Utility
In Year III, I wrote five pieces that assessed the compatibility with and utility for Playing to Win of five popular strategy books or frameworks. Overall the pieces were well-received, especially Business Model Generation & Playing to Win. I promised to do more in Year IV, and I am starting with this piece. After last year’s five, the greatest number of requests have been for Richard Rumelt’s Good Strategy/Bad Strategy: The Difference and Why it Matters. So, this Playing to Win/Practitioner Insights (PTW/PI) piece is called Good Strategy/Bad Strategy & Playing to Win: Compatibility & Utility.
The Crux Angle
I had never met, spoken to, or read anything by Richard Rumelt when I got an email from him asking me to read the electronic manuscript for his then-forthcoming 2022 book, The Crux: How Leaders Become Strategists. I decided to read it and found myself in agreement through and through.
Rumelt’ opinions in the book included: Strategy is a form of problem-solving. It starts with a gnarly challenge. Don’t confuse strategy with management. Strategic planning produces plans not strategies. Analysis doesn’t deliver strategy. Mission statements are largely unhelpful. Invest deeply in understanding the problem before proceeding. You create a strategy; you don’t pick one. Design and imagination are critically important to strategy. Analogy is an important tool. Make your assumptions explicit. Strategy is an ongoing not episodic practice. Incentives as currently structured in the business world don’t help.
There was nothing with which I disagreed. How could I have? I had written about every single thing before — arguing the same thing in each case. My response to him was that the book was all right-minded, but contained nothing of consequence that I hadn’t written about before. So, I had no real advice to give.
Good Strategy/Bad Strategy
Because The Crux was the only thing of Rumelt’s that I had ever read, to write this piece I had to go back and read his 2011 book. Unsurprisingly, I found the compatibility with Playing to Win (PTW) high. It foreshadowed most of the themes that showed up in The Crux a decade later.
Like me, Rumelt is no fan of planning. I would say that we both see it as the enemy of strategy. Planning — whether called ‘strategic planning’ or just ‘planning’ creates lists of stuff — many of the items sensible on their own. It is the product of a process of consensus building and lots of analysis. All of that is at best a distraction from the real work of strategy, if not a guarantee that strategy will never emerge. On that we are in full agreement.
Like me, Rumelt sees strategy as a creative act — purposeful design of coordinated actions, though he has clearly not read The Design of Business (again fair because I haven’t read his work). At one point he says: “A master strategist is a designer.” Yup. I couldn’t agree more and have written a book and dozens of articles on the topic. But it is another manifestation of compatibility.
Like me, Rumelt sees good strategy as simple, actionable, and coherent. When AG Lafley and I wrote Playing to Win, we set out to show that strategy could be simple, fun, and effective. AG always aspires to be ‘Sesame Street simple” — which I have always liked. And the late Chris Argyris trained me to make actionability a sine-qua-non of my work. As he would always remind me: knowledge upon which action cannot be taken is barely worth having. Rumelt expresses contempt for ‘fuzzy’ strategies with flowery words that can mean anything. I concur.
Coherence appears equally important to both of us. To Rumelt, a strategy that lacks coherence is automatically in his ‘bad strategy’ category. For me, strategy is an integrated set of choices — that isn’t integrated if it isn’t coherent. Again, we are compatible.
Rumelt argues for the importance of premeditation — i.e., thinking hard before making a decision rather than throwing spaghetti against the wall. I couldn’t agree more and have argued that making your reasoning explicit is critical in strategy, and often not done.
He argues that anticipation of others’ behavior is essential to great strategy — and surprisingly often just not done. So many so-called strategies contemplate a winning master stroke that elicits no competitive response whatsoever — and produces the inevitable misery. I couldn’t agree more and have written much about that.
Like me, Rumelt sees good strategy as rarely occurring: “Unfortunately, good strategy is the exception, not the rule. And the problem is growing. More and more organizational leaders say they have a strategy, but they do not.” Check — and the subject of many PTW/PI pieces.
The “Kernel”
A core conceptual framework of the book is the “kernel” — the approach that helps generate the desired simple, actionable, and coherent strategy. According to Rumelt, the kernel has three parts: diagnosis, guiding policies, and coherent actions.
Diagnosis
Rumelt sees strategy as a necessary response to a challenge. I call it problem, but that is six of one, half dozen of the other. Neither of us argues for doing strategy because it is that time of year. We both want it to be motivated and guided by the solving of a challenge/problem. Rumelt argues for a lot of work on the diagnosis of the challenge — really understanding why the challenge exists in order to determine what coherent set of actions could overcome the challenge.
That very much resonates with me. I have always liked the John Dewey admonition that “a problem well put is half solved” and argue for staying in the problem definition phase much longer than clients would do on their own because it is so important. So, I like Rumelt’s thorough treatment of diagnosis.
Guiding Policies
I am a little less sanguine about guiding policies. I would roughly translate it into what I think of as the theory of competitive advantage — the way we have chosen to win in the place we have chosen to play. Essentially, he says you need one of those — a way, arising out of the diagnosis — to organize your activities/resources to overcome the challenge identified in the diagnosis.
Because of Argyris’ training — which was very pointed — I always try to go the extra mile on making any advice that I give as actionable as I can. That is why I break the theory of advantage first into two boxes — Where-to-Play and How-to-Win — and then further segment the choice categories into Must-Have Capabilities and Enabling Management Systems.
I find that telling someone to “create a strategy” to solve the identified challenge/problem doesn’t yield much. Typically, they kind of knew that they had a challenge/problem and would have developed a strategy response if they knew how to think it through. They need help and I didn’t find the advice in the book on developing/determining guiding policies to be as actionable as I would have liked.
That having been said, I would issue two caveats to my opinion. First, I resonate with the idea of guiding policies. And second, others may find the advice more actionable than I do.
Coherent Actions
As you can well imagine, I like the actionability focus of this third piece of the kernel. However, I am not a fan of the use of ‘coherent.’ I always have a rule that if you want to further explain a particular thing, you must not use the same descriptor in the explanation as in the thing itself. For example, it is unhelpful to say that you want the movie to be ‘exciting’ and then give the screenwriter the instruction to produce an ‘exciting’ script. That doesn’t help the screenwriter understand what features of the script would make for an exciting movie. The screenwriter either knew that an exciting movie needs an exciting script — in which case this advice is useless — or doesn’t know what you mean by ‘exciting’ in which case, repeating ‘exciting’ isn’t going to provide help.
So, if strategy is supposed to be ‘coherent,’ it isn’t helpful to say that the actions flowing out of it need to be ‘coherent.’ If strategy is to be coherent, then everything about it needs to be coherent — the diagnosis, the guiding policies and the actions. If the recipient of the advice doesn’t know what ‘coherent’ practically means in this context, it is not going to be helpful to use ‘coherent’ as the modifier of ‘actions.’
That having been said, a focus on the strategy being translatable into concrete action is a good thing and fully compatible with everything that I have written.
Practitioner Insights
Good Strategy/Bad Strategy is a good book and is highly compatible with my views on and approach to strategy. That puts it in the class of very few books written on the subject of strategy — very, very few. If it resonates with you, use it and it shouldn’t lead you astray. Plus, you will be very unlikely to end up planning!
I do wish that I would have found some nuggets in either Good Strategy/Bad Strategy or The Crux that I could have used to broaden or deepen my approach to strategy. But maybe I should just be happy that someone on the west coast thinks about strategy in similar fashion to me all the way over on the east coast!
