Good Strategy/Bad Strategy: the difference and why it matters by Richard Rumelt - Book Report/Review Example

?Book Review Good Strategy/Bad Strategy: The difference and why it matters By Richard Rumelt Contents Thesis 3 Central pillars 3 Leadership and strategy 3 “Kernel” for creating good strategy 4 Thinking like a strategist 5 Discussion – reflection on the book’s impact on the future manager 6 Works cited 7 Thesis The central theme of the book deals with organizational strategy. The term “strategy” was initially used in wars for developing tactics to win over the enemy. Business is also a kind of war, where the rival firms are considered as enemies & everyone fight with them to achieve the maximum market share & maximum sales. In this war the weapon is strategy. A strategy is a tool used for managing the organization’s resources in order to mitigate risks & optimize resources. This is the simplest definition of the term strategy. However in real life, the organizations face a lot of complexity to form & maintain a strategy. Moreover the author states that there can be both good and bad strategy depending on the skill, ability, leadership, thinking process and many such factors related to the strategy maker. Central pillars Leadership and strategy The first part of the book named “Good Strategy/Bad Strategy: The difference and why it matters” by Richard Rumelt states that creating objectives, budgets, key priorities, leadership and visions is not equal to creating strategies. The author argues that goals or objectives are not strategies. Strategies are the means to achieve goals. Rumelt provided example of transformational leadership and its link with charisma. In this context the circumstance of Jay-Z’s life can be mentioned which is a perfect example of converting the charisma of oneself into transformational leadership. In this leadership style the leader guides and transforms the staff. The leader makes continuous efforts to address the grievances of the employees and motivate them towards improving their performance at their own initiative. Here open communication between the staff and the leader is always encouraged and the leader follows participative style of management. The staff gets highly influenced by the leader in Transformational Leadership Style. A successful leader never dominates his followers through his power; rather he influences & inspires them. Jay-Z had talent, confidence & the power to foresee. He was known for his friendly nature & his happy-go-lucky nature which acted as the charisma inside him, to impress his fans. It’s very obvious that Jay-Z had an amazing vision which helped him to convert the transformational leadership style. His unique idea of starting Roc-a-Fella was a correct decision on his part though it seemed to others that it’s a wrong step. He had the exact planning of the future & therefore he implemented his idea in a new enterprise. Again a rapper would never think of starting a business in food chain, clothing & cars, but with his vision he realized it to be a profitable business & so he explored these parts too. In this regard the author illustrated the strategy adopted by Steve Jobs for Apple which was sourced directly from handling the basic problems with a coordinated and focused set of tasks. He never declared determined profit objectives or revenue goals. Further he did not get too much involved in the “messianic visions of the future” (Rumelt 13) “Kernel” for creating good strategy According to the writer, strategy can prove to be good when they include “kernel”. The kernel includes 3 key components. They are: A diagnosis of the main obstacles and challenges experienced by the firm. A guiding policy that define the means through which the firm prepares to overcome or approach the challenge A collection of coherent actions and reserve dedications intended to continue the guiding procedure. Strategy is a term that directs the various forces to reach the competitive edge; in most of the circumstances the strategy formulated are suitable for applying in the operational arena and not straightway valid in business scheme formation. The most impending application in this domain might be to conduct exploration, assessment and/or supervision methods in search of a greater return of outlay. In the second part of the book, the author finds out and discusses about a variety of "sources of power", recognizing them and relating them to the maximum result.  This portion of the text deals with comparatively heavier circumstances, but it's appealing for the knowledge derived from the various situations. The “sources of power” includes the factors like growth, focus, design, leverage, etc. Each factor has significance in the procedure of empowering a strategy. Here Rumelt talks about ‘good strategy’ which comprises of a genuine acknowledgement of disputes and a way to conquer them in a consistent form. Strategy involves a ‘cohesive response to a challenge’. It is the amalgamation of action and arguments which puts emphasis on interest and eventually on resources with certain goals at the cost of others. Thinking like a strategist In the third part of the book, Rumelt provides some suggestions on visualizing “like a strategist”, that can be recapitulated as being self-critical, cool-headed and open-minded. “Thinking like a strategist” is equivalent to viewing things like a scientist a learned assumption must be formed on the basis of facts and data but then follow experimentation with erratic outcomes. Superior strategy can be developed from proprietary awareness that is hard won, innovative strategies depends entirely on the ideas and information in parts or in a totality. On the whole, in preparing this writing the author came up with the proof of being someone who happily and bravely takes up challenges while forming strategies. However one crucial factor for formulating strategies, as stated by Rumelt, is time which can never be controlled even if the other factors are taken under control. Moreover the author also states that it’s necessary to think differently and in an improved manner to make way for innovative strategies. Discussion – reflection on the book’s impact on the future manager Rumelt stated that it is essential to know the bad strategies to develop the really good ones. The 1st part of the writing explores the features of “bad strategy”. The very 1st factor is the tendency to avoid the issue at hand. At this point the writer brings forward a feeling of realism, stating that strategy is not equivalent to the “list of things you wish would happen”. Frequently the firms get the idea that strategy is the extended goal of the firm that emphasizes on the best state of affairs in place of identifying and examining directly the hindrances in their way. “Good Strategy Bad Strategy” is a piece of guideline for the future managers which is very nicely created, integrated and presented. The ingredients of the book rationalize a pretty long “shelf life”. The book proves that Richard Rumelt has a rational point of view and also has a strong command over practical situations of life. Throughout the text the author puts forward appropriate framework and well-investigated case studies to assist in explaining various perspectives towards strategy formulation. Works cited Rumelt, Richard P. Good Strategy/Bad Strategy: The Difference and Why it Matters. NewYork: Crown Business. 2011. Pdf. Read More